# UNION OF INDIA & ANR v. TARSEM SINGH & ORS

- **Citation:** [2019] 13 S.C.R. 49
- **Court:** Supreme Court of India
- **Decided:** 2019-09-19
- **Case number:** Civil Appeal No. 7064 of 2019
- **Bench:** R. F. Nariman, Surya Kant
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/union-of-india-anr-v-tarsem-singh-ors-33292
- **Pages:** 60

## Headnote

National Highways Act, 1956 [As amended by National
Highways Laws (Amendment) Act, 1997]:
s.3A, 3G(7) and 3J - Acquisition under the Act - Award of
solatium - Whether permissible - Held: Solatium is part and parcel
of compensation that is payable for compulsory acquisition of land
- 1956 Act was amended by 1997 Amendment Act with the object of
reducing the delay and for speedy implementation of highway
projects - The Amendment Act, 1997 cannot be shielded by Art.
31-C of the Constitution as the object of the Amendment has no
direct and rational nexus with the Directive Principles contained in
Art. 39(b) of the Constitution - Even if the Amendment Act is regarded
as an Act to carry out the purpose of Art. 39(b), the object of the
Amendment Act is not served by removing solatium and interest from
compensation - Thus grant of compensation without solatium and
interest, not being basically and essentially necessary to carry out
the object of the Amendment Act, would not be protected by Art.
31-C and, therefore, any infraction of Art. 14 can be inquired into
by the Court - A classification made between different sets of landowners has no relation to the object sought to be achieved by the
Amendment Act, and hence the Amendment Act falls foul of Art. 14
of the Constitution - Therefore, the provisions of the Land
Acquisition Act relating to solatium and interest contained in Section
23 (1A) and (2) and interest payable in terms of proviso to Section
28 will apply to the acquisitions made under National Highways
Act - Therefore, Section 35J to this extent is violative of Art.14 and
hence unconstitutional - Constitution of India - Arts. 14, 31-C and
39(b).
Constitution of India
Art. 31-C - Protection under - When available - Held: For
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availing protection u/Art. 31-C any declaration to that effect is not
necessary - If the law has a direct and rational nexus with the
Directive Principles contained in Art. 39(b), the law would be
shielded by Art. 31-C - It is not every provision of a statute enacted
with a dominant object of giving effect to a Directive Principle which
are protected under the amended Art.31-C,, but only those provisions
which are basically and essentially necessary for giving effect to
the Directive Principles are protected.
Disposing the appeals, the Court
HELD: 1.1 The National Highways Act, 1956, as originally
enacted, did not provide for acquisition of land. Thus, till the
National Highways Laws (Amendment) Act, 1997, all acquisitions
for the purpose of National Highways were made under the Land
Acquisition Act, 1894 and the owners were given, in addition to
market value, solatium as well as interest under the provisions
of the Land Acquisition Act. [Para 6][63-B]
1.2 Keeping in view the object of reducing delay and speedy
implementation of highway projects, the amended National
Highways Act does away with any "award" by way of an offer to
the landowner. Post the notification under Section 3A of National
Highways Act, objections are to be heard by the competent
authority, whose order is then made final. The moment the
authority disallows the objections, a report is submitted to the
Central Government, and on receipt of such report, the Central
Government, by a declaration, states that the land should be
acquired for the purpose mentioned in Section 3A. The important
innovation made by the Amendment Act is that vesting is not
postponed to after an award is made by the Competent Authority.
Vesting takes place as soon as the Section 3D declaration is made.
One other important difference between the Amendment Act and
the Land Acquisition Act is that determination of compensation
is to be made by the competent authority under the Amendment
Act which, if not accepted by either party, is then to be determined
by an Arbitrator to be appointed by the Central Government.
Such arbitrator's Award is then subject to challenge under the
Arbitrat

## Text

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UNION OF INDIA & ANR.
v.
TARSEM SINGH & ORS.
(Civil Appeal No. 7064 of 2019)
SEPTEMBER 19, 2019
[R. F. NARIMAN AND SURYA KANT, JJ.]
National Highways Act, 1956 [As amended by National
Highways Laws (Amendment) Act, 1997]:
s.3A, 3G(7) and 3J - Acquisition under the Act - Award of
solatium - Whether permissible - Held: Solatium is part and parcel
of compensation that is payable for compulsory acquisition of land
- 1956 Act was amended by 1997 Amendment Act with the object of
reducing the delay and for speedy implementation of highway
projects - The Amendment Act, 1997 cannot be shielded by Art.
31-C of the Constitution as the object of the Amendment has no
direct and rational nexus with the Directive Principles contained in
Art. 39(b) of the Constitution - Even if the Amendment Act is regarded
as an Act to carry out the purpose of Art. 39(b), the object of the
Amendment Act is not served by removing solatium and interest from
compensation - Thus grant of compensation without solatium and
interest, not being basically and essentially necessary to carry out
the object of the Amendment Act, would not be protected by Art.
31-C and, therefore, any infraction of Art. 14 can be inquired into
by the Court - A classification made between different sets of landowners has no relation to the object sought to be achieved by the
Amendment Act, and hence the Amendment Act falls foul of Art. 14
of the Constitution - Therefore, the provisions of the Land
Acquisition Act relating to solatium and interest contained in Section
23 (1A) and (2) and interest payable in terms of proviso to Section
28 will apply to the acquisitions made under National Highways
Act - Therefore, Section 35J to this extent is violative of Art.14 and
hence unconstitutional - Constitution of India - Arts. 14, 31-C and
39(b).
Constitution of India
Art. 31-C - Protection under - When available - Held: For
 [2019] 13 S.C.R. 49
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availing protection u/Art. 31-C any declaration to that effect is not
necessary - If the law has a direct and rational nexus with the
Directive Principles contained in Art. 39(b), the law would be
shielded by Art. 31-C - It is not every provision of a statute enacted
with a dominant object of giving effect to a Directive Principle which
are protected under the amended Art.31-C,, but only those provisions
which are basically and essentially necessary for giving effect to
the Directive Principles are protected.
Disposing the appeals, the Court
HELD: 1.1 The National Highways Act, 1956, as originally
enacted, did not provide for acquisition of land. Thus, till the
National Highways Laws (Amendment) Act, 1997, all acquisitions
for the purpose of National Highways were made under the Land
Acquisition Act, 1894 and the owners were given, in addition to
market value, solatium as well as interest under the provisions
of the Land Acquisition Act. [Para 6][63-B]
1.2 Keeping in view the object of reducing delay and speedy
implementation of highway projects, the amended National
Highways Act does away with any "award" by way of an offer to
the landowner. Post the notification under Section 3A of National
Highways Act, objections are to be heard by the competent
authority, whose order is then made final. The moment the
authority disallows the objections, a report is submitted to the
Central Government, and on receipt of such report, the Central
Government, by a declaration, states that the land should be
acquired for the purpose mentioned in Section 3A. The important
innovation made by the Amendment Act is that vesting is not
postponed to after an award is made by the Competent Authority.
Vesting takes place as soon as the Section 3D declaration is made.
One other important difference between the Amendment Act and
the Land Acquisition Act is that determination of compensation
is to be made by the competent authority under the Amendment
Act which, if not accepted by either party, is then to be determined
by an Arbitrator to be appointed by the Central Government.
Such arbitrator's Award is then subject to challenge under the
Arbitration and Conciliation Act, 1996. Thus, delays in references
made to District Judges and appeals therefrom to the High Court
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and Supreme Court have been obviated. Section 3G(7) does not
provide for grant of solatium, and Section 3H(5) awards interest
at the rate of 9% on the excess amount determined by the
arbitrator over what is determined by the competent authority
without the period of one year contained in the proviso to Section
28 of the Land Acquisition Act, after which interest is only
awardable at the rate of 15% per annum, if such payment is made
beyond one year. [Para 9][69-F-H; 70-A-C]
1.3 The solatium that is paid to a landowner is on account
of the fact that a landowner, who may not be willing to part with
his land, has now to do so, and that too at a value fixed legislatively
and not through negotiation, by which, arguably, such land owner
would get the best price for the property to be sold. Once this is
understood in its correct perspective, it is clear that "solatium"
is part and parcel of compensation that is payable for compulsory
acquisition of land. [Para 10][71-C-D]
Sunder v. Union of India (2001) 7 SCC 211 : [2001] 3
Suppl. SCR 176 - followed.
1.4 Solatium and interest were awarded to landowners for
compulsory acquisition of their lands for the purpose of National
Highways until the 1997 Amendment Act. After the Land
Acquisition Act has been repealed, the Right to Fair
Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act, 2013 has come into force.
The First Schedule to the 2013 Act provides that solatium
equivalent to 100% of the market value multiplied by various
factors, depending on whether the land is situated in a rural or
urban area, constitutes minimum compensation package to be
given to those whose land is acquired. The Fourth Schedule to
the 2013 Act, to be read along with Section 105, expressly includes
under Item 7, the National Highways Act, 1956. In Item 9, this
Schedule also includes The Requisitioning and Acquisition of
Immovable Property Act, 1952. By a Notification dated 28th
August, 2015 issued under Section 105 read with Section 113 of
the 2013 Act, it is provided that the 2013 Act compensation
provisions will apply to acquisitions that take place under the
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS.
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National Highways Act. The result is that both before the 1997
Amendment Act and after the coming into force of the 2013 Act,
solatium and interest is payable to landowners whose property is
compulsorily acquired for purposes of National Highways. This
is one other very important circumstance to be borne in mind
when judging the constitutional validity of the 1997 Amendment
Act for the interregnum period from 1997 to 2015. [Paras 11 and
12][71-E; 72-E-G]
2.1 In *Property Owners' Association case it was held that
the statement made in **Sanjeev Coke case , followed by several
other judgments, that the "material resources of the community"
would include privately owned resources, would be prima facie
incorrect and hence the matter was referred to nine Judges of
this Court, which reference is still pending. It is assumed for the
purpose of the present case that Article 31-C, as originally
enacted, continues to exist and that the "material resources of
the community" would include private property as well.
[Para 13][74-C-D]
**Sanjeev Coke Manufacturing Company v. Bharat
Coking Coal Ltd. & Anr. [1983] 1 SCR 1000; *Property
Owners' Association v. State of Maharashtra (1996) 4
SCC 49 : [1996] 2 Suppl. SCR 230; Minerva Mills v.
Union of India [1981] 1 SCR 206; Property Owners'
Association v. State of Maharashtra (2001) 4 SCC 455;
State of Karnataka v. Shri Ranganatha Reddy (1977) 4
SCC 471 : [1978] 1 SCR 641 - referred to.
3.1 For availing protection under Article 31-C, it is not
necessary that any declaration be made in that behalf. It is also
important to remember that in order that a law be shielded by
Article 31-C, the said law must have a direct and rational nexus
with the principles contained in Article 39(b). [Para 16][75-E-F]
State of Maharashtra v. Basantibai Mohanlal Khetan
(1986) 2 SCC 516 : [1986] 1 SCR 707; Assam
Sillimanite Ltd. v. Union of India [1991] Supp 3 SCR
273 - relied on.
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3.2 The Objects and Reasons which led to the 1997
amendment of the National Highways Act do not mention any
object relating to distribution of the material resources of the
community. The object of the Amendment Act has no relationship
whatsoever to the Directive Principle contained in Article 39(b),
inasmuch as its limited object is to expedite the process of land
acquisition by avoiding inordinate delays therein. The object of
the Amendment Act was not to acquire land for the purpose of
national highways as, pre-amendment, the Land Acquisition Act
provided for this. The object of the Amendment Act was fulfilled
by providing a scheme different from that contained in the Land
Acquisition Act, making it clear that the stage of offer of an amount
by way of compensation is removed altogether; vesting takes
place as soon as the Section 3D notification is issued; and most
importantly, the tardy Court process is replaced by arbitration.
Obviously, these objects have no direct and rational nexus with
the Directive Principle contained in Article 39(b). [Para 18]
[77-D-F]
3.3 Even on the assumption that Article 31-C is attracted
to the facts of the present case, yet, it is not every provision of a
statute, which has been enacted with the dominant object of giving
effect to a directive principle, that it entitled to protection, but
only those provisions of the statute which are basically and
essentially necessary for giving effect to the Directive Principle
are protected under the amended Article 31-C. [Para 18]
[77-F-H]
Minerva Mills v. Union of India [1981] 1 SCR 206 -
followed
Tinsukhia Electric Supply Co. Ltd. v. State of Assam
(1989) 3 SCC 709 : [1989] 2 SCR 544; Maharashtra
State Electricity Board v. Thana Electric Supply Co.
(1989) 3 SCC 616 : [1989] 2 SCR 58 - referred to.
3.4 The test of Article 31-C's protection being accorded
only to those provisions which are basically and essentially
necessary for giving effect to the objects of Article 39(b) is lifted
from #Akadasi Padhan case. Even if the Amendment Act, 1997
be regarded as an Act to carry out the purposes of Article 39(b),
the object of the Amendment Act is not served by removing
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solatium and interest from compensation to be awarded. It is
obvious, therefore, that the grant of compensation without
solatium and interest is not basically and essentially necessary
to carry out the object of the Amendment Act, 1997, even if it is
to be considered as an acquisition Act pure and simple, for the
object of the said Amendment Act as it is to obviate delays in the
acquisition process of acquiring land for National Highways. On
application of this test as well, it is clear that the grant of
compensation without solatium and interest, not being basically
and essentially necessary to carry out the object of the
Amendment Act, would not receive the protective umbrella of
Article 31-C and, therefore, any infraction of Article 14 can be
inquired into by the Court. [Para 18][78-E; 79-E-G]
Dr K. R. Lakshmanan v. State of Tamil Nadu (1996) 2
SCC 226 : [1996] 1 SCR 395 - relied on.
State of Tamil Nadu v. L. Abu Kavur Bai (1984) 1 SCC
515; Maharashtra SEB v. Thana Electric Supply Co.
(1989) 3 SCC 616 : [1989] 2 SCR 518; Tinsukhia
Electric Supply Co. Ltd. v. State of Assam (1989) 3 SCC
709 : [1989] 2 SCR 544- distinguished.
#Akadasi Padhan v. State of Orissa [1963] Supp. (2)
SCR 691 - referred to.
4.1 Ordinarily a classification based on public purpose is
not permissible under Article 14 for the purpose of determining
compensation. Also, it is immaterial whether it is one Acquisition
Act or another Acquisition Act under which the land is acquired,
as, if the existence of these two Acts would enable the State to
give one owner different treatment from another who is similarly
situated, Article 14 would be infracted. In the facts of the present
cases, it is clear that from the point of view of the landowner it is
immaterial that his land is acquired under the National Highways
Act and not the Land Acquisition Act, as solatium cannot be
denied on account of this fact alone. [Para 24][84-G-H; 85-A-B]
4.2 The object of the 1997 Amendment was to speed up
the process of acquiring lands for National Highways. The
awarding of solatium and interest has nothing to do with achieving
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this object, as it is nobody's case that land acquisition for the
purpose of national highways slows down as a result of award of
solatium and interest. Thus, a classification made between
different sets of landowners whose lands happen to be acquired
for the purpose of National Highways and landowners whose lands
are acquired for other public purposes has no rational relation to
the object sought to be achieved by the Amendment Act, i.e.
speedy acquisition of lands for the purpose of National Highways.
On this ground alone, the Amendment Act falls foul of Article 14.
[Para 22][84-B-D]
P. Vajravelu Mudaliar v. Special Deputy Collector for
Land Acquisition [1965] 1 SCR 614 - followed
State of Kerala v. T. M. Peter (1980) 3 SCC 554 : [1980]
3 SCR 290 - relied on.
Prakash Amichand Shah v. State of Gujarat (1986) 1
SCC 581 : [1985] 3 Suppl. SCR 1025; Girnar Traders
(3) v. State of Maharashtra (2011) 3 SCC 1 : [2011] 3
SCR 1 - distinguished.
Union of India v. Hari Krishnan Khosla (1993) Supp 2
SCC 149 : [1992] 1 Suppl. SCR 620; Union of India v.
Chajju Ram (2003) 5 SCC 568 : [2003] 3 SCR 647 -
distinguished and required a re-look.
M/s Golden Iron and Steel Forging v. Union of India
2011 (4) RCR (Civil) 375 - approved.
Nagpur Improvement Trust v. Vithal Rao (1973) 1 SCC
500 : [1973] 3 SCR 39; Balammal v. State of Madras
[1969] 1 SCR 90; H. V. Low and Company Private Ltd.
v. State of West Bengal (2016) 12 SCC 699 - referred
to.
5. Any reference to the second proviso of Article 31-A is
wholly irrelevant to the question in the present case and cannot
under any circumstance be used in order to distinguish a judgment
which otherwise applies on all fours. The second proviso to Article
31-A deals with persons whose lands are acquired when such
person is cultivating the same personally. The reason for awarding
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compensation at a rate which is not less than market value, under
second Proviso, is in order that a farmer, who is cultivating the
land personally, gets other land of equivalent value, which he can
then cultivate personally. As such farmer is at the centre of
agrarian reform legislation, such legislation would be turned on
its head if lands were to be acquired without adequately
compensating him instead of from absentee landlords whose lands
are then to be given to the landless and to such persons if they
personally cultivate lands less than the ceiling area under State
Agricultural Ceiling Acts. [Para 26][85-D-G]
6. Insofar as easementary rights under the Land Acquisition
Act are concerned, Sections 3, 9 and 31 show that a person who
is interested in an easement, affecting land, can claim
compensation therefor under the aforesaid provisions of the Land
Acquisition Act. Under both the Land Acquisition Act and the
National Highways Act, such claims have to be proved in
accordance with law, the difference being that under the Land
Acquisition Act actuals are payable, whereas under the National
Highways Act, a fixed amount of 10% of the amount determined
by the competent authority is payable. It is, therefore, wholly
incorrect to state that extra amounts are payable to the owner
under the National Highways Act, which are not so payable under
the Land Acquisition Act. Also, both Acts contemplate payment
of compensation to persons whose easementary rights have been
affected by the acquisition. In any event, this contention cannot
possibly answer non-payment of solatium and interest under the
National Highways Act. [Para 37][94-G; 96-B-D]
7. Even in acquisitions that take place under the National
Highways Act and the Requisition and Acquisition of Immovable
Properties Act, 1952, the Notification of 2015 under the new
Acquisition Act of 2013 makes solatium and interest payable in
cases covered by both Acts. In fact, with effect from 1st January,
2015, an Amendment Ordinance No.9 of 2014 was promulgated
amending the 2013 Act. It is only when this Ordinance lapsed
that the notification dated 28th August, 2015 was then made under
Section 113 of the 2013 Act. It is thus clear that the Ordinance as
well as the notification have applied the principle contained in
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##Nagpur Improvement Trust case, as the Central Government
has considered it necessary to extend the benefits available to
landowners generally under the 2013 Act to similarly placed
landowners whose lands are acquired under the 13 enactments
specified in the Fourth Schedule, the National Highways Act being
one of the aforesaid enactments. This being the case, it is clear
that the Government has itself accepted that the principle of
Nagpur Improvement Trust case would apply to acquisitions which
take place under the National Highways Act, and that solatium
and interest would be payable under the 2013 Act to persons
whose lands are acquired for the purpose of National Highways
as they are similarly placed to those landowners whose lands have
been acquired for other public purposes under the 2013 Act. This
being the case, it is clear that even the Government is of the
view that it is not possible to discriminate between landowners
covered by the 2013 Act and landowners covered by the National
Highways Act, when it comes to compensation to be paid for lands
acquired under either of the enactments. [Para 38][96-E-F; 97B; 99-C-E]
Sunita Mehra v. Union of India (2016) SCC OnLine
1128 - referred to.
8. The impugned judgments could have set aside on the
ground that when the arbitral awards did not provide for solatium
or interest, no Section 34 petition having been filed by the
landowners, the impugned judgments ought not to have allowed
solatium and/or interest. But given the fact that the Government
itself is of the view that solatium and interest should be granted
even in cases that arise between 1997 and 2015, in the interest
of justice interfere with such orders is declined, given
discretionary jurisdiction under Article 136 of the Constitution
of India. Therefore, it is declared that the provisions of the Land
Acquisition Act relating to solatium and interest contained in
Section 23(1A) and (2) and interest payable in terms of Section
28 proviso will apply to acquisitions made under the National
Highways Act. Consequently, the provision of Section 3J is, to
this extent, violative of Article 14 of the Constitution of India
and, therefore, declared to be unconstitutional. [Para 41][101-FH; 102-A]
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Case Law Reference
2011 (4) RCR (Civil) 375
approved
Para 4
[2001] 3 Suppl. SCR 176
followed
Para 10
[1983] 1 SCR 1000
referred to
Para 13
[1996] 2 Suppl. SCR 230
referred to
Para 13
[1981] (1) SCR 206
referred to
Para 13
(2001) 4 SCC 455
referred to
Para 13
[1978] 1 SCR 641
referred to
Para 13
[1984] 1 SCR 725
distinguished
Para 14
[1989] 2 SCR 518
distinguished
Para 14
[1989] 2 SCR 544
distinguished
Para 15
[1986] 1 SCR 707
relied on
Para 16
[1991] Supp 3 SCR 273
relied on
Para 16
[1996] 1 SCR 395
relied on
Para 17
[1963] Supp. (2) SCR 691
referred to
Para 18
[1965] 1 SCR 614
followed
Para 19
[1973] 3 SCR 39
followed
Para 19
[1969] 1 SCR 90
referred to
Para 21
[1992] 1 Suppl. SCR 620
distinguished and
Para 28
required a re-look
[2003] 3 SCR 647
distinguished and
Para 29
required a re-look
(2016) 12 SCC 699
referred to
Para 30
[1985] 3 Suppl. SCR 1025
distinguished
Para 32
[1980] 3 SCR 290
relied on
Para 33
[2011] 3 SCR 1
distinguished
Para 34
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CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7064
of 2019.
From the Judgment and Order dated 12.11.2018 of the High Court
of Punjab and Haryana at Chandigarh in FAO No. 6715 of 2018 (O&M)
With
C.A. Nos. 7068/2019, 7065/2019, 7066/2019, 7067/2019, 7084/
2019, 7086/2019, 7081/2019, 7079/2019, 7070-7071/2019, 7104/2019,
7101/2019, 7090/2019, 7072-7073/2019, 7089/2019, 7085/2019, 7083/2019,
7087/2019, 7082/2019, 7102/2019, 7078/2019, 7074/2019, 7075/2019,
7103/2019, 7080/2019, 7076/2019, 7077/2019, 7105/2019, 7088/2019,
7069/2019, 7092/2019, 7110/2019, 7091/2019, 7094/2019, 7095/2019,
7097/2019, 7100/2019, 7099/2019, 7096/2019, 7098/2019, 7093/2019,
7109/2019, 7106/2019, 7107/2019 and 7108/2019.
Mukul Rohatgi, Narender Hooda, Sr. Adv., Alok Sangwan,
Devashish Bharuka, Raghujeet S. Madan, Damanjit Singh Monga,
Ms. Ankur Berry, Sunny Kadiyan, Yashveer Singh Balhara, Ravi Bharuka,
Mayank Sharma and Rajendra Beniwal, Advs. for the Appellants.
Amit Sibal, Neeraj Kumar Jain, Sr. Adv., Shashi Pal Laler, R. S.
Manhas, Sonit Sinhmar, Ravi Panwar, P. N. Puri, Ms. Reeta Dewan
Puri, Abhishek Puri, Paramjit Rajput, Harish Mahajan, Tripurari Ray,
Balwant Singh Billowria, Parveen Kumar, Vijay Pratap Singh,
Vivekanand Singh, Anirudh Ray, Ms. Shilpa Singh, Gaurav Agrawal,
Yashraj Singh Deora, Shyam Agarwal, Vinay Tripathi, Aishvary Vikram,
Ms. Sonal Mashankar, Surinder Singh, Satbir Singh Rathore, Arvind Gupta,
Manoj Pundir and Navneet Singh, Advs. for the Respondents.
The Judgment of the Court was delivered by
R. F. NARIMAN, J.
1. Leave granted.
2. A batch of appeals before us by the Union of India question the
view of the Punjab and Haryana High Court which is that the non-grant
of solatium and interest to lands acquired under the National Highways
Act, which is available if lands are acquired under the Land Acquisition
Act, is bad in law, and consequently that Section 3J of the National
Highways Act, 1956 be struck down as being violative of Article 14 of
the Constitution of India to this extent.
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3. The facts of one of these appeals may be taken up as illustrative
of the points for consideration in all these appeals. In Union of India &
Anr. v. Tarsem Singh & Ors. (Civil Appeal No. 7064 of 2019 @ SLP
(C) No.9599 of 2019), a notification dated 24.12.2004 was issued under
Section 3A of the National Highways Act, 1956 (hereinafter referred to
as "the Act"), intending to acquire land belonging to the Respondents for
the purpose of four-laning National Highway No.1-A on certain stretches
of the Jalandhar-Pathankot section as well as the Pathankot-Jammu
section falling within the State of Punjab. On 11th July, 2005, the said
lands were declared to have vested in the State pursuant to Section
3D(2) of the said Act. On 5th October 2006, the competent authority
under the Act passed an Award in which compensation was calculated
at Rs.4,219/- per marla or Rs.6.75 lakhs per acre. As this Award was
disputed by the Respondents, an Arbitrator was appointed under the
Act, who then arrived at a figure of Rs.1.5 lakhs per marla as
compensation. It is important to note that as no solatium or interest is
provided by the Act, such solatium and interest was not awarded by the
learned Arbitrator. Meanwhile, a Section 34 application filed under the
Arbitration Act by the Union of India was dismissed on the ground that
it was hopelessly time-barred. On appeal to the Division Bench of the
High Court, it was found on facts that as the amount of compensation
awarded was not challenged in certain cases, the National Highways
Authority of India being "State" under Article 12 of the Constitution
cannot be permitted to pick and choose between persons similarly situate,
as a result of which the appeal against valuation at the rate of 1.5 lakhs
per marla was rejected. However, the Court deleted the grant of
severance and 18% interest if the awarded amount is not paid within six
months, following an earlier Division Bench judgment of the same Court.
The Court then went on to state that despite the fact that no appeal has
been filed against the learned Single Judge's judgment by the owners,
yet compensation for acquired land being in the nature of beneficial
legislation, they would be bound by an earlier Division Bench judgment
which requires the National Highway Authority to pay solatium and,
therefore, directed payment of solatium at the rate of 30%, as laid down
in the said judgment.
4. Shri Shyam Divan, learned Senior Advocate appearing on behalf
of the Union of India and NHAI, took us through the relevant provisions
of the Land Acquisition Act, 1894 as well as the National Highways
Act. According to him, the National Highways Act is a complete Code
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which expressly excluded the application of the provisions of the Land
Acquisition Act, and this being so, it is clear that absent discrimination or
manifest arbitrariness, the non-award of solatium and interest that is
awardable under the Land Acquisition Act would not fall foul of Article
14 of the Constitution of India. According to the learned Senior Advocate,
it is not possible to choose between one Acquisition Act and another, as
the National Highways Act alone would apply when land is acquired for
the purpose of National Highways. This being the case, all the judgments
that are cited by the Punjab and Haryana High Court in M/s Golden Iron
and Steel Forging vs. Union of India 2011 (4) RCR (Civil) 375, would,
therefore, not apply. According to him, the Division Bench of the Rajasthan
High Court in Banshilal Samariya vs Union of India 2005-06 Supp RLW
559, correctly distinguished this line of cases and equally correctly followed
a line of judgments under various state town planning Acts, the
Requisitioning and Acquisition of Immovable Property Act, 1952 and the
Defence of India Act, 1971 to arrive at the conclusion that solatium and
interest need not be paid in cases covered under the National Highways
Act. He further argued that given the fact that market value on the date
of publication of the Section 3A notification was to be given at the full
market rate, there could be no fundamental right violated as solatium
and interest that are granted are mere statutory rights which can be
awarded if the statute so enjoins, and equally need not be awarded where
a separate special statute expressly excludes them. He also contended,
somewhat feebly, that since only strips of land adjoining the National
Highways were required to be acquired, in many cases, the landowners
would have properties which would not be subject to acquisition left
with them, obviating any need to pay solatium to them. Finally, he also
referred to and relied upon Article 31-C of the Constitution to argue that
if at all there was an infraction of Article 14, the Amendment Act of
1997 to the National Highways Act, 1956, enacting Sections 3A to 3J,
being in furtherance of the Directive Principle contained in Article 39(b),
would be shielded from attack on the ground that Article 14 of the
Constitution has been violated.
5. Shri Amit Sibal, learned Senior Advocate, together with Shri
Neeraj Kumar Jain, defended the view of the Punjab and Haryana High
Court in M/s Golden Iron and Steel Forging (supra) by pointing out
that the object sought to be achieved by the 1997 Amendment Act to the
National Highways Act, 1956 was far removed from the Directive
Principle contained in Article 39(b) and, therefore, did not receive the
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protection of Article 31-C of the Constitution of India. They argued that
the main object of the Amendment Act was the speedy implementation
of Highway projects, which could only be achieved by expediting the
process of land acquisition. This being the case, excluding solatium and
interest that is awardable under the Land Acquisition Act results in a
discrimination between persons who are similarly situate so far as lands
are acquired by the Union of India from them for the purpose of national
highways as opposed to other public purposes, having no rational relation
to the object of the 1997 amendment. They were at pains to point out
that "solatium" is awarded because of the compulsory nature of
acquisition, which is present whether the land is acquired for the National
Highways or for any other public purpose. They, therefore, argued that
solatium and interest are integral parts of compensation that is awardable
to persons whose lands have been compulsorily expropriated. They took
us through the provisions of the Requisitioning and Acquisition of the
Immovable Property Act, 1952 and the Defence of India Act, 1971, and
stated that the judgments that were delivered under those Acts, which
upheld the non-grant of solatium, was because requisition was first made
of private property for public purposes under those Acts, for which
compensation was granted. Possession having been taken by the State,
such properties could be handed back under those Acts once the purpose
of requisitioning such properties was over. Also, it was only in very limited
circumstances that such requisitioned property was to be acquired, which,
therefore, obviated payment of any solatium. They, therefore, relied upon
the line of authorities which struck down provisions of statutes which
did not grant solatium where land was acquired without first being
requisitioned. They also took us through the judgment of the Division
Bench of the Rajasthan High Court and pointed out that this basic
distinction between the two sets of applicable precedents was not properly
appreciated, leading the High Court to follow the wrong line of authority.
On merits, they argued that in some cases in the Supreme Court itself,
the then Solicitor General, Shri Ranjit Kumar, expressly stated that solatium
will be paid to some of the persons who are covered by notifications
under Section 3A of the National Highways Act. This apart, as was
correctly observed by the Division Bench of the Punjab and Haryana
High Court in the impugned judgment, the National Highway Authority
being "State" under Article 12 of the Constitution of India, cannot file
objections in certain cases and accept arbitration awards in others. In
any case, no case has been made out under the limited jurisdiction to
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challenge arbitral awards under Section 34 of the Arbitration and
Conciliation Act, 1996.
6. Having heard the learned counsel on both sides, it is necessary
to first mention that the National Highways Act, 1956, as originally
enacted, did not provide for acquisition of land. Thus, till the National
Highways Laws (Amendment) Act, 1997, all acquisitions for the purpose
of National Highways were made under the Land Acquisition Act, and
the owners were given, in addition to market value, solatium as well as
interest under the provisions of that Act.
7. Coming to the Amendment Act of 1997, it is important to set
out the Objects and Reasons that led to the aforesaid amendment. They
are:
"1. In order to create an environment to promote private investment
in national highways, to speed up construction of highways and to
remove bottlenecks in their proper management, it was considered
necessary to amend the National Highways Act, 1956 and the
National Highways Authority of India Act, 1988.
2. One of the impediments in the speedy implementation of
highways projects has been inordinate delay in the acquisition of
land. In order to expedite the process of land acquisition, it is
proposed that once the Central Government declares that the land
is required for public purposes for development of a highway, that
land will vest in the Government and only the amount by way of
compensation is to be paid and any dispute relating to compensation
will be subject to adjudication through the process of arbitration.
3. It was also felt necessary to ensure continuity of the status of
bypasses built through private investment. To achieve this, it is
proposed to amend the National Highways Act, 1956 so as to
include the highway stretches situated within any municipal area
as a part of National Highway. Further, as the National Highways
Act, 1956 permits participation of the private sector in the
development of the National Highways, it became imperative to
amend the National Highways Authority of India Act, 1988 so as
to provide that the National Highway Authority of India may seek
the participation of the private sector in respect of the highways
vested in the Authority.
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4. With a view to provide adequate capital and loans to the National
Highways Authority of India by the Central Government, it is
proposed to make amendment in the National Highways Authority
of India Act, 1988.
5. With a view to achieve the above objectives and also as both
Houses of Parliament were not in session and the President was
satisfied that circumstances existed which rendered it necessary
for him to take immediate action, the National Highways Laws
(Amendment) Ordinance, 1997 was promulgated by the President
on the 24th day of January, 1997.
6. The Bill seeks to replace the aforesaid Ordinance."
8. Pursuant to this, the amendments that were made to the National
Highways Act, 1956 with which we are directly concerned, are set out
hereinbelow:
"3. Definitions. In this Act, unless the context otherwise requires,-
(a) "competent authority" means any person or authority authorised
by the Central Government, by notification in the Official Gazette,
to perform the functions of the competent authority for such area
as may be specified in the notification;
(b) "land" includes benefits to arise out of land and things attached
to the earth or permanently fastened to anything attached to the
earth.
3A. Power to acquire land, etc. - (1) Where the Central
Government is satisfied that for a public purpose any land is required
for the building, maintenance, management or operation of a
national highway or part thereof, it may, by notification in the
Official Gazette, declare its intention to acquire such land.
(2) Every notification under sub-section (1) shall give a brief
description of the land.
(3) The competent authority shall cause the substance of the
notification to be published in two local newspapers, one of which
will be in a vernacular language.
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3B. Power to enter for survey, etc.- On the issue of a notification
under sub-section (1) of section 3A, it shall be lawful for any
person, authorised by the Central Government in this behalf, to-
(a) make any inspection, survey, measurement, valuation or
enquiry;
(b) take levels;
(c) dig or bore into sub-soil;
(d) set out boundaries and intended lines of work;
(e) mark such levels, boundaries and lines placing marks and
cutting trenches; or
(f) do such other acts or things as may be laid down by rules
made in this behalf by that Government.
3C. Hearing of objections - (1) Any person interested in the land
may, within twenty-one days from the date of publication of the
notification under sub-section (1) of section 3A, object to the use
of the land for the purpose or purposes mentioned in that subsection.
(2) Every objection under sub-section (1) shall be made to the
competent authority in writing and shall set out the grounds thereof
and the competent authority shall give the objector an opportunity
of being heard, either in person or by a legal practitioner, and may,
after hearing all such objections and after making such further
enquiry, it any, as the competent authority thinks necessary, by
order, either allow or disallow the objections.
Explanation.-For the purposes of this sub-section, "legal
practitioner" has the same meaning as in clause (i) of sub-section
(1) of section 2 of the Advocates Act, 1961 (25 of 1961).
(3) Any order made by the competent authority under sub-section
(2) shall be final.
3D. Declaration of acquisition- (1) Where no objection under subsection (1) of section 3C has been made to the competent authority
within the period specified therein or where the competent authority
has disallowed the objection under subsection (2) of that section,
the competent authority shall, as soon as may be, submit a report
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accordingly to the Central Government and on receipt of such
report, the Central Government shall declare, by notification in
the Official Gazette, that the land should be acquired for the
purpose or purposes mentioned in sub-section (1) of section 3A.
(2) On the publication of the declaration under sub-section (1),
the land shall vest absolutely in the Central Government free from
all encumbrances.
(3) Where in respect of any land, a notification has been published
under sub-section (1) of section 3A for its acquisition but no
declaration under sub-section (1) has been published within a
period of one year from the date of publication of that notification,
the said notification shall cease to have any effect:
Provided that in computing the said period of one year, the period
or periods during which any action or proceedings to be taken in
pursuance of the notification issued under sub-section (1) of section
3A is stayed by an order of a court shall be excluded.
(4) A declaration made by the Central Government under subsection (1) shall not be called in question in any court or by any
other authority.
3E. Power to take possession.- (1) Where any land has vested in
the Central Government under sub-section (2) of section 3D, and
the amount determined by the competent authority under section
3G with respect to such land has been deposited under sub-section
(1) of section 3H, with the competent authority by the Central
Government, the competent authority may by notice in writing
direct the owner as well as any other person who may be in
possession of such land to surrender or deliver possession thereof
to the competent authority or any person duly authorised by it in
this behalf within sixty days of the service of the notice.
(2) If any person refuses or fails to comply with any direction
made under sub-section (1), the competent authority shall apply-
(a) in the case of any land situated in any area falling within the
metropolitan area, to the Commissioner of Police;
(b) in case of any land situated in any area other than the area
referred to in clause (a), to the Collector of a District, and such
Commissioner or Collector, as the case may be, shall enforce the
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surrender of the land, to the competent authority or to the person
duly authorised by it.
3F. Right to enter into the land where land has vested in the Central
Government. - Where the land has vested in the Central
Government under section 3D, it shall be lawful for any person
authorised by the Central Government in this behalf, to enter and
do other act necessary upon the land for carrying out the building,
maintenance, management or operation of a national highway or
a part thereof, or any other work connected therewith.
3G.