Abstract
Private land can be acquired through Central legislations as well as state laws and regulations, to serve a broader ‘public purpose’. ‘The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013’ is the major active legislation governing land acquisition in India. Land Acquisition is a vast topic; however, the scope of this article is restricted to the question of whether the state can make classifications among similarly placed landowners for the purpose of acquisition. This article first discusses the tenets of Article 14 and why is there a need to treat unequals unequally for any classification to be reasonable. Secondly, we discuss if similarly positioned owners can be compensated differently, and what can be a reasonable classification for determination of compensation if the object of the legislation is to compulsorily acquire land for ‘public purpose’. Furthermore, we discuss an ongoing case pending disposal in the Supreme Court wherein, a distinction was made by the Noida Authority classifying landowners as ‘Pushtaini’ and ‘Gair Pushtaini,’ and on the basis of the same, differential compensations were awarded to both these equal categories of landowners.
I. Introduction
Land is a limited subject, the quantum of which cannot be increased or decreased by human standards. Owing to this very limitation, land is regarded as a valuable possession and there is constant conflict with regard to ownership rights, across all corners of the world.
Property never carried a stagnant meaning with it, but it kept changing with time. The same can be understood by the observations made by Jawaharlal Nehru that “there was a period when there was property in human beings. The king owned everything – the land, the cattle, the human beings. Property used to be measured in terms of the cows and bullocks you possessed in old days. Property in land then became more important.”[1] In a Monarch structure, the King possessed all of the land, but in the modern civil setup, private ownership has been the way of the day. Further, the acclaimed philosopher, Jock Locke famously accorded the ‘right to property’ an equivalent status to that of a natural right of an individual.[2] According to him, an individual’s right to property must be protected as such is the very essence of that individual entering or wanting to be a part of civil society. However, both these people believed that such a right cannot be absolute. When a broader ‘public purpose’ is required to be served, the sovereign must have the power to acquire private lands for fulfilment of the same.
Until 2013, the major piece of regulation governing land acquisition in India was ‘The Land Acquisition Act, 1894,’ but there were certain limitations with the same, especially that there was no provision regarding rehabilitation or resettlement towards the aggrieved owners whose land had been acquired. Land carries multiple connotations with it involving social repute. As Rosco Pound suggests, in an effective society, an individual carries three forms of interest being private, public and social.[3] In 2013, keeping these interests in perspective, the Indian Parliament passed ‘The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013’ (Hereinafter, the ‘Land Acquisition Act of 2013’), which came into effect in 2014. The Act provides for rehabilitation as well as resettlement of the aggrieved owners (along with the compensation awarded), which was previously neglected by the Land Acquisition Act of 1894.
Thus, it is a clear position that the Government can acquire private land for the fulfilment of a public purpose using its power of eminent domain. The acquisition can be done for the construction of roads, railway lines and other public facilities. Through this article, the authors attempt to respond to the long-standing debate whether while acquiring land, can the Government make distinctions/classifications with respect to the landowners, in respect to awarding compensations.
II. Can Classifications Be Made?
It is a well-established legal premise that all laws must have the same nature, be universally applicable, and apply equally to all people who are similarly placed/situated. This right is guaranteed under Article 14 of the Indian Constitution which is enforceable in nature of a fundamental right.
Article 14’s opening portion, “equality before the law,” appears to have drawn inspiration from the English Constitution and establishes the equality of all people living on Indian territory in terms of their civil rights. The second portion, “equal protection of laws,” states that everyone shall be provided with equal protection in the exercise of their rights and liberties without discrimination on the basis of birth, caste creed, sex, or religion whatsoever. This portion draws inspiration from the US Constitution.[4]
In Sri Srinivasa Theatre v Government of Tamil Nadu[5], the Supreme Court held that although both these expressions may prima facie seem to mean the same thing, they carry an intrinsic difference within them. ‘Equality before the law’ is a principle signifying that people who are equally placed must be treated alike, in a similar manner. Whereas, the second portion, ‘equal protection of laws’ binds an obligation on the state to take all measures for people who are similarly placed to be treated equally, without any discrimination made on any basis. As a result, the State is bound to provide equal treatment under both of these expressions.
However, this principle only applies to people who are similarly placed, otherwise, it defeats the very purpose of guaranteeing equal treatment. Equals must be treated equally and unequal treatment of equals would be violative of Article 14. But it is equally well-established that unequals cannot be treated equally. Equal treatment to unequals would be violative of ‘equal protection clause’ enshrined by Article 14 of the Constitution.[6]
Not all people are similarly situated and therefore, it becomes practically impossible to ensure equality for everyone without any differential treatment being accorded to unequal groups. Therefore, based on the doctrine of ‘reasonable classification,’ certain classifications are permitted. The Supreme Court has laid down the test of ‘reasonable classification,’ whereby for determining if any classification made by the legislature is valid or not, it must pass the twin test. Firstly, the classification made should be on the basis of a substantial distinction (intelligible differentia) between the groups of people (unequally positioned). Secondly, the classification should have a direct connection/link with the objective sought to be achieved by such classification.[7]
A valid classification must include all who ‘naturally’ belong to the class, all who possess a common disability, attribute, or classification and there must be some natural and substantial differentiation between those included in the class and those it leaves untouched. Such a classification moreover must have nexus with the object sought to be achieved. [8]
So, to say, even though no classification between landowners should ideally be made by the legislature for acquiring land, if there are inherent distinctions between the landowners which would render it impossible for the legislature to ensure equality (if treated equally), the intended classification can be made therein. Such classification is subject to passing the twin test. It is of course true that in case of plain abuse in regard to the classifications of landowners, the courts will intervene.
III. Can Owners Be Compensated Differently?
Land can be legally acquired through Central legislations such as Land Acquisition Act of 2013, Special Economic Zone Act of 2005, Railways Act of 1989 etc. as well as by state legislations and rules. Irrespective of the statutory means for acquiring land, there can be no distinction made between similarly placed landowners while computing and awarding compensations.
A seven-judge bench of the Supreme Court in the case Nagpur Improvement Trust v Vithal Rao[9] agreeing that the legislature can make a reasonable classification based on an intelligible differentia, held that the object sought to be achieved cannot be discriminatory. If the object is to discriminate against one section of the minority, the discrimination cannot be justified on the ground that there is a reasonable classification among the unequal groups of landowners.
The next question to address here is what can be a reasonable classification for the purpose of determining compensation if the object of the legislation is to compulsorily acquire land for public purpose?
The Apex body, in this regard, held that different principles of compensation cannot be formed for lands acquired on the basis that the owner is old, young, healthy or ill, tall or short, or whether the owner has inherited the property or built it with his own efforts, or whether the owner is a politician or an advocate. Such classifications would not sustain because the objective is to compulsorily acquire land for public purpose. This objective is equally met whether the land belongs to one type of owner or another.
Article 14 confers an individual right to equality and in order to justify classification, there should be something which justifies a different treatment of this individual. Ordinarily, a classification based on public purpose is not permissible under Article 14 for the purpose of determining compensation. As far as the owners are concerned, it does not matter as to which authority is acquiring the land for public purpose, the compensation cannot be computed on different criteria.
IV. Case Study: Differential Compensation in Land Acquisition (Classification of Landowners)
In the late 1970s, when the National Capital of Delhi was faced with huge migration and the population was considerably increasing, the authorities feared that in the forthcoming years, the population of Delhi would rise to uncontrollable levels and the city administration would not be able to accommodate the incoming population. In lieu of this, the proposition of establishing National Capital Regions (NCRs) was tabled and consequently, NOIDA (New Okhla Industrial Development Authority) was constructed in 1991.
The GNIDA (Greater Noida Industrial Development Authority), in one of its Board Meetings, had passed a notification whereby, two categories of landowners were created. The ‘Pushtaini’ and the ‘Gair Pushtaini’ landowners. Pushtaini landowners were those who had acquired their land (either by succession or acquired personally) before 28.01.199 whereas, Gair Pushtaini landowners were those who had acquired their land after 28.01.1991.
In the year 2007, the State of UP had published a notification under Section 4 r/w Section 17 of the Land Acquisition Act, 1894 for the acquisition of 320.25 acres of land in village Ithera for the purpose of Planned Industrial Development (PID) in the district Gautam Buddh Nagar through GNIDA.
The compensation for both these categories of landowners were computed on different rates for acquisition. The Pushtaini owners were awarded as much as Rs. 850 per square yard for their land, whereas the Gair Pushtaini were awarded Rs. 739 per square yard, being substantially lesser than what was granted to the Pustaini owners.
The disparity is quite evident at this stage. The question is can such a notification classifying similarly placed landowners into different categories for computation of compensation be allowed to sustain? Does it not violate the principle of ‘equal protection of laws’ enshrined in Article 14? Or can such a classification be said to be a reasonable classification after duly passing the twin test?
Representatives from the Gair Pustaini owners filed a Writ petition before the High Court of Allahabad, being Ramesh Chandra Sharma & Ors. v State of UP & Ors.[10] claiming that the said classification was arbitrary, without any basis and violative of Article 14 of the Constitution. The said discrimination in the payment of compensation has been done even though the ‘Land Acquisition Act’ does not in any manner distinguish one class of landowners from another class. While the Petition was pending before a Division Bench of the High Court, another Division Bench of the Allahabad High Court rendered a judgement involving a similar issue in the case of Smt. Madhuri Srivastava v State of UP.[11]
Let us discuss the Madhuri Srivastava case first. The concern of the Petitioners was that the category of Gair Pushtaini landowners were denied the additional compensation of Rs. 310 per square yard, as opposed to the Pushtaini owners.
The claim was resisted on the grounds that the said classification is valid as the Pushtaini owners are the people residing in the area before the formation of Noida and therefore, are the actual inhabitants of the area. That they are the real ‘sons of the soil’ and ’tillers of the land’. Acquiring their land would cause grave and irreparable hardships to them as it would take away their very source of income, which is their land. Whereas, on the other side, Gair Pushtaini owners are the people who migrated to Noida after it was announced to be an NCR and after realizing the prospects of its growth. For Gair Pushtaini owners, their property was more of an investment and their whole livelihoods would not be prejudiced upon such acquisition. The court accepted this argument.
Now, after establishing that the classification was reasonable, the second step was to establish that the classification had a direct connection with the objective sought to be achieved by it. The Allahabad High Court in the Madhuri Srivastava case held that the objective of the classification was ‘proper rehabilitation of the actual inhabitants i.e., the sons of the soil.’ So, to fulfil this objective of proper rehabilitation to actual inhabitants, the classification was necessary and thereby, the same passes the twin test of reasonable classification and is not violative of Article 14.
After the Division bench judgement was delivered in the Madhuri Srivastava case, another Division bench of the High Court got an opportunity to adjudicate a similar issue in the Ramesh Chandra case. Herein, the bench disagreed with the judgement rendered in the Madhuri Srivastava case. The bench observed that the objective of the classification was to compulsorily acquire the land for public purpose. That being the object, the connection between the classification and the objective sought is not made and hence, the classification stands violative of Article 14.
However, since both the judgements were rendered by Division benches of the same High Court, the bench in the Ramesh Chandra case referred the matter to a Full bench, which upon pursuing the case agreed with the Madhuri Srivastava judgement and rendered the classification to be valid and standing.
The aggrieved Petitioners have now approached the Supreme Court under an SLP and the same is at the final stage pending a decision. Until a judgement in this batch of SLPs is rendered, it is tough to conclude on the established position of law regarding such classifications, where the objective of the classification has been interpreted differently by different benches.
However, as advocates representing the aggrieved parties in this case, we are in strong agreement with the judgement rendered by the Division bench in the Ramesh Chandra case. The Nagpur Improvement case is a strong precedent whereby, the Supreme Court has held that this sort of classification is not sustainable because the object is to compulsorily acquire land for a public purpose, which is achieved whether the land belongs to one type of owner or another type.
Concluding Remarks
It is now well settled that the State can make a reasonable classification for the purpose of land acquisition. It is equally well-settled that the classification, in order to be reasonable must satisfy two tests: (1) the classification must be founded on intelligible differentia (reasonable distinction) and (2) the differentia must have a rational with the objection sought to be achieved by the legislation in question.
The Land Acquisition Act of 1894 or the Land Acquisition Act of 2013 does not in any manner distinguish between one class of owners from another class. The Land Acquisition Act of 2013 provides for payment of compensation to be paid uniformly to all classes of landowners on the basis of the market value of their land. The only distinction that can be made is the rate of the land which largely depends on the location of the land (or any other criterion) affecting the market value of the land.
Thereby, all the similarly placed landowners must be treated equally while awarding compensations, and any difference in the basis of compensation to be granted to landowners must be declared arbitrary and unconstitutional, as being violative of Article 14.
[1] A.K Ganguli, RIGHT TO PROPERTY: ITS EVOLUTION AND CONSTITUTIONAL DEVELOPMENT IN INDIA, 48 Journal of ILI 489, 492-493
[2] John Locke, the Second Treatise, in Two Treatises of Government§123, (Peter Laslett ed., Cambridge Univ. Press 1960).
[3] Gochhayat, Sai Abhipsa, ‘Social Engineering by Roscoe Pound’: Issues in Legal and Political Philosophy (November 15, 2010)
[4] Article 14 – Equality Before Law and Equality protection of the law (manupatra.com)
[5] 1992 SCR (2) 164
[8] AIR 1970 AP 318
[9] (1973) 1 SCC 500
[10] WP (C) No. 49326
[11] (2016) SCC OnLine All 2832.
