A Supreme Court Bench of Justice Krishna Murari and Justice S. Ravindra Bhat has held that the classification made between Pushtaini and Gair-Pushtaini land-holders by the Allahabad High Court is violative of Article 14 of the Indian Constitution.

Senior Counsel Pradeep Kant appeared for the Appellants. Senior Counsel Ravindra Kumar appeared for Greater Noida and Senior Counsel Ravindra Kumar Raizada appeared for the State of UP.

In this case, writ petitions were filed by certain landowners whose land was acquired by NOIDA. The Allahabad High Court had passed orders in favor of NOIDA.

The Apex Court framed the following issues and answered them in the following manner:

(i) Whether the Appellants are bound by the compensation as per the agreement under the Land Acquisition rules, and have waived off their right to seek enhanced compensation?

The Court observed that "The issue involved in adjudication is not in respect of an agreement entered into by the appellants. Similar agreements were also entered into with the Authority by such identically situated landholders who have been granted additional compensation subsequent to the agreement by carving out a distinction on the basis of period of residence/occupation of the land which was acquired by creating an artificial classification of ‘Pushtaini’ and ‘Gair-Pushtaini’ landholders."

Furthermore, the Court noted that since the issue of additional compensation by making an artificial classification of ‘pushtaini’ and ‘Gair-pushtani’ was not in existence at the time of the agreement, there was no occasion to challenge the same.

In similar context, the Court was of the opinion that "specifically in the context of the grant of ex-gratia payment, it is to be noted that the said payment granted to Pushtaini landowners through a separate notification, was assessed, and given, after the agreement was signed by both, Pushtaini and Gair-pushtaini Landowners. The Appellants herein, under those circumstances, could not have challenged the agreement vis a vis the exgratia payment on grounds of violation of Article 14, when no such violation existed at the time of the agreement. No man can be expected to predict a future violation of their rights and file a pre-emptive appeal."

Accordingly, the Court concluded that the Appellants had not forfeited their right to seek revised compensation

(ii) Whether the classification made under the Land Acquisition Act, and the UP Land Acquisition Rules, 1997 between Pushtaini Landowners and Gair-pushtaini Landowners for the payment of compensation at different rates is liable to be struck down as violative of Article 14 of the Constitution?

The Court observed that in order to survive the rigors of Article 14, the impugned classification must clear the Reasonable Classification test and Wednesbury Principle, and by extension the Proportionality test.

Holding that the impugned classification was liable to be struck down as violative of Article 14 of the Constitution, the Court observed that "While the classification made by Greater Noida has been based on the object of giving fair compensation, however, such a laudable object of the classification would stand breached by the effects of such a classification, creating a dissonance between the object and its effect. Many Gair-pushtaini landholders, whose main area of residence or their main source of income is also the subject land, would be subject to great discrimination and injustice, if the same compensation that has been granted to the pushtaini landholders is not extended to them."

In furtherance of the same, the Court also observed that "The classification made by GNOIDA does not find its footing in the Land Acquisition Act, or the UP-Land Acquisition Rules, and hence is contrary to law. The said classification also suffers from not taking into account relevant considerations. The Authority, without taking into account any empirical data or calculating any possibility of Gair-pushtaini landowners being rendered landless or without a primary source of income, made the impugned classification. These relevant factors, by not being taken into account, can and would cause great injustice to Gair-pushtaini landowners."

In the same context, the Court was of the considered opinion that "The classification, as discussed above, if allowed to exist, can lead to several Gair-pushtaini landowners who may also need to be rehabilitated, cannot rehabilitate themselves without compensation for the same. This circumstance alone besides being discriminatroy pits the said classification against Section 23 of the Act, causing an insubordination to the 1894 Act. Such a mischief, if allowed to exist, would not only nullify the purpose of the Act, but also violate the third and fourth principle of the proportionality test, and hence is liable to be struck down. Further, it is also important to note that the classification, even if allowed to exist, does not come with any safeguards against its potential abuse. As mentioned above, the said notification by way of its classification creates disastrous mischief, and the notification does nothing to remedy such potential abuse. No guidelines for the said classification exist, nor are there any bars placed. If such classification is left unchecked, it may lead to bad precedence, and disastrous ramifications in the future."

(iii) Whether the classification made by the Full-Bench of the High Court between Pushtaini landowners and Gair-pushtaini landowners is in contravention to the law laid down by this Hon’ble Court in the case of Nagpur Improvement Trust and Another vs. Vithal Rao and Others (1973) 1 SCC 500?

The Court held that the classification made was violative of the law laid down in the Nagpur Trust case, as well as, Article 14 of the Constitution. In that context, it was of the considered opinion that "When the purpose of the acquisition of the land is for the benefit of the public at large, then the nature of the owner of the said land is inconsequential to the purpose. If such a classification on the basis of the nature of owner is allowed, then on the same grounds, there might be a possibility of future classifications where powerholding members of the society may get away with a larger compensation, and the marginalized may get lesser compensation. This is precisely what this Court in the abovementioned judgment predicted, and to preempt such arbitrary classification, clarified the position in law. The Land Acquisition Act does not distinguish between classes of owners, and uniformly provides compensation to all class of landowners."

Therefore, the impugned judgment of the High Court was set aside and the writ petition was allowed. No orders were passed as to costs.

Cause Title: Ramesh Chandra Sharma & Ors. v. State of Uttar Pradesh & Ors.

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Suprme CourtJustice Krishna MurariJustice Ravindra BhatNOIDA

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