Holding

Section 3J, to the extent that it excludes solatium and interest, violates Article 14 and is unconstitutional, and the Land Acquisition Act's provisions on solatium and interest apply to acquisitions under the National Highways Act.

Summary

The Supreme Court examined whether Section 3J of the National Highways Act, 1956, which excludes the Land Acquisition Act's provisions on solatium and interest, violates Article 14 of the Constitution. The Court held that solatium is an integral part of compensation for compulsory acquisition and that the 1997 amendment to the National Highways Act lacks a rational nexus with Article 39(b) to merit protection under Article 31C. Consequently, the exclusion of solatium and interest is discriminatory and unconstitutional. The Court also noted that the Right to Fair Compensation and Transparency in Land Acquisition Act, 2013, extends solatium and interest to acquisitions under the National Highways Act. Accordingly, the provisions of the Land Acquisition Act relating to solatium and interest apply to National Highways acquisitions, rendering Section 3J unconstitutional to that extent.

Issues considered

The constitutionality of Section 3J of the National Highways Act, 1956, in light of Article 14.
Whether the 1997 amendment to the National Highways Act can be shielded by Article 31C of the Constitution.
Whether solatium forms part of the compensation payable for compulsory land acquisition.
Whether the classification between lands acquired under the National Highways Act and the Land Acquisition Act violates the equality principle.

Legislation cited

Arbitration and Conciliation Act, 1996s. 34
Constitution of Indias. Art.14, s. Art.31A, s. Art.31C, s. Art.39(b)
Land Acquisition Act, 1894s. 23(1A), s. 23(2), s. 25, s. 28, s. 31
National Highways Act, 1956s. 3A, s. 3D, s. 3G, s. 3G(2), s. 3G(7), s. 3H, s. 3J
Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013s. 105, s. 113

Subjects

solatiumcompensationland acquisitionNational Highways ActArticle 14Article 31CDirective Principlesequalityconstitutional validityarbitration

Judgment

[2019] 13 S.C.R. 49 49

UNION OF INDIA & ANR. A
v.
TARSEM SINGH & ORS.
(Civil Appeal No. 7064 of 2019)
SEPTEMBER 19, 2019 B
[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 C
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.
D
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 E
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 land-
owners has no relation to the object sought to be achieved by the
F
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 G
hence unconstitutional – Constitution of India – Arts. 14, 31-C and
39(b).
Constitution of India
Art. 31-C – Protection under – When available – Held: For
H
49
50 SUPREME COURT REPORTS [2019] 13 S.C.R.

A 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
B 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
C 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
D 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
E 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
F
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
G 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
H made to District Judges and appeals therefrom to the High Court
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 51

and Supreme Court have been obviated. Section 3G(7) does not A
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 B
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 C
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]
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 E
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 F
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
G
Schedule also includes The Requisitioning and Acquisition of
Immovable Property Act, 1952. By a Notification dated 28 th
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
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52 SUPREME COURT REPORTS [2019] 13 S.C.R.

A 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
B 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
C 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
D 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
E 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.
F
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]
G
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.

H
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 53

3.2 The Objects and Reasons which led to the 1997 A
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 B
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 C
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] D
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 E
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 F
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 G
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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54 SUPREME COURT REPORTS [2019] 13 S.C.R.

A 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
B 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
C 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.

D 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.

E #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
F 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
G 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
H
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 55

this object, as it is nobody’s case that land acquisition for the A
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 B
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 C
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 D
(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 – E
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 F
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 G
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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56 SUPREME COURT REPORTS [2019] 13 S.C.R.

A 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
B 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]

C 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
D 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
E 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]
F
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 1 st January,
G 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 28 th 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

H
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 57

##
Nagpur Improvement Trust case, as the Central Government A
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 B
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 C
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; 97- D
B; 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 E
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 F
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 G
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-F-
H; 102-A]
H
58 SUPREME COURT REPORTS [2019] 13 S.C.R.

A 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
B
[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
C
[1984] 1 SCR 725 distinguished Para 14
[1989] 2 SCR 518 distinguished Para 14
[1989] 2 SCR 544 distinguished Para 15
D [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
E [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
F
required a re-look
[2003] 3 SCR 647 distinguished and Para 29
required a re-look
(2016) 12 SCC 699 referred to Para 30
G [1985] 3 Suppl. SCR 1025 distinguished Para 32
[1980] 3 SCR 290 relied on Para 33
[2011] 3 SCR 1 distinguished Para 34

H
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 59

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7064 A
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
B
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, C
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, D
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, E
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 F
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 G
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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60 SUPREME COURT REPORTS [2019] 13 S.C.R.

A 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
B
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 11 th 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
C 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
D
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
E 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.
F
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,
G 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
H Act. According to him, the National Highways Act is a complete Code
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 61
[R. F. NARIMAN, J.]

which expressly excluded the application of the provisions of the Land A
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
B
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 C
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
D
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, E
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
F
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 G
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 H
62 SUPREME COURT REPORTS [2019] 13 S.C.R.

A 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
B
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
C 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
D
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
E 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
F
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
G 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
H
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 63
[R. F. NARIMAN, J.]

challenge arbitral awards under Section 34 of the Arbitration and A
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 B
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 C
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 D
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 E
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 F
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 G
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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64 SUPREME COURT REPORTS [2019] 13 S.C.R.

A 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
B 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.
C 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:
D
“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
E 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
F
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
G
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.
H
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 65
[R. F. NARIMAN, J.]

3B. Power to enter for survey, etc.- On the issue of a notification A
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; B

(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 C
(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
D
notification under sub-section (1) of section 3A, object to the use
of the land for the purpose or purposes mentioned in that sub-
section.
(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 E
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 F
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.
G
3D. Declaration of acquisition- (1) Where no objection under sub-
section (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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66 SUPREME COURT REPORTS [2019] 13 S.C.R.

A 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),
B 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
C 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.
D
(4) A declaration made by the Central Government under sub-
section (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
E 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
F 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—
G (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
H
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 67
[R. F. NARIMAN, J.]

surrender of the land, to the competent authority or to the person A
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 B
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. Determination of amount payable as compensation.- (1) Where
any land is acquired under this Act, there shall be paid an amount C
which shall be determined by an order of the competent authority.
(2) Where the right of user or any right in the nature of an easement
on, any land is acquired under this Act, there shall be paid an
amount to the owner and any other person whose right of
enjoyment in that land has been affected in any manner
whatsoever by reason of such acquisition an amount calculated D
at ten per cent, of the amount determined under sub-section (1),
for that land.
(3) Before proceeding to determine the amount under sub-section
(1) or sub-section (2), the competent authority shall give a public
notice published in two local newspapers, one of which will be in E
a vernacular language inviting claims from all persons interested
in the land to be acquired.
(4) Such notice shall state the particulars of the land and shall
require all persons interested in such land to appear in person or
by an agent or by a legal practitioner referred to in sub-section (2) F
of section 3C, before the competent authority, at a time and place
and to state the nature of their respective interest in such land.
(5) If the amount determined by the competent authority under
sub-section (1) or sub-section (2) is not acceptable to either of
the parties, the amount shall, on an application by either of the G
parties, be determined by the arbitrator to be appointed by the
Central Government.
(6) Subject to the provisions of this Act, the provisions of the
Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to
every arbitration under this Act.
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68 SUPREME COURT REPORTS [2019] 13 S.C.R.

A (7) The competent authority or the arbitrator while determining
the amount under sub-section (1) or sub-section (5), as the case
may be, shall take into consideration—
(a) the market value of the land on the date of publication of
the notification under section 3A;
B (b) the damage, if any, sustained by the person interested at
the time of taking possession of the land, by reason of the
severing of such land from other land;
(c) the damage, if any, sustained by the person interested at
the time of taking possession of the land, by reason of the
C acquisition injuriously affecting his other immovable property
in any manner, or his earnings;
(d) if, in consequences of the acquisition of the land, the person
interested is compelled to change his residence or place of
business, the reasonable expenses, if any, incidental to such
D change.
3H. Deposit and payment of amount. - (1) The amount determined
under section 3G shall be deposited by the Central Government in
such manner as may be laid down by rules made in this behalf by
that Government, with the competent authority before taking
E possession of the land.
(2) As soon as may be after the amount has been deposited
under sub-section (1), the competent authority shall on behalf of
the Central Government pay the amount to the person or persons
entitled thereto.
F (3) Where several persons claim to be interested in the amount
deposited under sub-section (1), the competent authority shall
determine the persons who in its opinion are entitled to receive
the amount payable to each of them.
(4) If any dispute arises as to the apportionment of the amount or
G any part thereof or to any person to whom the same or any part
thereof is payable, the competent authority shall refer the dispute
to the decision of the principal civil court of original jurisdiction
within the limits of whose jurisdiction the land is situated.
(5) Where the amount determined under section 3G by the
arbitrator is in excess of the amount determined by the competent
H
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 69
[R. F. NARIMAN, J.]

authority, the arbitrator may award interest at nine per cent, per A
annum on such excess amount from the date of taking possession
under section 3D till the date of the actual deposit thereof.
(6) Where the amount determined by the arbitrator is in excess of
the amount determined by the competent authority, the excess
amount together with interest, if any, awarded under sub-section B
(5) shall be deposited by the Central Government in such manner
as may be laid down by rules made in this behalf by that
Government, with the competent authority and the provisions of
sub-sections (2) to (4) shall apply to such deposit.
3-I. Competent authority to have certain powers of civil court.- C
The competent authority shall have, for the purposes of this Act,
all the powers of a civil court while trying a suit under the Code of
Civil Procedure, 1908 (5 of 1908), in respect of the following
matters, namely:—
(a) summoning and enforcing the attendance of any person D
and examining him on oath;
(b) requiring the discovery and production of any document;
(c) reception of evidence on affidavits;
(d) requisitioning any public record from any court or office;
E
(e) issuing commission for examination of witnesses.
3J. Land Acquisition Act 1 of 1894 not to apply.- Nothing in the
Land Acquisition Act, 1894 shall apply to an acquisition under this
Act.”
9. Keeping in view the object of reducing delay and speedy F
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, 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 G
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
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70 SUPREME COURT REPORTS [2019] 13 S.C.R.

A 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
B
and Conciliation Act, 1996. Thus, delays in references made to District
Judges and appeals therefrom to the High Court 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
C 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.
10. Before embarking on a discussion as to the constitutional validity
D of the Amendment Act, it is important to first understand what is meant
by the expression “solatium”. In Sunder vs Union of India (2001) 7 SCC
211, a bench of 5 judges of this Court laid down the nature of solatium as
follows:
“21. It is apposite in this context to point out that during the enquiry
E contemplated under Section 11 of the Act the Collector has to
consider the objections which any person interested has stated
pursuant to the notice given to him. It may be possible that a
person so interested would advance objections for highlighting his
disinclination to part with the land acquired on account of a variety
of grounds, such as sentimental or religious or psychological or
F traditional etc. Section 24 emphasises that no amount on account
of any disinclination of the person interested to part with the land
shall be granted as compensation. That aspect is qualitatively
different from the solatium which the legislature wanted to provide
“in consideration of the compulsory nature of the acquisition”.
G 22. Compulsory nature of acquisition is to be distinguished from
voluntary sale or transfer. In the latter, the landowner has the
widest advantage in finding out a would-be buyer and in negotiating
with him regarding the sale price. Even in such negotiations or
haggling, normally no landowner would bargain for any amount in
H consideration of his disinclination to part with the land. The mere
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 71
[R. F. NARIMAN, J.]

fact that he is negotiating for sale of the land would show that he A
is willing to part with the land. The owner is free to settle terms of
transfer and choose the buyer as also to appoint the point of time
when he would be receiving consideration and parting with his
title and possession over the land. But in the compulsory acquisition
the landowner is deprived of the right and opportunity to negotiate
B
and bargain for the sale price. It depends on what the Collector or
the court fixes as per the provisions of the Act. The solatium
envisaged in sub-section (2) “in consideration of the compulsory
nature of the acquisition” is thus not the same as damages on
account of the disinclination to part with the land acquired.”
Thus, the solatium that is paid to a landowner is on account of the C
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 D
that is payable for compulsory acquisition of land.
11. As has been stated by us hereinabove, solatium and interest
were awarded to landowners for compulsory acquisition of their lands
for the purpose of National Highways until the 1997 Amendment Act.
Interestingly, after the Land Acquisition Act has been repealed and The E
Right to Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act, 2013 has come into force, Section
105 of the said Act provides as under:
“105. Provisions of this Act not to apply in certain cases or
to apply with certain modifications.- (1) Subject to sub- F
section (3), the provisions of this Act shall not apply to the
enactments relating to land acquisition specified in the
Fourth Schedule.
(2) Subject to sub-section (2) of section 106, the Central
Government may, by notification, omit or add to any of the G
enactments specified in the Fourth Schedule.
(3) The Central Government shall, by notification, within one year
from the date of commencement of this Act, direct that any of the
provisions of this Act relating to the determination of compensation
in accordance with the First Schedule and rehabilitation and
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72 SUPREME COURT REPORTS [2019] 13 S.C.R.

A resettlement specified in the Second and Third Schedules, being
beneficial to the affected families, shall apply to the cases of land
acquisition under the enactments specified in the Fourth Schedule
or shall apply with such exceptions or modifications that do not
reduce the compensation or dilute the provisions of this Act relating
to compensation or rehabilitation and resettlement as may be
B
specified in the notification, as the case may be.
(4) A copy of every notification proposed to be issued under sub-
section (3), shall be laid in draft before each House of Parliament,
while it is in session, for a total period of thirty days which may be
comprised in one session or in two or more successive sessions,
C and if, before the expiry of the session immediately following the
session or the successive sessions aforesaid, both Houses agree
in disapproving the issue of the notification or both Houses agree
in making any modification in the notification, the notification shall
not be issued or, as the case may be, shall be issued only in such
D modified form as may be agreed upon by both the Houses of
Parliament.”
12. The First Schedule to the said 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,
E constitutes minimum compensation package to be given to those whose
land is acquired. The Fourth Schedule to this 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
F 2013 Act, it is provided that the 2013 Act compensation provisions will
apply to acquisitions that take place under the 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
G 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.
Article 31-C
13. Articles 31-C and 39(b) of the Constitution of India read as
H under:
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 73
[R. F. NARIMAN, J.]

“31C. Saving of laws giving effect to certain directive principles.- A
Notwithstanding anything contained in article 13, no law giving
effect to the policy of the State towards securing all or any of the
principles laid down in Part IV shall be deemed to be void on the
ground that it is inconsistent with, or takes away or abridges any
of the rights conferred by article 14 or article 19 and no law
B
containing a declaration that it is for giving effect to such policy
shall be called in question in any court on the ground that it does
not give effect to such policy:
Provided that where such law is made by the Legislature of a
State, the provisions of this article shall not apply thereto unless
such law, having been reserved for the consideration of the C
President, has received his assent.”
“39. Certain principles of policy to be followed by the State.– The
State shall, in particular, direct its policy towards securing -
xxx xxx xxx D
(b) that the ownership and control of the material resources of
the community are so distributed as best to subserve the common
good;
xxx xxx xxx”
E
An interesting discussion is contained in Sanjeev Coke
Manufacturing Company vs Bharat Coking Coal Ltd. & Anr (1983) 1
SCR 1000 at pages 1023 to 1025, on the scope of the expression “material
resources of the community” and the expression “distribute” that are
used in Article 39(b). Finally, the Court held:
F
“We hold that the expression ‘Material resources of the community’
is not confined to natural resources; it is not confined to resources
owned by the public; it means and includes all resources, natural
and man-made, public and private-owned.” (at page 1026)
However, we were referred to three judgments in Property
Owners’ Association v. State of Maharashtra. In the first of these G
judgments reported in (1996) 4 SCC 49, this Court has referred the
matter to five learned Judges on the vexed question as to whether Article
31-C survived at all in view of the declaration contained in Minerva
Mills v. Union of India 1981 (1) SCR 206 to the effect that the amended
Article 31-C was constitutionally invalid. As the aforesaid declaration H
74 SUPREME COURT REPORTS [2019] 13 S.C.R.

A would not revive the original Article 31-C, the Article became a dead
letter. When the same case travelled to five learned Judges reported in
(2001) 4 SCC 455, this Court was of the opinion that the views expressed
in Sanjeev Coke (supra) require reconsideration in view of the fact
that Sanjeev Coke (supra) adopted the reasoning of Krishna Iyer, J. in
State of Karnataka vs Shri Ranganatha Reddy (1977) 4 SCC 471 and
B
not the reasoning of the majority judgment of Untwalai, J. who stated
that he must not be understood to agree with all that has been said by
Krishna Iyer, J. in his judgment. The Court, therefore, referred the matter
to seven learned Judges. When the matter came up before the seven
learned Judges, reported in (2013) 7 SCC 522, this Court held that the
C statement made in Sanjeev Coke (supra), 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 learned Judges of this Court, which
reference is still pending. We have not deemed it necessary to refer this
case to be tagged along with the reference to nine learned Judges, as
D
we will assume for the purpose of this 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.
14. Shri Divan next referred us to State of Tamil Nadu vs L. Abu
Kavur Bai (1984) 1 SCC 515, which held that the Tamil Nadu Stage
E Carriage and Contract Carriages (Acquisition) Act, 1973 was protected
by Article 31-C of the Constitution of India. This was held on the footing
that a nationalisation measure would fall within Article 39(b) as the word
“distribution” is a word of extremely wide import, which would include
nationalisation of transport as a distributive process for the good of the
F community. This situation is far removed from the Amendment Act to
the National Highways Act in the present case, which is not a
nationalisation measure at all, but is a measure to speed up the acquisition
process. Shri Divan then relied upon this Court’s judgment in Maharashtra
SEB vs Thana Electric Supply Co. (1989) 3 SCC 616, in which the
Indian Electricity (Maharashtra Amendment) Act, 1976 was engrafted
G on to the Electricity Act, 1910, the effect of which was to substitute
market value of the undertaking that was compulsorily acquired, with
the concept of an “amount”, which was the book value of the undertaking
at the time of its delivery. Even as per this Act, by virtue of the compulsory
acquisition of the undertaking, the licensee was given a solatium of 10%
H of such book value. Importantly, this Court, after holding that
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 75
[R. F. NARIMAN, J.]

nationalisation would come within the expression “distribution” for the A
purposes of Article 39(b), engrafted another test when legislation claims
the protection of Article 31-C. The Court held that the protection of
Article 31-C is accorded only to those provisions which are basically
and essentially necessary for giving effect to the objects of Article 39(b)
– See paragraph 43. This case is again distinguishable for the same
B
reason as pointed out qua State of Tamil Nadu v. L. Abu Kavur Bai
(supra) as this is a nationalisation measure far removed from the object
of the 1997 Amendment Act to the National Highways Act. It is interesting
to note that despite the fact that a challenge under Articles 14 and 31
were bound to fail in view of the protective umbrella of Article 31-C, yet
the Amendment Act had still provided for 10% solatium as the legislature C
had correctly appreciated that solatium is a part of compensation given
for the compulsory nature of acquisition of property.
15. Shri Divan then referred us to Tinsukhia Electric Supply Co.
Ltd. vs State of Assam (1989) 3 SCC 709, in which the Indian Electricity
(Assam Amendment) Act, 1973 and the Tinsukhia and Dibrugarh Electric D
Supply Undertakings (Acquisition) Act, 1973 were challenged. These
being nationalisation measures, this Court held that these enactments
were entitled to the protection of Article 31-C. This nationalisation statute,
again, is very far removed from the Amendment Act, 1997 to the National
Highways Act.
E
16. It is well-settled that in order that a law avail of the protection
of Article 31-C, it is not necessary that any declaration be made in that
behalf. (See State of Maharashtra vs Basantibai Mohanlal Khetan (1986)
2 SCC 516 at 530). 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). (See Assam F
Sillimanite Ltd. vs Union of India 1991 Supp 3 SCR 273 at 290)
17. An example of a law which claimed the benefit of Article 31-
C, but was denied such benefit is set out in Dr K. R. Lakshmanan vs
State of Tamil Nadu (1996) 2 SCC 226 as follows:
G
“44. The main object for which the Club was established is to
carry on the business of race-club, in particular the running of
horse-races, steeplechases or races of any other kind and for any
kind of athletic sports and for playing their own games of cricket,
bowls, golf, lawn tennis, polo or any other kind of games or
H
76 SUPREME COURT REPORTS [2019] 13 S.C.R.

A amusement, recreation, sport or entertainment etc. In the earlier
part of this judgment, we have noticed the working of the Club
which shows that apart from 5% commission from the totalizator
and the bookmakers no part of the betting-money comes to the
Club. The Club does not own or control any material resources of
the community which are to be distributed in terms of Article
B
39(b) of the Constitution of India. There are two aspects of the
functioning of the Club. One is the betting by the punters at the
totalizator and with the bookies. The Club does not earn any
income from the betting-money except 5% commission. There is
no question whatsoever of the Club owning or controlling the
C material resources of the community or in any manner contributing
towards the operation of the economic system resulting in the
concentration of wealth and means of production to the common
detriment. The second aspect is the conduct of horse-races by
the Club. Horse-racing is a game of skill, the horse which wins
the race is given a prize by the Club. It is a simple game of horse-
D
racing where the winning horses are given prizes. Neither the
“material resources of the community” nor “to subserve the
common good” has any relevance to the twin functioning of the
Club. Similarly, the operation of the Club has no relation or effect
on the “operation of the economic system”. There is no question
E whatsoever of attracting the Directive Principles contained in
Article 39(b) and (c) of the Constitution. The declaration in Section
2 of the Act and the recital containing aims and objectives totally
betray the scope and purpose of Article 39(b) and (c) of the
Constitution. While Article 39(b) refers to “material resources of
the community”, the aims and objects of the Act refer to “the
F
material resources of the Madras Race Club”. It is difficult to
understand what exactly are the material resources of the race-
club which are sought to be distributed so as to subserve the
common good within the meaning of the Directive Principles.
Equally, the reference to Article 39(c) is wholly misplaced. While
G Article 39(c) relates to “the operation of the economic system …
to the common detriment”, the aims and objectives of the Act
refer to “the economic system of the Madras Race Club”. What
is meant by the economic system of the Madras Race Club is not
known. Even if it is assumed that betting by the punters at the
totalizator and with the bookmakers is part of the economic system
H
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 77
[R. F. NARIMAN, J.]

of the Madras Race Club, it has no relevance to the objectives A
specified in Article 39(b) and (c). We are, therefore, of the view
that reference to Article 39(b) and (c) in the aims and objects and
in Section 2 of the Act is nothing but a mechanical reproduction of
constitutional provisions in a totally inappropriate context. There
is no nexus so far as the provisions of the 1986 Act are concerned
B
with the objectives contained in Article 39(b) and (c) of the
Constitution. We, therefore, hold that the protection under Article
31-C of the Constitution cannot be extended to the 1986 Act.”
This is despite the fact that the impugned enactment, namely, the
Madras Race Club (Acquisition and Transfer of Undertaking) Act, 1986
contained a declaration that it was enacted to give effect to the policy of C
the State under Article 39(b) and (c).
18. When we examine the Objects and Reasons which led to the
1997 amendment of the National Highways Act, we do not find mentioned
therein any object relating to distribution of the material resources of the
community. The object of the Amendment Act has no relationship D
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 E
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 F
Directive Principle contained in Article 39(b). Article 31-C is, therefore,
out ofharm’s way. Even otherwise, on the assumption that Article 31-C
is attracted to the facts of this case, yet, as was held by Bhagwati, J. in
Minerva Mills Ltd. v. Union of India 1981 (1) SCR 206,
“…it is not every provision of a statute, which has been enacted G
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” (at page 338-339) H
78 SUPREME COURT REPORTS [2019] 13 S.C.R.

A This passage was specifically referred to in Tinsukhia Electric
Supply Co. Ltd. vs State of Assam (1989) 3 SCC 709 at 735. Also, in
Maharashtra State Electricity Board vs Thana Electric Supply Co. (1989)
3 SCC 616, at para 43, this Court said:
“43. The idea of nationalisation of a material resource of the
B community cannot be divorced from the idea of distribution of
that resource in the community in a manner which advances
common good. The cognate and sequential question would be
whether the provisions of the Amending Act, 1976, had a
reasonable and direct nexus with the objects of Article 39(b). It is
C true, the protection of Article 31-C is accorded only to those
provisions which are basically and essentially necessary for giving
effect to the objects of Article 39(b). The High Court from the
trend of its reasoning in the judgment, appears to take the view
that while the provision for the takeover in the principal Act might
amount to a power to acquire, however, the objects of the
D Amending Act of 1976, which merely sought to beat down the
price could not be said to be part of that power and was, therefore,
incapable of establishing any nexus with Article 39(b). There is,
we say so with respect, a fallacy in this reasoning.”
The test of Article 31-C’s protection being accorded only to those
E provisions which are basically and essentially necessary for giving effect
to the objects of Article 39(b) is lifted from Akadasi Padhan vs State of
Orissa 1963 Supp. (2) SCR 691, where this Court held, with reference
to Article 19(6), that qua laws passed creating a State monopoly, it is
only those essential and basic provisions which are protected by the
F latter part of Article 19(6). This Court stated the test thus:
“17. In dealing with the question about the precise denotation of
the clause “a law relating to”, it is necessary to bear in mind that
this clause occurs in Article 19(6) which is, in a sense, an exception
to the main provision of Article 19(1)(g). Laws protected by Article
G 19(6) are regarded as valid even though they impinge upon the
fundamental right guaranteed under Article 19(1)(g). That is the
effect of the scheme contained in Article 19(1) read with Clauses
(2) to (6) of the said Article. That being so, it would be unreasonable
to place upon the relevant clause an unduly wide and liberal
construction. “A law relating to” a State monopoly cannot, in the
H
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 79
[R. F. NARIMAN, J.]

context, include all the provisions contained in the said law whether A
they have direct relation with the creation of the monopoly or not.
In our opinion, the said expression should be construed to mean
the law relating to the monopoly in its absolutely essential features.
If a law is passed creating a State monopoly, the Court should
enquire what are the provisions of the said law which are basically B
and essentially necessary for creating the State monopoly. It is
only those essential and basic provisions which are protected by
the latter part of Article 19(6). If there are other provisions made
by the Act which are subsidiary, incidental or helpful to the
operation of the monopoly, they do not fall under the said part and
their validity must be judged under the first part of Article 19(6). C
In other words, the effect of the amendment made in Article 19(6)
is to protect the law relating to the creation of monopoly and that
means that it is only the provisions of the law which are integrally
and essentially connected with the creation of the monopoly that
are protected. The rest of the provisions which may be incidental D
do not fall under the latter part of Article 19(6) and would inevitably
have to satisfy the test of the first part of Article 19(6).” (at page
707)
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 E
not served by removing 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
F
Amendment Act as we have seen 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 G
be inquired into by the Court.
Article 14 - Discrimination
19. The sheet anchor of the case of the Respondents is the
Constitution Bench judgment in P. Vajravelu Mudaliar vs Special Deputy
H
80 SUPREME COURT REPORTS [2019] 13 S.C.R.

A Collector for Land Acquisition (1965) 1 SCR 614 and Nagpur
Improvement Trust vs Vithal Rao (1973) 1 SCC 500. It is, therefore,
most important to advert to these two decisions in some detail.
20. In P. Vajravelu Mudaliar (supra), the Madras Legislature
amended the Land Acquisition Act providing for acquisition of land for
B housing schemes by laying down principles for fixing compensation
different from those prescribed in the principal Act. These differences
are set out in the judgment as follows:
“The next question is whether the amending Act was made in
contravention of Article 31(2) of the Constitution. The amending
C Act prescribes the principles for ascertaining the value of the
property acquired. It was passed to amend the Land Acquisition
Act, 1894, in the State of Madras for the purpose of enabling the
State to acquire lands for housing schemes. “Housing scheme” is
defined to mean “any State Government scheme the purpose of
which is increasing house accommodation” and under Section 3
D of the amending Act, Section 23 of the principal Act is made
applicable to such acquisition with certain modifications. In Section
23 of the principal Act, in sub-section (1) for clause first, the
following clause is substituted:
“first, the market value of the land at the date of the publication
E of the notification under Section 4, sub-section (1) or an amount
equal to the average market value of the land during the five
years immediately preceding such date, whichever is less.”
After clause sixthly, the following clause was added:

F “seventhly, the use to which the land was put at the date of the
publication of the notification under Section 4, sub-section (1).”
Sub-section (2) of Section 23 of the principal Act was amended
by substituting the words, in respect of solatium, “fifteen per
centum” by the words “five per centum”. In Section 24 of the
principal Act after the clause seventhly the following clause was
G
added:
“eighthly, any increase to the value of the land acquired by
reason of its suitability or adaptability for any use other than
the use to which the land was put at the date of the publication
of the notification under Section 4, sub-section (1).”
H
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 81
[R. F. NARIMAN, J.]

Under Section 4 of the amending Act, the provisions of Section 3 A
thereof shall apply to every case in which proceedings have been
started before the commencement of the said Act and are pending.
The result of the amending Act is that if the State Government
acquires a land for a housing purpose, the claimant gets only the
value of the land at the date of the publication of the notification
B
under Section 4(1) of the principal Act or an amount equal to the
average market value of the land during the five years immediately
preceding such date, whichever is less. He will get a solatium of
only 5 per centum of such value instead of 15 per centum under
the principal Act. He will not get any compensation by reason of
the suitability of the land for any use other than the use for which C
it was put on the date of publication of the notification.” (at page
629 & 630)
A challenge made to the said Amendment Act on the ground that
it is hit by Article 14 succeeded, the Court holding:
“Now what are the differences between persons owning lands in D
the Madras city or between the lands acquired which have a
reasonable relation to the said object. It is suggested that the
differences between people owning lands rested on the extent,
quality and the suitability of the lands acquired for the said object.
The differences based upon the said criteria have no relevance to E
the object of the Amending Act. To illustrate: the extent of the
land depends upon the magnitude of the scheme undertaken by
the State. A large extent of land may be acquired for a university
or for a network of hospitals under the provisions of the principal
Act and also for a housing scheme under the Amending Act. So
F
too, if the housing scheme is a limited one, the land acquired may
not be as big as that required for a big university. If waste land is
good for a housing scheme under the amending Act, it will equally
be suitable for a hospital or a school for which the said land may
be acquired under the principal Act. Nor the financial position or
the number of persons owning the land has any relevance, for in G
both the cases land can be acquired from rich or poor, from one
individual or from a number of persons. Out of adjacent lands of
the same quality and value, one may be acquired for a housing
scheme under the amending Act and the other for a hospital under
the principal Act; out of two adjacent plots belonging to the same H
82 SUPREME COURT REPORTS [2019] 13 S.C.R.

A individual and of the same quality and value, one may be acquired
under the principal Act and the other under the Amending Act.
From whatever aspect the matter is looked at, the alleged
differences have no reasonable relation to the object sought to be
achieved. It is said that the object of the amending Act in itself
B may project the differences in the lands sought to be acquired
under the two Acts. This argument puts the cart before the horse.
It is one thing to say that the existing differences between persons
and properties have a reasonable relation to the object sought to
be achieved and it is totally a different thing to say that the object
of the Act itself created the differences. Assuming that the said
C proposition is sound, we cannot discover any differences in the
people owning lands or in the lands on the basis of the object. The
object is to acquire lands for housing schemes at a low price. For
achieving that object, any land falling in any of the said categories
can be acquired under the amending Act. So too, for a public
D purpose any such land can be acquired under the principal Act.
We, therefore, hold that discrimination is writ large on the amending
Act and it cannot be sustained on the principle of reasonable
classification. We, therefore, hold that the amending Act clearly
infringes Article 14 of the Constitution and is void.” (at page 634
& 635)
E
(Emphasis supplied)
21. In Nagpur Improvement Trust (supra), this Court referred
to the Nagpur Improvement Trust Act, under which lands were to be
acquired with reference to the Land Acquisition Act, as modified. We
F are concerned in this case with the modification that has to do with
acquisition for the purposes of the Improvement Act, which did not provide
for solatium of 15% that would have been obtained under the Land
Acquisition Act. A Seven-Judge Bench of this Court examined the matter
in some detail, and followed P. Vajravelu Mudaliar (supra) together
with another judgment, Balammal vs State of Madras (1969) 1 SCR 90.
G
The Court held:
“27. What can be reasonable classification for the purpose of
determining compensation if the object of the legislation is to
compulsorily acquire land for public purposes?
H
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 83
[R. F. NARIMAN, J.]

28. It would not be disputed that different principles of A
compensation cannot be formulated for lands acquired on the basis
that the owner is old or 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 politician or an advocate. Why is this sort
of classification not sustainable? Because the object being to
B
compulsorily acquire for a public purpose, the object is equally
achieved whether the land belongs to one type of owner or another
type.
29. Can classification be made on the basis of the public purpose
for the purpose of compensation for which land is acquired? In
other words can the Legislature lay down different principles of C
compensation for lands acquired say for a hospital or a school or
a Government building? Can the Legislature say that for a hospital
land will be acquired at 50% of the market value, for a school at
60% of the value and for a Government building at 70% of the
market value? All three objects are public purposes and as far as D
the owner is concerned it does not matter to him whether it is one
public purpose or the other. Article 14 confers an individual right
and in order to justify a classification there should be something
which justifies a different treatment to this individual right. It seems
to us that ordinarily a classification based on the public purpose is
not permissible under Article 14 for the purpose of determining E
compensation. The position is different when the owner of the
land himself is the recipient of benefits from an improvement
scheme, and the benefit to him is taken into consideration in fixing
compensation. Can classification be made on the basis of the
authority acquiring the land? In other words can different principles F
of compensation be laid if the land is acquired for or by an
Improvement Trust or Municipal Corporation or the Government?
It seems to us that the answer is in the negative because as far as
the owner is concerned it does not matter to him whether the land
is acquired by one authority or the other.
G
30. It is equally immaterial whether it is one Acquisition Act or
another Acquisition Act under which the land is acquired. If the
existence of two Acts could enable the State to give one owner
different treatment from another equally situated the owner who
is discriminated against, can claim the protection of Article 14.”
H
84 SUPREME COURT REPORTS [2019] 13 S.C.R.

A 22. Both, P. Vajravelu Mudaliar (supra) and Nagpur
Improvement Trust (supra) clinch the issue in favour of the
Respondents, as has been correctly held by the Punjab and Haryana
High Court in M/s Golden Iron and Steel Forging (supra). First and
foremost, it is important to note that, as has been seen hereinabove, the
object of the 1997 Amendment was to speed up the process of acquiring
B
lands for National Highways. This object has been achieved in the manner
set out hereinabove. It will be noticed that the awarding of solatium and
interest has nothing to do with achieving 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
C 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.
D
23. Even otherwise, in P. Vajravelu Mudaliar (supra), despite
the fact that the object of the Amendment Act was to acquire lands for
housing schemes at a low price, yet the Amendment Act was struck
down when it provided for solatium at the rate of 5% instead of 15%,
that was provided in the Land Acquisition Act, the Court holding that
E whether adjacent lands of the same quality and value are acquired for a
housing scheme or some other public purpose such as a hospital is a
differentiation between two sets of landowners having no reasonable
relation to the object sought to be achieved. More pertinently, another
example is given – out of two adjacent plots belonging to the same
F individual one may be acquired under the principal Act for a particular
public purpose and one acquired under the Amending Act for a housing
scheme, which, when looked at from the point of view of the landowner,
would be discriminatory, having no rational relation to the object sought
to be achieved, which is compulsory acquisition of property for public
purposes.
G
24. Nagpur Improvement Trust (supra) has clearly held that
ordinarily a classification based on public purpose is not permissible under
Article 14 for the purpose of determining compensation. Also, in para
30, the Seven-Judge Bench unequivocally states that it is immaterial
whether it is one Acquisition Act or another Acquisition Act under which
H
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 85
[R. F. NARIMAN, J.]

the land is acquired, as, if the existence of these two Acts would enable A
the State to give one owner different treatment from another who is
similarly situated, Article 14 would be infracted. In the facts of these
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
B
fact alone.
25. A contention was taken by Shri Divan in that Article 31-A
second proviso would make it clear that compensation at a rate which
shall not be less than the market value would be payable only in the
circumstances mentioned therein and not otherwise. For this reason, the
Nagpur Improvement Trust case is distinguishable, as one of the C
instances given therein is that it would not be possible to discriminate
between landowners who are similarly situate by giving one landowner
compensation at let us say 60% of the market value and the other owner
100% of the market value.
26. The Nagpur Improvement Trust case has to be read as a D
whole. Merely emphasising one example from the passages that have
been extracted above (supra) will not make the ratio of the said judgment
inapplicable. Besides, 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 compensation at a rate which E
is not less than market value 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 F
and to such persons if they personally cultivate lands less than the ceiling
area under State Agricultural Ceiling Acts. We think that any reference
to the second proviso of Article 31-A is wholly irrelevant to the question
before us and cannot under any circumstance be used in order to
distinguish a judgment which otherwise applies on all fours. G
27. However, it was argued that a line of judgments have
distinguished P. Vajravelu Mudaliar (supra) and Nagpur
Improvement Trust (supra) and that this line of judgments should be
followed in preference to the aforesaid two judgments.
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86 SUPREME COURT REPORTS [2019] 13 S.C.R.

A 28. In Union of India vs Hari Krishnan Khosla 1993 Supp (2)
SCC 149, this Court upheld the Requisitioning and Acquisition of
Immovable Property Act, 1952 and stated that non-grant of solatium
and interest which were otherwise grantable under the Land Acquisition
Act would not render the 1952 Act constitutionally infirm. The Court
undertook a minute distinction between the Land Acquisition Act on the
B
one hand and the 1952 Act on the other. Thus, the Court stated:
“43. Coming to dissimilarities, in the case of requisition, one of the
important rights in the bundle of rights emanating from ownership,
namely, the right to possession and enjoyment has been deprived
of, when the property was requisitioned. It is minus that right for
C which, as stated above, the compensation is provided under Section
8(2), the remaining rights come to be acquired.
44. In contradistinction under the Land Acquisition Act, as stated
above, the sum total of the rights, namely, the ownership itself
comes to be acquired. We may usefully quote from Salmond on
D Jurisprudence (1966) 12th Edn., Chapter 8 at pages 246-247:
“Ownership denotes the relation between a person and
an object forming the subject-matter of his ownership. It
consists in a complex of rights, all of which are rights in rem,
being good against all the world and not merely against specific
E persons. Though in certain situations some of these rights may
be absent, the normal case of ownership can be expected to
exhibit the following incidents.
First, the owner will have a right to possess the thing which he
owns….
F
Secondly, the owner normally has the right to use and enjoy
the thing owned: the right to manage it, i.e., the right to decide
how it shall be used; and the right to the income from it ….
* * *
G Fifthly, ownership has a residuary character. If, for example, a
landowner gives a lease of his property to A, an easement to B
and some other right such as a profit to C, his ownership now
consists of the residual rights, i.e., the rights remaining when
all these lesser rights have been given away ….”
H
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 87
[R. F. NARIMAN, J.]

45. Then again, under the Act, the acquisition even though it is for A
a public purpose is restricted to the two clauses of Section 7(3) of
the Act to which we have already made a reference. Thus two
clauses of Section 7(3) constitute statutory embargo.
46. Under the Land Acquisition Act, the power of eminent domain
could be exercised without any embargo so long as there is an B
underlying public purpose. In our considered view, these vital
distinctions will have to be kept in mind while dealing with the
question of violation of Article 14 of the Constitution. We may, at
once, state, when examined in this light, the reasonings of the
High Court to make out a case of discrimination, seem to be
incorrect. C

xxx xxx xxx
58. We are of the firm view that cases of acquisition of land stand
on a different footing than those where such property is subject to
a prior requisition before acquisition. D
59. Therefore, the cases relating to acquisition like Vajravelu
Mudaliar case [(1965) 1 SCR 614 : AIR 1965 SC 1017], Balammal
case [(1969) 1 SCR 90 : AIR 1968 SC 1425], Nagpur Improvement
Trust case [(1973) 1 SCC 500] and Peter case [(1980) 3 SCC
554] are not helpful in deciding the point in issue here. Goverdhan E
v. Union of India (Civil Appeal No. 3058 of 1983, allowed by this
Court on January 31, 1983) no doubt was a case of acquisition
under the Defence of India Act, 1962 but it contains no discussion.
It has already been noticed that the award of solatium is not a
must in every case as laid down in Prakash Amichand Shah case
[(1986) 1 SCC 581]” F
29. Similarly, in Union of India vs Chajju Ram (2003) 5 SCC 568,
a case which arose under the Defence of India Act, 1971, this Court
followed Hari Krishnan Khosla (supra), finding that the provisions of
the Defence of India Act were in pari materia to those of the 1952
Act. The Court, therefore, held: G
“25. Here it is not a case where existence of the Acquisition Act
enables the State to give one owner different treatment from
another equally situated owner on which ground Article 14 was
sought to be invoked in First Nagpur Improvement Trust case
H
88 SUPREME COURT REPORTS [2019] 13 S.C.R.

A [(1973) 1 SCC 500]. The purposes for which the provisions of the
said Act can be invoked are absolutely different and distinct from
which the provision of the Land Acquisition Act can be invoked
for acquisition of land. In terms of the provisions of the said Act,
the requisition of the land was made. During the period of requisition
the owner of the land is to be compensated therefor. Section 30
B
of the said Act, as referred to hereinbefore, clearly postulates the
circumstances which would be attracted for acquisitioning of the
requisitioned land.
26. The purposes for which the requisitioning and consequent
acquisition of land under the said Act can be made, are limited.
C Such acquisitions, inter alia, can be made only when works have
been constructed during the period of requisition or where the
costs to any Government of restoring the property to its condition
at the time of its requisition would be excessive having regard to
the value of the property at the relevant time.
D 27. One of the principles for determination of the amount of
compensation for acquisition of land would be the willingness of
an informed buyer to offer the price therefor. In terms of the
provisions of the said Act acquisition of the property would be in
relation to the property which has been under requisition during
E which period the owner of the land would remain out of possession.
The Government during the period of requisition would be in
possession and full enjoyment of the property.
28. It is beyond any cavil that the price of the land which a willing
and informed buyer would offer would be different in the cases
F where the owner is in possession and enjoyment of the property
and in the cases where he is not. The formulation of the criteria
for payment of compensation in terms of Section 31 of the Act
was clearly made having regard to the said factor, which cannot
be said to be arbitrary or unreasonable. Parliament while making
the provisions for payment of compensation must have also taken
G into consideration the fact that the owner of the property would
have received compensation for remaining out of possession during
the period when the property was under acquisition.
29. The learned Attorney-General appears to be correct in his
submission that the provision for grant of solatium was inserted in
H
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 89
[R. F. NARIMAN, J.]

the Land Acquisition Act by Parliament having regard to the fact A
that the amount of compensation awarded to the owner of the
land is to be determined on the basis of the value thereof as on the
date of issuance of the notification under Section 4 of the Act. It
has been noticed that the process takes a long time. Taking into
consideration the deficiencies in the Act, the Land Acquisition
B
Act was further amended in the year 1984. In terms of sub-section
(2) of Section 23 of the Land Acquisition Act, therefore, solatium
is paid in addition to the amount of market value of the land.
30. We are, therefore, of the opinion that the classification sought
to be made for determination of the amount of compensation for
acquisition of the land under the said Act vis-à-vis the Land C
Acquisition Act is a reasonable and valid one. The said classification
is founded on intelligible differentia and has a rational relation
with the object sought to be achieved by the legislation in question.”
30. We may hasten to add that a Division Bench of this Court in
H. V. Low and Company Private Ltd. vs. State of West Bengal (2016) D
12 SCC 699 has found on a prima facie examination that the case of
Chajju Ram (supra) requires reconsideration.
31. For our purposes, it is enough to state that the line of judgments
under the 1952 Act and the Defence of India Act, 1971, which contained
a two-step process, namely, requisition which may be followed by E
acquisition, are wholly distinguishable for the reasons stated in those
judgments. As was stated in Chajju Ram (supra), the object of a
Requisition Act is completely different from an Acquisition Act. In a
Requisition Act, private property is taken for public purposes only
temporarily – when the reason for requisition ends, ordinarily the property F
is handed back to the owner. This being the case, in requisition statutes
handing back of the property is the rule and acquisition of the property
the exception, as property can only be acquired for the two reasons set
out in Section 7 of the 1952 Act and Section 30 of the Defence of India
Act, 1971. Also, as has been pointed out in Hari Krishnan Khosla
(supra), what gets acquired is only rights as to ownership, possession G
having been taken over by requisition. In addition, the owner has already
received compensation for remaining out of possession during the period
when the property is under requisition. For all these reasons, the aforesaid
judgments are wholly distinguishable from the acquisition measure in
this case. H
90 SUPREME COURT REPORTS [2019] 13 S.C.R.

A 32. The next judgment relied upon by the learned counsel on behalf
of the Appellants is Prakash Amichand Shah vs State of Gujarat (1986)
1 SCC 581. This judgment contained a challenge to the Bombay Town
Planning Act. The Nagpur Improvement Trust (supra) judgment was
distinguished in this judgment by stating that the scheme of the Bombay
Town Planning Act is wholly different from the scheme of the Land
B
Acquisition Act. In particular, the Court held:
“34. … Under Section 53 of the Act all rights of the private owners
in the original plots would determine and certain consequential
rights in favour of the owners would arise therefrom. If in the
scheme, reconstituted or final plots are allotted to them they
C become owners of such final plots subject to the rights settled by
the Town Planning Officer in the final scheme. In some cases the
original plot of an owner might completely be allotted to the local
authority for a public purpose. Such private owner may be paid
compensation or a reconstituted plot in some other place. It may
D be a smaller or a bigger plot. It may be that in some cases it may
not be possible to allot a final plot at all. Sections 67 to 71 of the
Act provide for certain financial adjustments regarding payment
of money to the local authority or to the owners of the original
plots. The development and planning carried out under the Act is
primarily for the benefit of public. The local authority is under an
E obligation to function according to the Act. The local authority
has to bear a part of the expenses of development. It is in one
sense a package deal. The proceedings relating to the scheme
are not like acquisition proceedings under the Land Acquisition
Act, 1894. Nor are the provisions of the Land Acquisition Act,
F 1894 made applicable either without or with modifications as in
the case of the Nagpur Improvement Trust Act, 1936. We do not
understand the decision in Nagpur Improvement Trust case [(1973)
1 SCC 500 : AIR 1973 SC 689 : (1973) 3 SCR 39] as laying down
generally that wherever land is taken away by the government
under a separate statute compensation should be paid under the
G Land Acquisition Act, 1894 only and if there is any difference
between the compensation payable under the Land Acquisition
Act, 1894 and the compensation payable under the statute
concerned the acquisition under the statute would be discriminatory.
That case is distinguishable from the present case. In State of
H Kerala v. T.M. Peter [(1980) 3 SCC 554 : AIR 1980 SC 1438 :
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 91
[R. F. NARIMAN, J.]

(1980) 3 SCR 290] also Section 34 of the Cochin Town Planning A
Act which came up for consideration was of the same pattern as
the provision in the Nagpur Improvement Trust Act, 1936 and for
that reason the court followed the decision in the Nagpur
Improvement Trust case [(1973) 1 SCC 500 : AIR 1973 SC 689 :
(1973) 3 SCR 39] . But in that decision itself the court observed
B
at pp. 302 and 303 thus: (SCC p. 564, para 21)
“We are not to be understood to mean that the rate of
compensation may not vary or must be uniform in all cases.
We need not investigate this question further as it does not
arise here although we are clear in our mind that under given
circumstances differentiation even in the scale of compensation C
may comfortably comport with Article 14. No such
circumstances are present here nor pressed.”
33. This judgment is again distinguishable in that it was found,
having regard to the Bombay Town Planning Act, that the person from
whom the land was expropriated gets a package deal in that he may be D
allotted other lands in the final Town Planning Scheme, apart from
compensation that is payable. However, it is worthy of comment that
State of Kerala vs T. M. Peter (1980) 3 SCC 554, which was relied
upon in this case, expressly followed Nagpur Improvement Trust
(supra), holding: E
“20. Is it rational to pay different scales of compensation, as pointed
out by Sikri, C.J., in Nagpur Improvement Trust case [Nagpur
Improvement Trust v. Vithal Rao, (1973) 1 SCC 500 : AIR 1973
SC 689 : (1973) 3 SCR 39], depending on whether you acquire
for housing or hospital, irrigation scheme or town improvement, F
school building or police station? The amount of compensation
payable has no bearing on this distinction, although it is conceivable
that classification for purposes of compensation may exist and in
such cases the statute may be good. We are unable to discern
any valid discrimen in the Town Planning Act vis-a-vis the Land
Acquisition Act warranting a classification in the matter of denial G
of solatium.
21. We uphold the Act in other respects but not when it deals
invidiously between two owners based on an irrelevant criterion
viz. the acquisition being for an improvement scheme. We are not
H
92 SUPREME COURT REPORTS [2019] 13 S.C.R.

A to be understood to mean that the rate of compensation may not
vary or must be uniform in all cases. We need not investigate this
question further as it does not arise here although we are clear in
our minds that under given circumstances differentiation even in
the scale of compensation may comfortably comport with Article
B 14. No such circumstances are present here nor pressed. Indeed,
the State, realising the force of this facet of discrimination, offered,
expiratory fashion, both before the High Court and before us, to
pay 15%, solatium to obliterate the hostile distinction.
22. The core question now arises. What is the effect even if we
C read a discrimination design in Section 34? Is plastic surgery
permissible or demolition of the section inevitable? Assuming that
there is an untenable discrimination in the matter of compensation
does the whole of Section 34 have to be liquidated or several
portions voided? In our opinion, scuttling the section, the course
the High Court has chosen, should be the last step. The court
D uses its writ power with a constructive design, an affirmative slant
and a sustaining bent. Even when by compulsions of inseverability,
a destructive stroke becomes necessary the court minimises the
injury by an intelligent containment. Law keeps alive and
“operation pull down” is de mode. Viewed from this perspective,
E so far as we are able to see, the only discriminatory factor as
between Section 34 of the Act and Section 25 of the Land
Acquisition Act vis-à-vis quantification of compensation is the
nonpayment of solatium in the former case because of the provision
in Section 34(1) that Section 25 of the Land Acquisition Act shall
have no application. Thus, to achieve the virtue of equality and to
F
eliminate the vice of inequality what is needed is the obliteration
of Section 25 of the Land Acquisition Act from Section 34(1) of
the Town Planning Act. The whole of Section 34(1) does not
have to be struck down. Once we exclude the discriminatory and,
therefore, void part in Section 34(1) of the Act, equality is restored.
G The owner will then be entitled to the same compensation, including
solatium, that he may be eligible for under the Land Acquisition
Act. What is rendered void by Article 13 is only “to the extent of
the contravention” of Article 14. The lancet of the court may
remove the offending words and restore to constitutional health
H the rest of the provision.
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 93
[R. F. NARIMAN, J.]

23. We hold that the exclusion of Section 25 of the Land Acquisition A
Act from Section 34 of the Act is unconstitutional but it is severable
and we sever it. The necessary consequence is that Section 34(1)
will be read omitting the words “and Section 25”. What follows
then? Section 32 obligates the State to act under the Land
Acquisition Act but we have struck down that part which excludes B
Section 25, of the Land Acquisition Act and so, the “modification”
no longer covers Section 25. It continues to apply to the acquisition
of property under the Town Planning Act. Section 34(2) provides
for compensation exactly like Section 25(1) of the Land Acquisition
Act and in the light of what we have just decided Section 25(2)
will also apply and “in addition to the market value of the land as C
above provided, the court shall in every case award a sum of
fifteen per centum on such market value in consideration of the
compulsory nature of the acquisition”.
34. One more judgment needs to be referred to, namely, Girnar
Traders (3) vs State of Maharashtra (2011) 3 SCC 1, which was relied D
upon by Shri Divan to argue that, like Chapter VII of the Maharashtra
Regional and Town Planning Act, the amendment to the National
Highways Act is a complete self-contained code and must, therefore, be
followed on its own terms. This judgment dealt with whether Section
11-A introduced by the 1984 amendment to the Land Acquisition Act E
could be said to apply to acquisitions made under the Maharashtra Regional
Town Planning Act. The answer to this question was that Section 11-A
could not be so applied as the Maharashtra Regional Town Planning Act
referred to the Land Acquisition Act as legislation by way of incorporation
and not legislation by way of reference. In the present case, the Land
F
Acquisition Act, by virtue of Section 3J of the National Highways Act,
does not apply at all. The controversy in the present case does not, in
any manner, involve whether the Land Acquisition Act applies by way
of incorporation or reference. This case is also, therefore, wholly
distinguishable. Further, the ‘self-contained code’ argument based on
this judgment cannot be used as a discriminatory tool to deny benefits G
available to landowners merely because land has to be acquired under a
different Act, as has been held in Nagpur Improvement Trust (supra).
35. Shri Mukul Rohatgi, learned Senior Advocate appearing on
behalf of the Union of India and NHAI, has stated that under Section
H
94 SUPREME COURT REPORTS [2019] 13 S.C.R.

A 3G(2) of the National Highways Act, where the right of user or any right
in the nature of an easement on land is acquired under the Act, there
shall be paid to the owner and any other person whose right is so affected,
an amount calculated at 10% of the amount that is determined as payable
by the order of the competent authority. According to the learned Senior
Advocate, this amount is not payable under the Land Acquisition Act,
B 1894, and that this being the case, it is clear that what is given by way of
compensation under the National Highways Act being more than what
is given under the Land Acquisition Act in certain respects, the Scheme
of the Acts, therefore, being different, the non-giving of solatium and
interest under the National Highways Act is justified. Even otherwise,
C persons should not be given compensation under Section 3G(2) as a
matter of course, but would have to submit proof that a right of easement
or a right of user has been acquired for which compensation ought to be
paid. Shri Amit Sibal, learned Senior Advocate, on the other hand, has
argued, referring to Sections 3(b), 9 and 31(1) of the Land Acquisition
Act that easementary rights are compensated even under the Land
D Acquisition Act and in point of fact the sum of 10% payable under Section
3G(2) of the National Highways Act is really in the nature of a cap
beyond which no further compensation can be granted. Even otherwise,
according to the learned Senior Advocate, granting of compensation under
Section 3G(2) would have no bearing on interest and solatium that is
payable under the Land Acquisition Act and not under the National
E Highways Act.
36. Section 3G(2) makes it clear that rights of user and rights in
the nature of easement being valuable property rights, compensation
must be payable therefor. It is obvious that there is no double payment to
the owner on this score as the owner and/or any other person has to
F prove that a right in the nature of an easement has also been taken
away. Obviously, the right of user being subsumed in acquisition of
ownership, the owner cannot get a double benefit on this score. The
right of user is, therefore, referable only to persons other than the owner,
who may have tenancy rights, and other rights of license on land which
G is acquired under the National Highways Act.
37. Insofar as easementary rights under the Land Acquisition Act
are concerned, three Sections are relevant and need to be quoted:
“3. Definitions.— In this Act, unless there is something repugnant
in the subject or context,—
H xxx xxx
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 95
[R. F. NARIMAN, J.]

(b) the expression “person interested” includes all persons A
claiming an interest in compensation to be made on account of
the acquisition of land under this Act; and a person shall be deemed
to be interested in land if he is interested in an easement affecting
the land;
xxx xxx B

9. Notice to persons interested.— (1) The Collector shall then
cause public notice to be given at convenient places on or near
the land to be taken, stating that the Government intends to take
possession of the land, and that claims to compensation for all
interests in such land may be made to him. C

(2) Such notice shall state the particulars of the land so needed,
and shall require all persons interested in the land to appear
personally or by agent before the Collector at a time and place
therein mentioned (such time not being earlier than fifteen days
D
after the date of publication of the notice), and to state the nature
of their respective interests in the land and the amount and
particulars of their claims to compensation for such interests, and
their objections (if any) to the measurements made under section
8. The Collector may in any case require such statement to be
made in writing and signed by the party or his agent. E
(3) The Collector shall also serve notice to the same effect on the
occupier (if any) of such land and on all such persons known or
believed to be interested therein, or to be entitled to act for persons
so interested, as reside or have agents authorised to receive service
on their behalf, within the revenue district in which the land is F
situate.
(4) In case any person so interested resides elsewhere, and has
no such agent the notice shall be sent to him by post in a letter
addressed to him at his last known residence, address or place of
business and registered under sections 28 and 29 of the Indian G
Post Office Act, 1898 (6 of 1898).
xxx xxx
31. Payment of compensation or deposit of same in Court.— (1)
On making an award under section 11, the Collector shall tender H
96 SUPREME COURT REPORTS [2019] 13 S.C.R.

A payment of the compensation awarded by him to the persons
interested entitled thereto according to the award, and shall pay it
to them unless prevented by some one or more of the
contingencies mentioned in the next sub-section.
xxx xxx”
B
A reading of these Sections shows 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
C 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,
D 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, which has been dealt with in
extenso in this judgment.
E 38. It is worthy of note that even in acquisitions that take place
under the National Highways Act and the 1952 Act, 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 1 st
January, 2015, an Amendment Ordinance No.9 of 2014 was promulgated
F amending the 2013 Act. Section 10 of the said amendment Ordinance
states as follows:
“10. In the principal Act, in section 105,-
(i) for sub-section (3), the following sub-section shall be substituted,
namely:-
G
“(3) The provisions of this Act relating to the determination of
compensation in accordance with the First Schedule,
rehabilitation and resettlement in accordance with the Second
Schedule and infrastructure amenities in accordance with the
Third Schedule shall apply to the enactments relating to land
H
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 97
[R. F. NARIMAN, J.]

acquisition specified in the Fourth Schedule with effect from A
1st January, 2015.”;
(ii) sub-section (4) shall be omitted.”
It is only when this Ordinance lapsed that the notification dated
28th August, 2015 was then made under Section 113 of the 2013 Act.
B
This notification is important and states as follows:
“MINISTRY OF RURAL DEVELOPMENT
ORDER
New Delhi, the 28th August, 2015
C
S.O. 2368(E).— Whereas, the Right to Fair Compensation and
Transparency in Land Acquisition, Rehabilitation and Resettlement
Act, 2013 (30 of 2013) (hereinafter referred to as the RFCTLARR
Act) came into effect from 1st January, 2014;
And whereas, sub-section (3) of Section 105 of the RFCLTARR
D
Act provided for issuing of notification to make the provisions of
the Act relating to the determination of the compensation,
rehabilitation and resettlement applicable to cases of land
acquisition under the enactments specified in the Fourth Schedule
to the RFCTLARR Act;
And whereas, the notification envisaged under sub-section (3) E
of Section 105 of RFCTLARR Act was not issued, and the
RFCTLARR (Amendment) Ordinance, 2014 (9 of 2014) was
promulgated on 31st December, 2014, thereby, inter-alia, amending
Section 105 of the RFCTLARR Act to extend the provisions of
the Act relating to the determination of the compensation and F
rehabilitation and resettlement to cases of land acquisition under
the enactments specified in the Fourth Schedule to the
RFCTLARR Act;
And whereas, the RFCTLARR (Amendment) Ordinance, 2015
(4 of 2015) was promulgated on 3rd April, 2015 to give continuity
to the provisions of the RFCTLARR (Amendment) Ordinance, G
2014;
And whereas, the RFCTLARR (Amendment) Second
Ordinance, 2015 (5 of 2015) was promulgated on 30th May, 2015
to give continuity to the provisions of the RFCTLARR
(Amendment) Ordinance, 2015 (4 of 2015); H
98 SUPREME COURT REPORTS [2019] 13 S.C.R.

A And whereas, the replacement Bill relating to the RFCTLARR
(Amendment) Ordinance, 2015 (4 of 2015) was referred to the
Joint Committee of the Houses for examination and report and
the same is pending with the Joint Committee;
As whereas, as per the provisions of article 123 of the
B Constitution, the RFCTLARR (Amendment) Second Ordinance,
2015 (5 of 2015) shall lapse on the 31st day of August, 2015 and
thereby placing the land owners at the disadvantageous position,
resulting in denial of benefits of enhanced compensation and
rehabilitation and resettlement to the cases of land acquisition under
the 13 Acts specified in the Fourth Schedule to the RFCTLARR
C Act as extended to the land owners under the said Ordinance;
And whereas, the Central Government considers it necessary
to extend the benefits available to the land owners under the
RFCTLARR Act to similarly placed land owners whose lands
are acquired under the 13 enactments specified in the Fourth
D Schedule; and accordingly the Central Government keeping in view
the aforesaid difficulties has decided to extend the beneficial
advantage to the land owners and uniformly apply the beneficial
provisions of the RFCTLARR Act, relating to the determination
of compensation and rehabilitation and resettlement as were made
applicable to cases of land acquisition under the said enactments
E in the interest of the land owners;
Now, therefore, in exercise of the powers conferred by sub-
section (1) of Section 113 of the Right to Fair Compensation and
Transparency in Land Acquisition, Rehabilitation and Resettlement
Act, 2013 (30 of 2013), the Central Government hereby makes
F the following Order to remove the aforesaid difficulties, namely;-
1. (1) This Order may be called the Right to Fair Compensation
and Transparency in Land Acquisition, Rehabilitation and
Resettlement (Removal of Difficulties) Order, 2015.
(2) It shall come into force with effect from the 1st day of
G September, 2015.
2. The provisions of the Right to Fair Compensation and
Transparency in Land Acquisition, Rehabilitation and Resettlement
Act, 2013, relating to the determination of compensation in
accordance with the First Schedule, rehabilitation and resettlement
H
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 99
[R. F. NARIMAN, J.]

in accordance with the Second Schedule and infrastructure A
amenities in accordance with the Third Schedule shall apply to all
cases of land acquisition under the enactments specified in the
Fourth Schedule to the said Act.
[F.No. 13011/01/2014-LRD]
B
K. P. KRISHNAN, Addl. Secy.”
It is thus clear that the Ordinance as well as the notification have
applied the principle contained in Nagpur Improvement Trust (supra),
as the Central Government has considered it necessary to extend the
benefits available to landowners generally under the 2013 Act to similarly
C
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 (supra) would apply to acquisitions which take
place under the National Highways Act, and that solatium and interest D
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
E
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. The judgments
delivered under the 1952 Act as well as the Defence of India Act, 1971,
may, therefore, require a re-look in the light of this development. 1 In any
case, as has been pointed out hereinabove, the case of Chajju Ram F
(supra), has been referred to a larger Bench. In this view of the matter,
we are of the view that the view of the Punjab and Haryana High Court
is correct, whereas the view of the Rajasthan High Court is not correct.
39. We were also referred to the judgment of a learned Single
Judge of the Karnataka High Court reported as Lalita vs Union of India G
AIR 2003 Karnataka 165, as well as a judgment of the Division Bench
1
The Defence of India Act, 1971, was a temporary statute which remained in force
only during the period of operation of a proclamation of emergency and for a period of
six months thereafter – vide Section 1(3) of the Act. As this Act has since expired, it is
not included in the Fourth Schedule of the 2013 Act. H
100 SUPREME COURT REPORTS [2019] 13 S.C.R.

A of the Madras High Court in T. Chakrapani vs Union of India, both of
which distinguished the Requisition Act cases and relied upon Nagpur
Improvement Trust (supra) in order to reach the same conclusion as
the Punjab and Haryana High Court. Both these judgments are also
correct.
B 40. One more argument was raised by learned counsel appearing
on behalf of the Respondents, which is that nothing survives in these
mattes in view of orders passed by this Court in Union of India v. T.
Chakrapani – the Division Bench judgment of the Madras High Court
having come before this Court. This order is quoted by us in full :
C “In view of the statement made by Shri Ranjit Kumar, learned
Solicitor General of India on an earlier date of the hearing that
solatium in terms of the impugned order of the High Court would
be granted for the instant acquisitions made under the provisions
of the National Highways Act, 1956, no subsisting issue remains
in the present appeals as also in the special leave petition. The
D appeals as also the special leave petition are accordingly closed.
The respondents – writ petitioners be paid solatium as due in terms
of the impugned order(s) along with interest thereon.”
We were also referred to an order in Sunita Mehra v. Union of
India (2016) SCC OnLine 1128, in which this Court held :
E
“6. The only point agitated before us by the learned Solicitor
General is that in paragraph 23 of the impugned judgment of the
High Court, it has been held that land-owners would “henceforth”
be entitled to solatium and interest as envisaged by the provisions
of Sections 23 and 28 of the Land Acquisition Act, 1894. In the
F ultimate paragraph of the impugned judgment it has, however,
been mentioned that in respect of all acquisitions made under the
National Highways Act, 1956, solatium and interest in terms similar
to those contained in Sections 23(2) and 28 of the Land Acquisition
Act, 1894 will have to be paid.
G 7. Learned Solicitor General has pointed out that there is an
apparent inconsistency in the judgment, which needs to be clarified.
It has also been submitted by the learned Solicitor General that
the order of the High Court should be clarified to mean that the
issue of grant of interest and solatium should not be allowed to be
reopened without any restriction or reference to time. Learned
H
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 101
[R. F. NARIMAN, J.]

Solicitor General has particularly submitted that to understand the A
order of the High Court in any other manner would not only seriously
burden the public exchequer but would also amount to overlooking
the delay that may have occurred on the part of the land-owner(s)
in approaching the Court and may open floodgates for en masse
litigation on the issue.
B
8. We have considered the submissions advanced. In Gurpreet
Singh v. Union of India, (2006) 8 SCC 457, this Court, though in a
different context, had restricted the operation of the judgment of
this Court in Sunder v. Union of India, (2001) 7 SCC 211 and had
granted the benefit of interest on solatium only in respect of pending
proceedings. We are of the view that a similar course should be C
adopted in the present case also. Accordingly, it is directed that
the award of solatium and interest on solatium should be made
effective only to proceedings pending on the date of the High
Court order in Golden Iron & Steel Forgins v. Union of India i.e.
28.03.2008. Concluded cases should not be opened. As for future D
proceedings, the position would be covered by the provisions of
the Right to Fair Compensation and Transparency in Land
Acquisition, Rehabilitation and Resettlement Act, 2013 (came into
force on 01.01.2014), which Act has been made applicable to
acquisitions under the National Highways Act, 1956 by virtue of
notification/order issued under the provisions of the Act of 2013.” E

41. There is no doubt that the learned Solicitor General, in the
aforesaid two orders, has conceded the issue raised in these cases. This
assumes importance in view of the plea of Shri Divan that the impugned
judgments should be set aside on the ground that when the arbitral awards
F
did not provide for solatium or interest, no Section 34 petition having
been filed by the landowners on this score, the Division Bench judgments
that are impugned before us ought not to have allowed solatium and/or
interest. Ordinarily, we would have acceded to this plea, 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 G
the interest of justice we decline to interfere with such orders, given our
discretionary jurisdiction under Article 136 of the Constitution of India.
We therefore declare 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
H
102 SUPREME COURT REPORTS [2019] 13 S.C.R.

A 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. Accordingly, Appeal
@ SLP (C) No. 9599/2019 is dismissed.
42. Coming to the individual appeals in the case, Shri Mukul Rohatgi
B has raised essentially 11 grounds, which, according to him, require the
Court’s attention. We will deal with each of these grounds seriatim
hereinbelow:
Ground 1: That the acquired land was treated as commercial
land, ignoring Section 143 of The Punjab Regional and Town
C Planning and Development Act, 1995, due to which construction
is restricted upto 50m on either side of the National Highway.
SLP (C) No. 15478/2019; SLP (C) No. 15482/2019; SLP
(C) No. 15472/2019; SLP (C) No. 15470/2019; SLP (C) No.
15442-15443/2019; SLP (C) No. 15488/2019; SLP (C) No.
D 15444-15445/2019; SLP (C) No. 15487/2019; SLP (C)
No.15479/2019; SLP (C) No. 15477/2019; SLP (C) No.
15485/2019; SLP (C) No. 15474/2019; SLP (C) No. 15466/
2019; SLP (C) No. 15446/2019; SLP (C) No. 15447/2019;
SLP (C) No. 15448/2019; SLP (C) No. 21690/2019; SLP
E (C) No. 14491/2019; SLP (C) No. 21662/2019; SLP (C) No.
21696/2019; SLP (C) No. 21657/2019; SLP (C) No. 21664/
2019; SLP (C) No. 21666/2019; SLP (C) No. 21671/2019;
SLP (C) No. 21670/2019; SLP (C) No. 21673/2019; SLP
(C) No. 21663/2019; SLP (C) No. 21695/2019; SLP (C) No.
21692/2019; SLP (C) No. 21693/2019; SLP (C) No. 9602/
F 2019; SLP (C) No. 9600/2019; SLP (C) No. 21687/2019;
SLP (C) No. 21689/2019; SLP (C) No. 9604/2019; SLP (C)
No. 10210/2019
In these matters, this ground has been raised and argued sometimes
at the Section 34 stage, sometimes at the Section 37 stage, and
G
sometimes at both stages. The burden to prove that the land in
question is within 50m of the National Highway, and that it does
not have commercial potentiality, is on the NHAI but, on facts,
has never been discharged. This being the case in all these appeals,
they stand dismissed.
H
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 103
[R. F. NARIMAN, J.]

SLP (C) No. 21688/2019; SLP (C) No. 15471/2019; SLP A
(C) No. 15450/2019; SLP (C) No. 21675/2019; SLP (C) No.
21683/2019
In these matters, this ground has not been taken or argued in the
Section 34 petition. Therefore, these appeals stand dismissed.
B
Ground 2: That the arbitrator conducted the spot visit five years
after the Section 3A notification was issued, based on which
compensation was determined.
SLP (C) No. 15478/2019; SLP (C) No. 15482/2019; SLP
(C) No. 15472/2019; SLP (C) No. 15470/2019; SLP (C) No. C
15442-15443/2019; SLP (C) No. 15488/2019; SLP (C) No.
15444-15445/2019; SLP (C) No. 15487/2019; SLP (C) No.
15479/2019; SLP (C) No. 15477/2019; SLP (C) No. 15485/
2019; SLP (C) No. 15474/2019; SLP (C) No. 15466/2019;
SLP (C) No. 15446/2019; SLP (C) No. 15447/2019; SLP
(C) No. 21688/2019; SLP (C) No. 15471/2019; SLP (C) No. D
15448/2019; SLP (C) No. 15450/2019; SLP (C) No. 21690/
2019; SLP (C) No. 15486/2019; SLP (C) No. 14491/2019;
SLP (C) No. 21662/2019; SLP (C) No. 21696/2019; SLP
(C) No. 21657/2019; SLP (C) No. 21664/2019; SLP (C) No.
21666/2019; SLP (C) No. 21671/2019; SLP (C) No. 21682/
E
2019; SLP (C) No. 21675/2019; SLP (C) No. 21670/2019;
SLP (C) No. 21673/2019; SLP (C) No. 21663/2019; SLP
(C) No. 21695/2019; SLP (C) No. 21691/2019; SLP (C) No.
21692/2019; SLP (C) No. 21693/2019; SLP (C) No. 10210/
2019
F
In these matters, this ground has not been taken and argued in the
Section 34 petitions filed in these cases. Further, assessment, in
any case, of the land in question, relates to the date of the original
notification. Therefore, these appeals stand dismissed.
Ground 3:That exemplars of faraway villages in other districts G
were relied upon to enhance compensation.
SLP (C) No. 15478/2019; SLP (C) No. 15482/2019; SLP
(C) No. 15472/2019; SLP (C) No. 15470/2019; SLP (C) No.
15442-15443/2019; SLP (C) No. 15488/2019; SLP (C) No.
H
104 SUPREME COURT REPORTS [2019] 13 S.C.R.

A 15444-15445/2019; SLP (C) No. 15487/2019; SLP (C) No.
15479/2019; SLP (C) No. 15477/2019; SLP (C) No. 15485/
2019; SLP (C) No.15474/2019; SLP (C) No. 15446/2019;
SLP (C) No. 15447/2019; SLP (C) No. 21688/2019; SLP
(C) No.15471/2019; SLP (C) No. 15448/2019; SLP (C) No.
15450/2019; SLP (C) No. 21690/2019; SLP (C) No. 15486/
B
2019; SLP (C) No. 14491/2019; SLP (C) No. 21662/2019;
SLP (C) No. 21696/2019; SLP (C) No. 21657/2019; SLP
(C) No. 21664/2019; SLP (C) No. 21666/2019; SLP (C) No.
21671/2019; SLP (C) No. 21682/2019; SLP (C) No. 21675/
2019; SLP (C) No. 21670/2019; SLP (C) No. 21673/2019;
C SLP (C) No. 21663/2019; SLP (C) No. 21695/2019; SLP
(C) No. 21691/2019; SLP (C) No. 21692/2019; SLP (C) No.
21693/2019; SLP (C) No. 9602/2019; SLP (C) No. 9600/
2019; SLP (C) No. 21687/2019; SLP (C) No. 21683/2019;
SLP (C) No. 21689/2019; SLP (C) No. 9604/2019; SLP (C)
No. 10210/2019
D
In these matters, this ground has not been taken and argued in
any of the Section 34 petitions. Therefore, these appeals stand
dismissed.
Ground 4: That the Arbitrator relied upon the Collector Rate of
E the year 2011-13/ 2012-13.
SLP (C) No. 15478/2019; SLP (C) No. 15472/2019; SLP
(C) No. 15470/2019; SLP (C) No. 15488/2019; SLP (C) No.
15444-15445/2019; SLP (C) No. 15487/2019; SLP (C) No.
15479/2019; SLP (C) No. 15477/2019; SLP (C) No. 15474/
F 2019; SLP (C) No. 15466/2019; SLP (C) No. 15446/2019;
SLP (C) No. 15447/2019; SLP (C) No. 15450/2019; SLP
(C) No. 21688/2019; SLP (C) No. 15486/2019; SLP (C) No.
21696/2019; SLP (C) No. 21664/2019; SLP (C) No. 21671/
2019; SLP (C) No. 21682/2019; SLP (C) No. 21675/2019;
SLP (C) No. 21670/2019; SLP (C) No. 21695/2019; SLP
G (C) No. 21693/2019; SLP (C) No. 9604/2019; SLP (C) No.
15485/2019;
In these matters, this ground has not been taken and argued in
any of the Section 34 petitions. Therefore, these appeals stand
dismissed.
H
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 105
[R. F. NARIMAN, J.]

SLP (C) No. 15471/2019 A
In this matter, this ground has been taken up in the Section 34
petition, however, the High Court has rightly dismissed this appeal
in terms of the Punjab & Haryana High Court order dated
15.02.17, in FAO No. 6522 of 2016, titled ‘Mangal Dass vs. Govt.
of India’, wherein compensation of Rs. 7,00,000 per marla, which B
was calculated based on the collector rate of 2011, was held to be
not justified, and was reduced to Rs. 4,50,000 per marla. Therefore,
this appeal also stands dismissed.
Ground 5: That compensation on account of loss of structure
was awarded. C
SLP (C) No. 15470/2019; SLP (C) No. 15444-15445/2019;
SLP (C) No. 15485/2019;
In these matters, this ground has not been taken and argued in
any of the Section 34 petitions. Therefore, these appeals stand
dismissed. D
SLP (C) No. 15472/2019
In this matter, this ground has not been taken in the Section 37
appeal. Therefore, this appeal also stands dismissed.
SLP (C) No. 15478/2019 E
In this matter, this ground has been taken up in the Section 34
petition, and the High Court, noting that the landowner gave up
his claim on loss of structure awarded at the rate of Rs. 50,000 by
the Arbitrator, held that no further adjudication is necessary on
this point. Therefore, no interference is required, and this appeal F
also stands dismissed.
SLP (C) No. 15482/2019; SLP (C) No. 15487/2019; SLP
(C) No. 15479/2019; SLP (C) No. 15477/2019; SLP (C) No.
15474/2019; SLP (C) No. 15466/2019; SLP (C) No. 15446/
2019; SLP (C) No. 15447/2019; SLP (C) No. 21688/2019; G
SLP (C) No. 15471/2019; SLP (C) No. 15448/2019; SLP
(C) No. 15450/2019; SLP (C) No. 21690/2019; SLP (C) No.
15486/2019; SLP (C) No. 21662/2019; SLP (C) No. 21691/
2019

H
106 SUPREME COURT REPORTS [2019] 13 S.C.R.

A In these matters, though this ground has been argued in the Section
34 petition, as this ground is factual, no patent illegality arises.
Therefore, these appeals stand dismissed.
Ground 6: That compensation for shifting expenseswas granted
SLP (C) No. 15478/2019; SLP (C) No. 15477/2019
B
In these matters, this ground has not been taken and argued in
any of the Section 34 petitions. Therefore, these appeals stand
dismissed.
SLP (C) No. 15442-15443/2019; SLP (C) No. 15487/2019;
C SLP (C) No. 15479/2019; SLP (C) No. 21662/2019
In these matters, though this ground has been argued in the Section
34 petition, as this ground is factual, no patent illegality arises.
Therefore, these appeals stand dismissed.
Ground 7: That arbitration costs were awarded
D
SLP (C) No. 15442-15443/2019; SLP (C) No. 15487/2019;
SLP (C) No. 15477/2019; SLP (C) No. 15474/2019; SLP
(C) No. 14491/2019; SLP (C) No. 21657/2019; SLP (C) No.
9600/2019; SLP (C) No. 10210/2019; SLP (C) No. 15466/
2019; SLP (C) No. 21690/2019; SLP (C) No. 21662/2019;
E SLP (C) No. 21691/2019
In these matters, this ground has not been taken and argued in
any of in the Section 34 petitions. Therefore, these appeals stand
dismissed.
SLP (C) No. 15479/2019; SLP (C) No. 21682/2019; SLP
F (C) No. 9602/2019; SLP (C) No. 21687/2019; SLP (C) No.
21683/2019; SLP (C) No. 9604/2019; SLP (C) No. 15446/
2019; SLP (C) No. 15448/2019; SLP (C) No. 15450/2019
In these matters, this ground has not been taken and argued in
any of the Section 37 appeals. Therefore, these appeals also stand
G dismissed.
SLP (C) No. 15478/2019; SLP (C) No. 15482/2019; SLP
(C) No. 15470/2019; SLP (C) No. 21675/2019; SLP (C) No.
21673/2019; SLP (C) No. 15485/2019; SLP (C) No. 15447/
2019; SLP (C) No. 21692/2019
H
UNION OF INDIA & ANR. v. TARSEM SINGH & ORS. 107
[R. F. NARIMAN, J.]

In these matters, this ground has not been taken up in any of the A
Special Leave Petitions. Therefore, these appeals stand dismissed.
Ground 8: That compensation was awarded based on post-
notification sale deed
SLP (C) No. 15470/2019; SLP (C) No. 15444-15445/2019;
SLP (C) No. 14491/2019; SLP (C) No. 21664/2019; SLP B
(C) No. 21671/2019; SLP (C) No. 21670/2019; SLP (C) No.
21663/2019; SLP (C) No. 21695/2019; SLP (C) No. 21693/
2019; SLP (C) No. 9602/2019; SLP (C) No. 9600/2019; SLP
(C) No. 21687/2019; SLP (C) No. 21683/2019; SLP (C) No.
21689/2019; SLP (C) No. 9604/2019; SLP (C) No. 21696/ C
2019; SLP (C) No. 21666/2019
In these matters, this ground has not been taken and argued in
any of the Section 34 petitions. Therefore, these appeals stand
dismissed.
Ground 9: That compensation was awarded based on sale deeds D
of smaller plots of land
SLP (C) No. 15470/2019; SLP (C) No. 21666/2019; SLP
(C) No. 21671/2019; SLP (C) No. 21670/2019; SLP (C) No.
21663/2019; SLP (C) No. 9602/2019; SLP (C) No. 21687/
2019; SLP (C) No. 21683/2019; SLP (C) No. 21689/2019; E
SLP (C) No. 9604/2019; SLP (C) No. 21696/2019
In these matters, this ground has not been taken and argued in
any of the Section 34 petitions. Therefore, these appeals stand
dismissed.
F
Ground 10: That compensation on account of severance of land
was awarded
SLP (C) No. 15470/2019; SLP (C) No. 15479/2019; SLP
(C) No. 15471/2019
In these matters, this ground has not been taken and argued in G
any of the Section 34 petitions. Therefore, these appeals stand
dismissed.
SLP (C) No. 10210/2019
In this matter, this ground has not been taken in the Special Leave
Petitions. Therefore, this appeal stands dismissed. H
108 SUPREME COURT REPORTS [2019] 13 S.C.R.

A SLP (C) No. 15485/2019; SLP (C) No. 15474/2019; SLP
(C) No. 15447/2019; SLP (C) No. 15486/2019; SLP (C) No.
21691/2019
In these matters, though this ground has been taken in the Section
34 petition, no patent illegality arises. Therefore, these appeals
B stand dismissed.
Ground 11: That compensation on account of loss of business
was awarded
SLP (C) No. 15487/2019; SLP (C) No. 21675/2019

C In these matters, this ground has not been taken and argued in
any of the Section 34 petitions. Therefore, these appeals stand
dismissed.
SLP (C) No. 15477/2019; SLP (C) No. 15474/2019; SLP
(C) No. 15466/2019; SLP (C) No. 15446/2019; SLP (C) No.
D 15447/2019; SLP (C) No. 21688/2019; SLP (C) No. 15471/
2019; SLP (C) No. 15450/2019; SLP (C) No. 21690/2019;
SLP (C) No. 21691/2019; SLP (C) No. 21692/2019
In these matters, though this ground has been argued in the Section
34 petition, no patent illegality arises. Therefore, these appeals
stand dismissed.
E

Kalpana K. Tripathy Appeals disposed of.

F

G

H