SANAPALA SURYANARAYANA Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) The petitioners, four in number, own and personal!/ cultivate varying extents of agricultural lands situated in several survey numbers, 2/1, 3/2, 7/3,19/1 9/2 of Madhavadhara village of Vishakhapatnam District. The first and the second petitioners own Ac.6-30 cents and Ac.0-19 cents jn survey numbers 2/1 and 3/2 of that village. The first and the third petitioners own an undivided half share in a total extent of Ac. 8-75 cents in survey No.7/3 white the fourth petitioner owns an extent of Ac. 2-95 cents and another Ac.1-45 cents in survey numbers 9/1 and 9/2 of Madha- vadara village. Acting under its authority of the LAND ACQUISITION ACT, 1894, 1894 (hereinafter referred to as 'the Act') the State Government published a notification under Section 4(1) in the Andhra Pradesh State Gazette dated 4-7-1968 intimating all concerned its proposal to acquire the above lands for a public purpose of housing scheme. Under Sec.4(2) of the Act, a Special Tahsildar was appointed to exercise the powers of inspection and report. Mercifully, the holding of inquiry under Section 5-A of the Act was not dispensed with in this case as it is being done so mechanically and so regularly in so many cases of land acquisition in the State whether there is or there is not urgency. Accordingly, inquiry was held into and objections of the land owners' were heard under Section 5-A of the Act. Thereafter within a reasonably short time the State Government through its order No. 91 dated 27-8-1970 made a statutory declaration under Section 6 of the Act of its intention to acquire the petitioners' lands. But there it stopped. The next step which the State Government ought to have taken under the Act, but which it had failed to take and which if taken would have brought the land acquisition proceedings to a close, was to hold an award inquiry and pass an award and pay compensation. Section 9 of the Act requires an award inquiry should be held after individually serving the land owners with notices. After hearing their claims an award should be passed under Section 11 of the Act. The award would give the true area of the land, the compensation amount which should be allowed for the land and the apportionment of the said compensation among the claimants believed to be interested in the land. When the Collectot makes an award under Section 11 of the Act, law empowers him to take possession of the land which thereupon would vest sbsolutely In the Government free from all encumbrances. The compensation fixed, as above would be paid to the landlord. However, the statute does not fix any limit within which the award inquiry should commence and when the award should be passed. However, Section 13 of the Act indicates that the Collector may not adjourn the hearing of an award inquiry once begun without sufficient cause. It imparts a sense of urgency to the completion of inquiry. Routine matters of Revenue Administration should not hold up the award inquiry. Yet in this case, nearly one decade from the time of Section 6 declaration made on 12-11-1970 pasted without even an award inquiry being commenced. This inaction on the part of the land acquisition authorities was not due to any reasons of routine administration nor due to reasons of negligence nor indolence nor indecision on the part of the land acquisition authorities. It is the direct result of a Memo. No. 1647-UC/76-3 dated 7-9 1976 through, which the State Government directed the land acquisition authorities all over the State not to proceed w.th the pending land acquisition proceedings in respect of lands lying in any one of the five urban agglomerations in the State coming under the Urban Land Ceiling Act. The lands In this case do fall under one of the above Urban Land agglomerations and come within the purview of the above Memo. The Land Acquisition Officers, in obedience to the above Memo, did not proceed with the award inquiry resulting in this one decade delay. But there may also be cases where awards undar the Act ware not passed and compensation was not paid for unconscionably long period of times for other reasons. For the pur. poses of the Constitution reasons do not really matter. The real question is whether there is or there is not delay. In normal times where the purchasing power of Rupee is stable and stationary these delays wonld not have effected the land owners. But in the extraordinary times of gallop" ing inflation through which we are passing today whan the purchasing power of the Rupee is falling day in and day out, this long delayed calculation and much longer delayed payment of compensation would clearly result in confiscating the properties of the land owners and they do not merely amount to acquiring them under Eminent Domain. In determining the amount of compensation payable no matter when it is ascertained or paid only the market value of the acquired land ptevailing on the date of Section 4 (1) notification can alone legally be taken note of according to Section 23 (1) of the Act. In this case, the land owners, according to Sec. 23(1) of the Act, would get as compensation for their lands the market rates, prevailing a decade back. In this case, the landlords waited for over ten years without getting compensation for the lands proposed to be acquired by the State in the year 1968. Now, when the Land Acqisi- tion Officer issued award inquiry notices, the lerdlords filed this writ petition asking 'his Court to stop acquisition by quashing the notification under Section 4 (1) of the Act, which is the very basis for the entire land acquisition proceedings. The petitioners' prayer if granted, would clearly result in terminating the land acquistion proceedings in this case. The question that falls for consideration is whether there is anything of authority either in legal or constitutional principle or legal or constitutional text or precedents or in the provisions of the Act itself justifying this court granting this relief to the petitioners.

(2.) Under law, every sovereign State enjoys the power of Eminen t Domain to take private property for public use without the owners consent. Mukherjee J., said in Chiranjit Lai vs. Union Of India (1) 1951 SC 41 at P. 84. "It is a right inherent in every sovereign to take and appropriate private property belonging to individual citizens for public use. This right, which Is described as Eminent Domain in American Law. is like the power of taxation, an off spring of political necessity.... But law recognises two significant limitations on the exercise of this power of Eminent Domain. One is. that the power of Eminent Domain can never be used except for a public purpose and the other is that the power of Eminent Domain cannot be used except on payment of just compensation. Speaking of the second limitation on the power of Eminent Domain. Justice Story of the American Supreme Court equated that limitation wtth a necessary condition of a just Government He declared, that it would be vain to speak of just Government without such a limitation on ths power of Eminent Domain (see-Bernard Schwartz. "A Commentary on the Constitution of the United States. The Rights of Property, para 328). In England the courts acting according to one of the basic constitutional assumptions of the British Constitution would refuse to attribute to the British Parliament any iniention to deprive the subject of his property without paying him just compensation unless, of course, the intention is expressed by the sovereign Parliament, in unequivocal terms (see'Cases in Constitutional Law (iatest) Keir & Laws on p.120.) The LAND ACQUISITION ACT, 1894. 1894 enacts both the principle of Eminent Domain and its too well recognised limitations. While empowering the State to acquire private property for any public purpose, the Act directs the Slat to pay compensation to the land owner Payment of compensation is the foundation for the working of the Act. In upholding the exercise of power of Eminent Domain, Courts must not fail to give full effect to the concept of compensation on which rests the lawful exercise of the power of Eminent Domain. It is, therefore necessary to emphasise the particular connotation of the word compensation in the particular context of Eminent Domain. In Welungaloo Pvt Ltd V. Commonwealth (1948) 75 CIR 495 P.571) Dixon J., said that the purpose of compensation under Eminent Domain is.

(3.) But in the present day inflationary times through which we are passing where money is no longer fully perfoiming Its true function as measure of value or store of wealth and it is fast losing its exchange value delayed computation of compensation on the basis of an anterior date aa permitted by S 23( I) of the Act and delayed payment of the ccmpensation or clearly altering the legal character of compensation, although still nominally called compensation. The ascertainment of the value of the acquired asset computed by reference to a point of time not contemporanious with the time of payment of compensation would today be clearly contrary to the underlying purpose of the Act which requires payment of full and adequate compensation. That is due to the monetary instability. Such a method of valuation though literarily permitted by Section 23(1) of the Act becomes in the words of Lord Morris an out of date valuation. In other words, the underlying assumption of the Act and more particularly that of Sec. 23(1) of the Act which is the monetary stability is no longer applicable to the present day times of the close of the twentieth century. In these circumstances, if we today permit the computation of compensation to be made on any time basis other than the basis of contemporary time of payment of compensation it would amount to permitting the exercise of power of Eminent Domain as an exercise of power to confiscate immoveble properties. This would clearly be defeating one of the major objectives of the Act and also the general principles of the power of Eminent Domain by permitting taking away private property without payment of full compensation. "That could never have been the intention of those nineteenih Century law-makers who made the LAND ACQUISITION ACT, 1894, In asmuch as payment of full compensation is made by the Act an integral part of the Act itself, we would not be justified in permitting theexerciseof the power of eminent Domain while ignoring the limitations subject to which that power stands conferred on the Stats by the Act. It follows that any acquisition of land under the provisions of the Act not followed by computation of the market value of the land prevailing on the dete of payment of the compensation, would be wholly invalid and unauthorised.