2003 (4) TMI 560 - SC - Indian Laws

Summary

Issues Involved:
1. Constitutional validity of the Defence of India Act, 1971.
2. Applicability of solatium and interest provisions from the Land Acquisition Act to the Defence of India Act.
3. Classification and rationality of compensation schemes under different Acts.
4. Refund of solatium and interest already paid.

Summary:

1. Constitutional Validity of the Defence of India Act, 1971:
The core question in these appeals is the constitutional validity of the Defence of India Act, 1971 ("The Act") on the premise that the absence of any provision for payment of solatium and interest for the acquisition of land is hit by Article 14 of the Constitution of India. The High Court of Punjab and Haryana had held that Section 31 of the Act is ultra vires Article 14, entitling respondents to claim solatium at 15% and interest at 6% per annum.

2. Applicability of Solatium and Interest Provisions:
The Supreme Court considered whether the provisions of the Land Acquisition Act regarding solatium and interest should be read into the Defence of India Act. Previous judgments, including Union of India v. Hari Krishan Khosla and Union of India v. Dhanwanti Devi, held that the respective schemes for acquisition under the Defence of India Act and the Land Acquisition Act are distinct and different. The Court reaffirmed that the provisions for solatium and interest under the Land Acquisition Act cannot be read into the Defence of India Act.

3. Classification and Rationality of Compensation Schemes:
The Court examined whether the classification for compensation under the Defence of India Act vis-a-vis the Land Acquisition Act is rational. It was held that the classification is reasonable and valid, founded on intelligible differentia, and has a rational relation with the object sought to be achieved by the legislation. The Defence of India Act is a self-contained code with its own procedure and machinery for determining compensation, which does not ipso facto apply the provisions of the Land Acquisition Act.

4. Refund of Solatium and Interest Already Paid:
The Court addressed whether the solatium and interest already paid to the respondents should be refunded. It was noted that the arbitrators had not been appointed despite demands, and the amounts were paid decades ago. The Court decided that in the interest of justice, the appellants should not recover the amounts already paid. However, this direction was not to be treated as a precedent.

Conclusion:
The Supreme Court set aside the High Court's judgment, upholding the constitutionality of the Defence of India Act, 1971, and confirming that the provisions for solatium and interest under the Land Acquisition Act do not apply to acquisitions under the Defence of India Act. The appeals were allowed with the observation that the amounts already paid should not be recovered, ensuring no costs were imposed.