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Issues Involved:
1. Validity of the Nagpur Improvement Trust Act, 1936, in relation to Article 14 of the Constitution. 2. Discrimination in compensation under the Nagpur Improvement Trust Act compared to the Land Acquisition Act, 1894. 3. Whether the acquisition authority is the State or the Improvement Trust. 4. Reasonable classification for legislation under Article 14. 5. Applicability of Article 31(A)(1)(a) regarding agrarian reforms and development. Issue-wise Detailed Analysis: 1. Validity of the Nagpur Improvement Trust Act, 1936, in relation to Article 14 of the Constitution: The petitioner challenged the validity of the Nagpur Improvement Trust Act, 1936, on the grounds that it violated Article 14 of the Constitution, which guarantees equality before the law. The High Court held that the provisions of paragraphs 10(2) and 10(3) of the Nagpur Improvement Trust Act, which added a new Clause (3)(a) to Section 23 and a proviso to Sub-section (2) of Section 23 of the Land Acquisition Act, were ultra vires as they violated the guarantee of Article 14. The Supreme Court upheld this view, stating that the provisions allowed for the acquisition of land at prices lower than those payable under the Land Acquisition Act, 1894, thereby discriminating against landowners. 2. Discrimination in compensation under the Nagpur Improvement Trust Act compared to the Land Acquisition Act, 1894: The Supreme Court noted that the modifications in the Nagpur Improvement Trust Act resulted in significant disadvantages for landowners. Specifically, the compensation was based on the market value according to the use of the land at the time of acquisition, ignoring its potential value. Additionally, landowners did not receive the 15% solatium provided under the Land Acquisition Act. The Court held that this differential treatment violated Article 14, as it allowed the State to discriminate between landowners equally situated. 3. Whether the acquisition authority is the State or the Improvement Trust: The Court clarified that the acquisition was carried out by the State, even though it was for the benefit of the Improvement Trust. This was evident from Section 17A, which stated that the land would vest in the Trust only upon payment of the acquisition cost to the Government. Therefore, the acquisition was by the Government, enabling it to acquire land either under the Land Acquisition Act or the Improvement Act, leading to potential discrimination. 4. Reasonable classification for legislation under Article 14: The Supreme Court reiterated that for a classification to be reasonable under Article 14, it must satisfy two tests: it must be founded on an intelligible differentia and the differentia must have a rational relation to the object sought to be achieved by the legislation. The Court found that the classification based on the public purpose or the authority acquiring the land did not meet these criteria. It stated that the object of the legislation could not be discriminatory and that different principles of compensation based on the acquiring authority or the public purpose were not permissible. 5. Applicability of Article 31(A)(1)(a) regarding agrarian reforms and development: The petitioner also invoked Article 31(A)(1)(a), which pertains to agrarian reforms and development. The Supreme Court clarified that this Article was irrelevant to the case at hand, as it dealt with the acquisition of land for building a state capital, not agrarian reforms. Conclusion: The Supreme Court dismissed the appeal, upholding the High Court's decision that the provisions of the Nagpur Improvement Trust Act, 1936, were ultra vires as they violated Article 14 of the Constitution. The Court emphasized that any classification for the purpose of legislation must be reasonable and non-discriminatory, and that the acquisition of land for public purposes should not result in unequal treatment of landowners. The appeal was dismissed with costs.
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