STATE OF MADRAS versus D. NAMASIVAYA MUDALIAR AND OTHERS

Citation: [1964] 6 S.C.R. 936 · Decided: 03-03-1964 · Supreme Court of India · Bench: P.B. GAJENDRAGADKAR · Disposal: Dismissed
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Judgment (excerpt)

1961 
March, 3 
SUPREME COURT REPORTS 
STATE OF MADRAS 
v. 
D. NAMASIVAYA MUDALIAR AND OTIIERS 
(P. B. GAJENDRAGADKAR, C.J., K. N. WANCHOO, J. C, 
SHAH, N. RAJAGOPALA AYYANGAR AND s. M. SIKRI, JJ.) 
Madras Lignite (Acquisition of Land) Act (XI of 1953). ss. 2 and 3 
-Acquisition of lignite lands-Compensation to be 
asse~sed on 
market value prel'ailing on April 28, 1947-Va/ue of nvn·agricul-
J... 
tural improvements after that date not to be taken into considera-
tion-Act passed before 
Constitution (Fonrth Amend1nent)-
Validity of Ac:--Compensations now fixed-Constitution of India, 
Art. 31 PTior to the Constitution (Fourth Amend111e11t) 
Act, 1955. 
The respondents in the above appeals are owners of certain lands 
which are to be compulsorily acquired untler Madras Lignite 
(Acqui-
sition of Land) Act, 1953. This Act came into force on August 
20, 
1953 before Art. 31 of the Constitution was amended by the Constitu· 
tion (Fourth Amendment) Act, 1955. By the saia Act substantially 
two provisions which are material to the present appeals were made. 
The first was that compensation for acquisition of lignite-bearing lands 
under the Land Acquisition Act is to be assessed on the market value 
of the land prevailing on August 28, 1947 and not on the date on which 
notification is,/issued under s. 4( 1) 
of the 
Land 
Acquisition 
AcL 
Secondly it was provided that in awarding compensation the value of 
non-agricultural improvements commenced since April 28, 1947 will no& 
be taken into consideration. 
In accordance with the above provisions, after issuing the notices u 
required under ss. 4(1) and 6 of the Land Acquisition Act the Land 
Acquisition Officer made awards regarding the lands of the respondents. 
The respondents thereupon filed petitions under Art. 226 of the Consti• 
tution before the High Court of Madras challenging the validity of tho 
award on the ground that the provisions of the i\ct relating 
to 
tho 
award of compensation violate Art. 31(2) of the Constitution [as ii 
stood before the Constitution 
(Fourth Amendment) Act. 1955]. Tho 
High Court upheld the contention. In appeal, 
Held: (i) The validity of the Act impugned in the present appeal 
has to be examined in the light of the provisions of Art. 31 
of tho 
Coristitution as they stood before the Constitution (Fourth Amendment) 
Act, 1955. 
Chiranjit Lal Chuwdhuri ii. Union of India, [1950] S.C.R. 869, State 
of West Bengal v. Subodh Gopa/ Bose, [1954] S.C.R. 587, ao'd State of 
West Bengal v. Mrs. Bela Baneriee, [1954] S.C.R. 558, relied. 
,. 
6 S.C.R. 
SUPREME COURT REPORTS 
937 
(ii} The principle laid down in Bela Ban ;rjee's case, that the ceilj :1 ... 
on the compensation without reference to the value of the land at the 
time of the acquisition is arbitrary and cannot be regarded as due com .. 
pensation in letter and spirit \Vithin the reliuircrnent of Art. 31(2), would 
apply to the impugned Act. 
Fixation of compensation for C.:"·11pulsory 
acquisition of land notified many years after that date on the market 
value prevailing on the date on which lignite was discovereCl is wholly 
arbitrary and inconsistent with the letter and spirit of Art. 31(2) as it 
stood before the Constitution (Fourth Amendment) Act, 1955. 
(iii) Any principle for determination of compensation denying to the 
owner all increments in value between a fixed date and the date of issue 
of the notice under s. 4( 1) of the Land Acquisition Act must prilna facie, 
be regarded as denying him the true equiv:ilent of the land which is ex· 
propriatcd and it is for the State to show that fixation of compensation 
on the market value on an anterior date does not amount to a viofo.tion 
of the Constitutional guarantee. In the present appeals no materials 
have been placed by the State which would support any such case. 
(iv) Denial of compensation for the value of non-agricultural im~ 
provements would be denying to him just 
compensation for the loss 
suffered by him on account of compulsory acquisition of his holding 
and would amount to infringement of Art. 31(2) of the Constitution. 
CIVIL APl'ELLATE JURISDICTION: Civil Appeals Nos. 6 
to 12 of 1963. 
Appeals from the judgment and decree dated February 
2, 1959 of the Madras High Court in Writ Petition Nos. 1, 
2, 202, 203, 204, 309 and 373 of 1958. 
A. Rang1N1adham Chetty and A. V. Rangam, for the 
appellants (in all the appeals). 
R. Gopalakrishnan, for the respondent (in C.A. No. 
11/63). 
S. V. Gupte, Additional So
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