Holding

When a State Act incorporates the Land Acquisition Act by reference, the incorporated provisions become part of the State Act and are insulated from later amendments to the central Act, thereby entitling claimants to the benefits of the amended provisions unless the award predates the amendment’s effective date.

Summary

The Supreme Court examined whether the provisions of the Land Acquisition Act, 1894 (especially sections 6, 23(1‑A), 23(2) and 28) were incorporated into three State Acts – the Punjab Town Improvement Act, the Nagpur Improvement Trust Act and the Uttar Pradesh Awas Evam Vikas Parishad Act – or merely referred to. It held that the State Acts legislatively incorporated the Land Acquisition Act, so later amendments to the central Act do not affect acquisitions made under the State Acts. Consequently, claimants are entitled to the benefits of the amended sections (solatium, additional compensation and interest) for acquisitions under the State Acts, except where the award was made before 30 April 1982, when the additional compensation under section 23(1‑A) does not apply. The Court also affirmed the right to interest on all compensation components, including the additional amounts, and dismissed the High Court rulings that had denied these benefits. The appeals were partly allowed and partly dismissed.

Issues considered

Whether the Land Acquisition Act, 1894 is incorporated or merely referred to in the Punjab, Nagpur and Uttar Pradesh State Acts.
Whether subsequent amendments to the Land Acquisition Act (1967, 1984) apply to acquisitions made under the State Acts.
Whether claimants are entitled to additional compensation under section 23(1‑A), solatium under section 23(2) and interest under section 28 for acquisitions under the State Acts.
Whether the three‑year limitation period under section 6 of the Land Acquisition Act applies to the State Acts.
Whether denial of the amended benefits violates Article 14 of the Constitution.

Legislation cited

Constitution of Indias. Article 14
Land Acquisition Act, 1894s. 23(1-A), s. 23(2), s. 28, s. 6
Land Acquisition (Amendment) Act, 1984
Nagpur Improvement Trust Act, 1936s. 59, s. 61(b)
Punjab Town Improvement Act, 1922s. 59
Uttar Pradesh Awas Evam Vikas Parishad Adhiniyam, 1965s. 55

Subjects

Land acquisitionLegislative incorporationCompensationSolatiumInterestSection 6Section 23Amendment Act 1984Article 14Statutory constructionState legislation

Judgment

t

A NAGPUR IMPROVEMENT TRUST
r
V.

VASANTRAO AND ORS.
t
SEPTEMBER 26, 2002

B [B.N. KIRPAL, CJ., SHIVARAJ V. PATIL AND B.P. SINGH, JJ.]

Land Acquisition Act, 1894 [as amended by Land Acquisition
(Amendment and Validation) Act, 1967 and Land Acquisition (Amendment)
C Act, 1984)-Sections 6,23(1-A), 23(2) and 28-Punjab Town Improvement
Act, 1922-Section 59-Nagpur Improvement Trust Act, 1936-Section 59-
Uttar Pradesh Awas and Vikas Parishad Adhiniyam, 1965-Section 55-
Provisions of State Acts providing acquisition under Land Acquisition Ac/-
Applicability of the subsequenl amendments of Land Acquisition Acl to the
State Acts-Whether Land Acquisition Act incorporated or merely referred to
D in lhe Slate Acts-Held, Land Acquisition Act legislatively incorporated in the
State Acts and hence subsequent amendments of Section 6 will have no effect
on the acquisition made under the State Acts-Bw claimants are entitled to
the benefits conferred by section 23(/-A) and sections 23(2) and 28 of the
Land Acquisition Act because while incorporating the provisions of the Land
E acquisition Act in the State Acts, the intention of the legislature was that
amendments in the Land Acquisition Act relating to determination and payment
of compensation would be applicable to acquisition of lands for lhe purposes
of the State Acts.

Legislation by incorporation-Effect of-Held, when an earlier Act or
F certain of its provisions are incorporated by reference into a later Act, later
Act constitutes an independent legislation and repeal of the first statute by a
third does not affect the second-But where there is mere reference to an )
earlier Act in later Act, modification, repeal or amendment of the statute that
is referred will also have an effect on the statute in which it is referred- •
Whether a former statute is merely referred to in a later statute, or it is wholly
G or partia!Zv incorporated therein is a question of construction..

Punjab Town Improvement Act, 1922, Nagpur Improvement Trust
Act, 1936 and Uttar Pradesh Awas Evam Vikas Parishad Adhiniyam,
provide for acquisition of land in accordance with the provisions of the
Land Acquisition Act subject to the modifications made thereto by the Acts
H
636
NAGPUR IMPROVEMENT TRUST v.VASANTRAO 637

and/or the schedule to the Acts. A
The common question for consideration in the present cases were
whether Sections 6, 23(2) and 28 of Land Acquisition Act, 1894 of Land
Acquisition Act, stands incorporated or merely referred to in the State
Acts in order to decide whether the claimants were entitled to the benefits
given by subsequent amendments of the provisions above mentioned by B
J Land Acquisition (Amendment and Validation) Act, 1967 and Land
Acquisition (Amendment) Act, 1984.

In the matters arising under the Punjab Act, High court held that
claimants whose lands were acquired under the Punjab Act were entitled C
to additional compensation u/s 23(1-A) and also to the solatium u/s 23(2)
and interest u/s 28 of the Land Acquisition Act as amended by 1984 Act. ·

In matters relating to Nagpur Act, High Court held that since Land
Acquisition Act is merely referred to in Nagpur Act, the provisions of
Section 6 including proviso thereto of Land Acquisition Act apply to D
acquisitions under Nagpur Act; and that notice u/s 39 of the Act
(corresponding to Section 4 of Land Acquisition Act) lapsed since
notification u/s 45 of the Act (corresponding to Section 6 of Land
Acquisition Act) was published after more than three years from the date
of notification u/s 39 of the Act.
E
In matters relating to U.P. Act, High Court held that since Section
6 of Land Acquisition act was legislatively incorporates in the U.P. Act
which was of 1965, subsequent amendments of section 6 of Land
acquisition Act in 1967 did not affect the provisions of U.P. Act, and
therefore acquisition proceedings did not lapse on expiry of period of three
years from the date of issuance of notification u/s 28 of the Act F
(corresponding to Section 4 of Land Acquisition Act).

In appeal to this Court Jallandhar Improvement Trust in the matters

- relating to Punjab Act contended that the claimants were not entitled to
the beneficial provisions under the Land Acquisition Act as brought in
by amending the Land Acquisition Act even in respect of acquisition under
Punjab Act as the Scheme of the Punjab Act was different from the
G

Scheme of Land Acquisition Act and different equities arose under the
two Acts; that the compensation paid was not justifiable having regard
the principles laid down in Maneklal Chhotalal and State of Gujarat cases;
that since the two legislations were under two different entries of the H
638 SUPREME COURT REPORTS [2002] SUPP. 2 S.C.R.

A Constitution, Article 14 of the Constitution of India could not be invoked;
that since under the Punjab Act, trust is the acquiring authority and not
the State, there cannot be allegation of discrimination against it; and that
even if claimants cannot be deprived of enhanced solatium under Section
23(2) of land Acquisition Act, in the facts of the case they are not entitled
B to the benefit of additional compensation payable under Section 23(1-A)
of Land Acquisition Act, which was brought in by way of amendment in
1984.

Nagpur improvement Trust and U.P. Avas Evam Vikas Parishad
contended that provisions of Nagpur and U.P. Acts and the modifications
C brought about by these Acts show that the Land Acquisition Act stood
incorporated by legislation in the state Acts and therefore it cannot be
said that legislature intended that subsequent amendments in the Land
Acquisition Act, 1894 should apply to an acquisition under the said Act;
that mere absence of a limitation of time period for issuance of declaration
under Section 6 would not imply a breach of Article 14 of the Constitution;
D that the provisions pertaining to compensation would be different from
the provisions as pertaining to the time limit of notifying sanction of the
draft.S'cheme; that the cases of this Court pertaining to compensation
being equal to the compensation paid under the Land Acquisition Act in
view of Article 14 would have no applicability for invoking the proviso to
E Section 6 of the Land acquisition Act in respect of the scheme under the
Nagpur Act.

Respondents in cases pertaining to Punjab Act contended that
awarding solatium and interest under beneficial provisions of the Land
Acquisition Act as amended in year 1984 by High court is correct; that
F the provisions of the Punjab Act will have to be struck down as
discriminatory if the claimants are not given benefit of the beneficial
provisions of the Land Acquisition Act as amended in year 1984.

The respondents in cases pertaining to Nagpur Act and U.P. Act

G
contended that Section 59 as well as Section 61(b) of Nagpur Act simply
cites/refers to the Land Acquisition Act and does not incorporate
referentially, hence all the amendments made to the Land Acquisition Act
-
must apply automatically; that even if it is assumed that the provisions
incorporate the Land Acquisition Act, it falls in exceptional situations
carved out by this Court namely that it is supplemental to the Land
H Acquisition Act and, therefore, incidence of incorporation shall not follow;
NAGPUR IMPROVEMENT TRUST v. VASANTRAO 639

and that not applying the amendments leads to unconstitutionality of the A
Act. .

In Civil Appeal Nos. 6590-6592 of2001, this Court had held that the
claimants whose land had been acquired under Land Acquisition Act were
entitled to interest on the amount envisaged in Section 23(2) of Land
Acquisition Act. Hence the sole question for consideration was whether B
the claimants were also entitled to interest on the sum payable under sub-
section (I-A) of Section 23 of the Land Acquisition Act.

Disposing of the appeals, the Court

HELD: 1.1 When an earlier Act or certain of its provisions are C
incorporated by reference into a later Act, the provisions so incorporated
become part and parcel of the later Act as if they had been bodily
transposed into it. The incorporation of an earlier Act into a later Act is
a legislative device adopted for the sake of convenience in order to avoid
verbatim reproduction of the provisions of the earlier Act into the later. D
But this must be distinguished from a referential legislation which merely
contains a reference or the citation of the provisions of an earlier statute.
In a case where a statute is incorporated, by reference, into a second
statute, the repeal of the first statute by a third does not affect the second.
The later Act alongwith the incorporated provisions of the earlier Act
constitute an independent legislation which is not modified or repealed by E
a modification or repeal of the earlier Act. However, where in laterAct
there is a mere reference to an earlier Act, the modification, repeal or
amendment of the statute that is referred, will also have an effect on the
statute in which it is referred. The question whether a former statute is
merely referred to or cited in a later statute, or whether it is wholly or p
partially incorporated therein, is a question of construction. 1658-B-DI

U.P. Avas Evam Vikas Parishadv. Jainul Islam and Anr., 1199812 SCC
467; Mary Roy v. State of Kera/a, 11986] 2 SCC 209; Ramsarup v. Munshi,
AIR (1963) SC 553; Ram Kripal Bhagat v. State of Bihar; AIR (1976) SC
951; Bo/ant Ores Ltd. v. State ofOrissa, AIR (1975) SC 17 and Mahindra G
and Mahindra Ltd v. Union of India, AIR (1979) SC 798, relied on.

SecretGJy of State v. Hindustan Cooperative Insurance Society Ltd.,
AIR (1931) PC 149 and Jn Re: Wood's Estate, Ex parte, Works and Buildings
Commrs., (1886) 31 Ch D 607, referred to.
H
640 SUPREME COURT REPORTS [2002] SUPP. 2 S.C.R.

A 1.2. So far as the U.P. Act is concerned the Land Acquisition Act, as
modified, stands incorporated in the U.P. Act. However, as a matter of
construction, Section 55 of the U.P. Act, while incorporating the provisions
of the Land Acquisition Act intended to apply to acquisition made under
the U.P. Act the beneficial amendments that may be brought about for
B determination and payment of compensation, in the Land Acquisition Act,
1894. Nagpur Act, Punjab Act as well as the U.P. Act have a common
scheme and pattern. All the three legislations relate to town planning and
development, and each one of them specifies the various schemes that may
be undertaken. For acquisition of land for the purposes of any of the
schemes under the said Acts, the Land Acquisition Act, 1894 has been
C made applicable with certain modifications as contained in the schedule
to the said Acts which are numerous and substantial. The modifications
made are also similar. There is no distinction in the three Acts, which may
have a bearing on the question relating to legislative incorporation of the
Land Acquisition Act in the State Acts. [668-G-H; 669-A-D[

D UP. Avas Evam Vikas Praishadv. Jainul Islam and Anr., [19981 2 SCC
467, relied on.

Bhatinda Improvement Trust v. Ba/want singh and Ors., [19911 4 SCC
368, distinguished.

E Gauri Shankar Gaur and Ors. v. State of UP. and Ors., [199411 SCC
92, referred to.

1.3. Though under the Land Acquisition Act as amended in its
application to the State of U.P. there was no provision for grant of solatium
by the U.P. Act such solatium was provided for. The intention of the
F legislature was apparent that it wanted to confer the benefit of solatium
by modifying Section 23(2) which benefit was not available under the
provisions of the Land Acquisition Act as it was applicable in the State of
U.P. at the time of enactment of the U.P. Act. So far as the Punjab Act
and the Nagpur Act are concerned, the schedules do not modify the
G provisions of Section 23(2) of the Land Acquisition Act which provides
for payment of solatium. However, a proviso was added to the effect that
sub-section (2) shall not apply to any land acquired under the State Acts
in question. This clearly implies that where acquisition was made under
the provisions of the Land Acquisition Act, as modified, the legislature
did not intend to deprive the claimants of solatium as provided under the
H Land Acquisition Act. But solatium was not payable in cases of acquisition
NAGPUR IMPROVEMENT TRUST v. VASANTRAO 641

under the State Acts. There are provisions in Punjab Act as well as Nagpur A
Act which permit the State to acquire lands for the purposes of the schemes
without resorting to the provisions of the Land Acquisition Act such as
acquisition by purchase lease exchange or otherwise, or acquisitions
contemplated under deferred street scheme, development scheme and
expansion scheme. In respect of such acquisitions solatium is not payable. B
In these circumstances with a view to save the law from the vice of
arbitrary and hostile discrimination, the provisions must be construed to
mean, in the absence of anything to the contrary, that the provisions of
the Land acquisition Act as amended by the 1984 Act relating to
determination and payment of compensation would apply to acquisition
of land for the purposes of the State Acts. It must, therefore, be held that C
while incorporating the provisions of the Land Acquisition Act in the State
Acts, the intention of the legislature was that amendments in the Land
Acquisition Act relating to determination and payment of compensation
would be applicable to acquisition of lands for the purposes of the State
Acts. Consequently the claimants are entitled to the benefits conferred by
section 23(1-A), if applicable, and section 23(2) and 28 of the Land D
Acquisition Act as amended by the 1984 Act for acquisition of land for
the purposes of the State Acts under Sections 59 of both the Nagpur and
the Punjab Acts. 1669-F-H; 670-A-E]

UP. Awas Evas Vikas Parishadv. Jainul Islam and Anr., 11998] 2 SCC E
467, relied on.

Prakash Amichand Shah v. State of Gujarat and Ors., 11986] I SCC
581; Maneklal Chhotelal and Ors. v. MG. Makwana and Ors., 11967] 3 SCR
65 and State ofGz!)arat v. Shanti/al, Mangaldas and Ors., 1196911SCC509,
distinguished. F
2. It cannot be contended that since under the Punjab Act, Trust is
the acquiring authority and not the State, there cannot be allegation of
discrimination against it. Since section 17-A is inserted in the Land
Acquisition Act by way of modification in all the three State Acts acquiring
authority under the State Acts is the Government and not the Trust. G
1671-C, DI

Om Prakash and Anr. v. State of UP. and Ors., 11974] I SCC 628,
relied on.

Nagpur Improvement Trust and Anr. v. Vithal Rao and Ors., AIR (1973) H
642 SUPREME COURT REPORTS [2002] SUPP. 2 S.C.R.

A SC 689, referred to.
3. Since the Awards of the Collector in the instant cases were made
much before 30th April, 1982, the claimants will not be entitled to the
benefit of additional amount payable under section 23(1-A) of the Land
Acquisition Act and the judgments and orders of the High Court on this
B aspect of the matter must be set aside. (672-F, GI

Union of India and Anr. etc. etc. v. Zora Singh and Ors. etc. etc., I 19921
I SCC 673 and K.S. Paripoornan v. State of Kera/a and Ors., 119941 5 SCC
593, referred to.

C 4. In C.A. Nos. 9260-9261 of 1995 as well, where the appellant has
claimed benefit of additional amount payable under section 23(1-A) or the
Land Acquisition Act, the Collector had made his Award much before 30th
April, 1982 and, therefore, the appellant's claim for additional amount
under Section 23(1-A) must be rejected. 1672-G-HJ

D 5. So far as the acquisition under the Nagpur Act and the U.P. Act
are concerned they have been challenged on the ground that the
Notification corresponding to the declaration under Section 6 of the Land
Acquisition Act was made more than 3 years after expiry of the date of
publication of the Notification corresponding to the Notification under
E Section 4 of the Land Acquisition Act. This was on the assumption that
the provisions of the Land Acquisition Act were not incorporated in the
State Acts but were merely referred to and the amendment of Section 6
of the Land Acquisition by insertion of proviso thereto by Land Acquisition
(Amendment and Validation) Act, 1967 (Act 13of1967), would apply to
the acquisitions. Since the provisions of the Land Acquisition Act as
F modified by the State Acts and the Schedule thereto stand incorporated
in the State .Acts and therefore, the subsequent amendments of Section 6
by the Act No. 13 of 1967 or by Act 68 of 1984 will have no effect on the
acquisition made under the State Acts. 1673-A, CJ

G 6. In Civil Appeal Nos. 6590 to 6592 of 2001 the claimants are
entitled to interest on the amount of compensation worked out in
accordance with the provisions of Section 23 of Land Acquisition Act
including all the Sub-sections thereof meaning thereby Sub-sections (I),
(I-A) and (2) of Section 23. 1674-CJ

H Sunder v. Union of India, 120011 7 sec 211, relied on.
NAGPUR IMPROVEMENT TRUST ~. VASANTRAO [B.P. SINGH. J.] 643

Prem Nath Kapur and Anr. v. National fertilizers Corporation of India A
Ltd. & Ors., (1996( 2 SCC 71, referred to

CIVIL APPELLATE JURISDICTION Civil Appeal Nos. 1164-
1200 of 1993.

From the Judgment and Order dated 16.10.1991 of the Mumbai High B
Court in W.P. Nos. 555 2304, 1592/82, 2367/83, 1983, 1429, 2723/84, 2432,
2707/85. 126, 464, 531, 570/86, 671/88, 726, 727, 749, 840, 849, 955, 1400,
1617, 1764, 1818, 1846, 1893, 1894, 1908, 1942, 2053, 2176, 2187/86,
2674/87, 463/88, 1388/86, 1765 and 1884 of 1986.

WITH c
C.A. Nos. 9209, 9210, 9213, 9214, 9260-9261/95, S.L.P. (C) Nos.
8256-8259/93, C.A. Nos. 839/95, 3789/92, S.L.P. (C) No. 12949/92, 333 I/
93, C.A. Nos. 9207, 9206195, S.L.P. (C) No. 3210/99, C.A. No. 921 I, 9212,
9208195, 6590, 6591, 6592 of 200 I.
D
Rakesh Dwivedi, V.A. Mohta, Rajinder Sachar, Ujagar Singh, N.N.
Goswami, Subodh Markandeya, Ms. Vimla Sinha, Abhishek Chaudhary, Sunil
Kumar Verma, T. Raja, M.K. Dua, Arvind Minocha, Ms. Madhu
Moolchandani, Sunil Kumar Verma, S.C. Patel, V.B. Saharya, K.K. Mohan,
Ambrish Kumar, E.C. Agrawala, N.M. Popli, Sanjeev K. Singh, Ms. Vrindha E
Dhar, A.K. Sanghi, K.C. Jain, Mrs. KawaljitKochar, S.C. Paul, C.L. Basha!,
Ms. Sonal Mahajan, J.D. Jain, R.S. Lambat, Uday Umesh Lalit, S.M. Jadhav,
Sanjeev Malhotra, Ravindra Bana, S.M. Sarin, P.N. Puri, Devendra Verma,
Satish Vig. S.S. Shinde, S.V. Deshpande, P.N. Gupta, Nischal Kumar, Vineet
Kumar, Mahabir Singh, R.K. Talwar, Yash Pal Dhingra, Harinder Mohan
Singh, Anil Hooda, Ms. lndu Goswamy, Bhargava V. Desai, Ms. Sweta F
Kakkad, Alok Gupta, Mohan Babu Agarwal, Kamlendra Misra, Ms. Chitra
Markandaya and K.C. Jain for the appearing parties.

The Judgment of the Court was delivered by

8.P. SINGH, J. In this batch of appeals and special leave petitions the
G
common question which arises for consideration is whether the provisions of
the Land Acquisition Act, 1894, particularly Sections 6, 23(2) and 28 thereof
stand incorporated in the three State Acts with which we are concerned in
these matters or whether the Land Acquisition Act has been merely referred
to in the State Acts. If it is held that the provisions of the Land Acquisition H
644 SUPREME COURT REPORTS [2002] SUPP. 2 S.C.R.

A Act stand legislatively incorporated in the State Acts, the subsequent
amendments to the Land Acquisition Act will have no effect upon the
acquisitions made under the State Acts. We are concerned with three State
Acts, namely, The Punjab Town Improvement Act, 1922 (hereinafter referred
to as 'the Punjab Act'); The Nagpur Improvement Trust Act. 1936 (hereinafter
B referred to as 'the Nagpur Act') and The Uttar Pradesh Avas Evam Vikas
Parishad Adhiniyam, 1965 (hereinafter referred to as 'the U.P. Act').

C.A. Nos. 9206 to 9214 of 1995; C.A. Nos. 9260-9261 of 1995; C.A.
No. 3789 of 1992; SLP (C) No. 12949/1992; SLP (C) No. 3331 /1993 & SLP
(C) No. 3210/1999 relate to acquisitions made under the Punjab Act. C.A.
C No. 839 of 1995 and C.A. Nos. 6590 to 6292 of 200 I relate to acquisitions
under the U.P. Act while C.A. Nos. 1164-2000 of 1993 and SLP (C) Nos.
8256-8259 of 1993 relate to acquisitions made under the Nagpur Act.

In the matters arising under the Punjab Act, the High Court of Punjab
and Haryana held that the claimants, whose lands were acquired under the
D Punjab Act were entitled to additional compensation under Section 23(1-A)
as amended by Land Acquisition (Amendment) Act, 1984 as also to the
solatium under Section 23(2) and interest under Section 28 of the Land
Acquisition Act as amended by Act 68 of 1984. Th·e Court relied upon the
judgment of this Court in Union of India and Anr. v. Zora Singh and Ors.,
E [1992], I sec 673; Nagpur Improvement Trust and Anr. V. Vithal Rao and
Ors., AIR (1973) SC 689 as also the full Bench of that Cowt in Harbans
Kaur and Ors. v. Ludhiana Improvement Trust and Ors., (1973) P.L.J. 250.

In the appeals which relate to the acquisitions under the Nagpur Act,
the appellant, namely the Nagpur Improvement Trust, has impugned the
F judgment and order of the High Court of Bombay (Nagpur Bench), Nagpur,
holding that the Land Acquisition Act is merely referred to in the Nagpur Act
and, therefore, the provisions of Section 6 including the proviso thereto apply
to acquisitions under the Nagpur Act. Since the notice under Section 39 of
the Nagpur Act corresponding to the Notification under Section 4 of the
Land Acquisition Act was first published in the official gazette on 25th
G December, 1969 and the subsequent Notification under Section 45
corresponding to the declaration under Section 6 of the Land Acquisition Act
was published on 18th September, 1974 i.e. after more than three years, the
same deserves to be quashed since the notice published under Section 39 of
the Act lapsed on expiry of three years from the date of its publication, and
H no action pursuant to the said notice could have been taken thereafter .

•
NAGPUR IMPROVEMENT TRUST v. VASANTRAO [B.P. SINGH, J.] 645

In Civil Appeal No. 839 of I 995 which arises under the U.P. Act, the A
High Court of Judicature at Allahabad dismissed the writ petitions challenging
the acquisitions before it holding that Section 6 of the Land Acquisition Act
was legislatively incorporated in the U.P. Act which was of the year 1965,
and that the subsequent amendment of Section 6 of the Land Acquisition Act
in the year 1967 did not affect the provisions of the U.P. Act including B
Section 6 of the Land Acquisition Act as incorporated in the U.P. Act. It,
therefore, rejected the contention urged on behalf of the petitioners that
acquisition proceedings lapsed on expiry of the period of three years from the
date of issuance of Notification under Section 28 of the U.P. Act which
corresponds with Section 4 of the Land Acquisition Act. The High Court
relied upon its Full Bench decision in Doc/ors Sahakari Gram Nirman Samili C
Lid v. Avas and Vikas Parishad etc. , AIR (1984) Allahabad 234.

In Civil Appeal Nos. 6590-6592 of 2001, the sole question is whether
the claimants are entitled to interest on the sum payable under Section 23 of
the Land Acquisition Act.
D
The Punjab Act was enacted to make provision for the improvement
and expansion of towns in Punjab. The Nagpur Act also makes provisions for
the improvement and expansion of the town of Nagpur. The U.P. Act has the
same objective but applies to whole of the State of Uttar Pradesh, excluding
the Cantonment areas. All these State Acts incorporate a similar scheme and
follow a common pattern. They provide for the constitution of Trust or Board, E
as the case may be, and also provide for various schemes for the improvement
and expansion of the areas covered by the Act. All the three Acts provide for
acquisition of land in accordance with the provisions of the Land Acquisition
Act subject to the modifications made thereto by the Act and/or the Schedule
to the Act. In a nutshell, the provisions of the Land Acquisition Act are made F
applicable to the acquisitions made under the State Acts subject to certain
modifications as indicated in the Act and/or the Schedule thereto.

Before we advert to the submissions urged at the Bar we may briefly
notice the scheme under the said A~ts.

The Punjab Act provides for the creation and incorporation of Trusts
G
which are charged with the duty of carrying out the provisions of the Act in
the local area within their jurisdiction. Provisions have been made for the
constitution of the Trusts and the manner in which the proceedings of the
Trusts and their Committees are to be conducted. Chapter IV of the Act deals
with the schemes which may be framed under the Act, which include general H
646 SUPREME COURT REPORTS [2002] SUPP. 2 S.C.R.

A improvement scheme or rebuilding scheme; street schemes and deferred street
schemes ; development and expansion schemes; housing accommodation
scheme ; re-housing scheme etc. Under Section 36 of the Act when a Scheme
is framed, the Trust shall prepare a notice stating the fact that the scheme has
been framed and prescribe the boundaries of the locality comprised in the
B scheme and furnish requisite particulars. Such a notice is required to be
published weekly for three consecutive weeks in the Official Gazette and in
a newspaper or newspapers with a statement of the period with in which
objections will be received. Under Section 38, during the thirty days next
following the first day on which any notice is published under Section 36 in
respect of any scheme under the Act, the Trust is required to serve a notice
C on every person, whom the Trust has reason to believe, to be the owner of
any immovable property which it is proposed to acquire in executing tile
scheme and the occupier of such premises. Under Section 41 the State
Government may sanction, either with or without modification, or may refuse
to sanction, or may return for reconsideration, any scheme submitted to it
under Section 40 of the Act. In case scheme is sanctioned by the State
D Government, Section 42 mandates the State Government to notify the sanction
of the scheme under the Act whereafter the Trust shall proceed to execute the
scheme in accordance with the provisions of the Act. A notification under
sub-section (I) of Section 42 in respect of any scheme is conclusive evidence
that the scheme has been duly framed and sanctioned. Chapter V deals with
E the powers and duties of the Trust where the scheme has been sanctioned.
Chapter VI deals with the acquisition proceedings and the application of the
Act to other authorities. Section 56 thereunder enables the State Government
to abandon the acquisition of land in certain cases on payment being made
of a sum to be fixed by the Trust. A Tribunal is constituted under Section 58
for the purpose of performing the functions of the Court in reference to the
F acquisition of land for the Trust under the Land Acquisition Act, 1894. Section
59 is of considerable significance and is, therefore, reproduced below :-

"59. Modification of the Land Acquisition Act, 1894 - For the purpose
of acquiring land under the Land Acquisition Act, 1894, for the trust
G (a) the tribunal shall (except for the purposes of section 54 of the
said Act) be deemed to be the Court, and the president of the
tribunal shall be deemed to be the Judge, under the said Act :

(b) the said Act shall be subject to the further modifications indicated
H in the Schedule to this Act;
NAGPUR IMPROVEMENT TRUST v. YASANTRAO (B.P. SINGH. J.] 647

(c) the president of the tribunal shall have power to summon and A
enforce the attendance of witnesses, and to compel the production
of documents by the same means and (so far as may by) in the
same manner as is provided. in the case of a Civil Court under
the Code of Civil Procedure, 1908 ; and
,.- (d) the award of a tribunal shall be deemed to be the award of the B
Court under the Land Acquisition Act, 1894, and shall be final".

The Schedule to the Act is also of considerable significance since it
seeks to modify the provisions of the Land Acquisition Act in its application
to acquisitions under the Punjab Act. Paragraph 2 of the Schedule reads as
under :- c
"2. Notification under section 4 and declaration under section 6 to be
replaced by notification under sections 36 and 42 of this Act. - (I)
The first publication of a notice of any improvement scheme under
section 36 of this Act shall be substituted for and have the same
effect as publication in the Official Gazette and in the locality of a D
notification under sub-section (I) of section 4 of the said Act, except
where a declaration under section 4 or section 6 of the said Act has
previously been made and is still in force.

(2) Subject to the provisions of clauses 10 and 11 of this Schedule,
the issue of a notice under sub-section 32 (I) of section in the case
E
of land acquired under that sub-section and in any other case the
publication of a notification under section 42 shall be substituted for
and have the same effect as a declaration by the State Government
under section 6 of the said Act, unless a declaration under the last
mentioned section has previously been made and is still in force". F
Various clauses of the schedule seek to amend sections 11, )5, 17, 18,
19, 20, 23, 24, 31 & 49 of the Land Acquisition Act. Two new provisions
have been inserted, namely Sections 24A and 48A. The rele\(11nt part of
paragraphs 6 and 10 of the schedule Which seek to add Sectio.~ 17-A and
,/
modify Section 23 of the Land Acquisition Act are as follows :- G
"6. Transfer of land to Trust - After section 17 of the said Act, the
following shall be deemed to be inserted, namely :-

17-A. In every case referred to in section 16 or section 17, the Collector
shall, upon payment of the cost of acquisition, make .over charge of H
648 SUPREME COURT REPORTS [2002) SUPP. 2 S.C.R.

A ihe liinato the trust, and the land shall thereupon vest in the trust
subject to the liability of the trust to pay any further costs which may
be incurred on account of its acquisition".

"10. Amendment of section 23. - (I) In clause first and clause sixthly
of sub-section (1) of section 23 of the said Act, for the words
B "publication of the declaration relating thereto under section 6" and
the w0rds "publication of the declaration under section 6", shall be
deemed to be substituted.

(a) if the land is being acquired under sub-section (3) of section 32
of this Act the words "issue of the notice under sub-section (3)
C of section 32 of the Punjab Town Improvement Act, 1922," a~d
(b) in any other case, the words "first publication of the notification
under section 36 of the Punjab Town Improvement Act, 1922".
(2) The fullstop at the end of sub-section (2) of section 23 of the said
Act shall be deemed to be changed to a colon and the following
D proviso shall be deemed to be added :-

Provided that this sub-section shall not apply to any land acquired
under the Punjab Town Improvement Act, 1922.",

Section 48A reads as under :-
E
" 48-A. Compensation to be awarded when land not acquired within
one year. - (!) If within a period of one year, from the date of the
publication of the declaration under section 6 in respect of any land,
the Collector has not made an award under section 11 with respect to
such land, the owner of the land shall, unless he has been to a material
F extent responsible for the delay, be entitled to receive compensation
for the damage suffered by him in consequence of the delay.

(2) The provision of part III of this Act shall apply, so far as it
-
may to the determination of the compensation payable under this
section."
G
The Nagpur Act, namely - the Nagpur Improvement Trust Act, 1936,
follows the same pattern. Chapter II of the Act deals with the Constitution of
the Trust and Chapter Ill deals with the proceedings of the Trust and the
Committees. Chapter IV deals with various improvement schemes
H contemplated by the Act. Section 26 provides that an improvement scheme
NAGPUR IMPROVEMENT TRUST v. VASANTRAO [B.P. SINGH, J.] 649

may provide for all or any of the matters provided therein which includes the A
acquisition by purchase, exchange, or otherwise of any property necessary
for or affected by the execution of the scheme; recovery of betterment
contributions; the re-laying out of any land comprised in the scheme, the
construction and re-construction of buildings; the provisions of parks, playing-
, fields and open spaces etc; sanitary arrangements required for the area;
reclamation or reservation of land for market, gardens, afforestation etc. etc. B
It also includes any matter for which, in the opinion of the State Government,
it is expedient to make provision with a view to the improvement of any area
in question or the general efficiency of the scheme. Various schemes have
been specified such as a general improvement scheme; a re-building scheme;
a re-housing scheme; a street scheme; a deferred street scheme; a house C
accommodation scheme etc. etc. Sections 36 to 4 7 prescribe the procedure to
be followed in framing an improvement scheme. Section 39 provides that
when any improvement scheme has been framed, the Trust shall prepare a
notice stating the fact that the scheme has been framed; the boundaries of the
area comprised in the scheme and such other particulars as are specified in
that section. Under Section 41, during the thirty days next following the first D
day on which any notice is published under Section 39 in respect of any
improvement scheme, the Trust shall serve a notice on every person whose
name appears in the Municipal assessment list of land as owner of any building
or land which it proposed to acquire in executing the scheme or in regard to
which it proposed to recover a betterment contripution. The notice shall state E
that the Trust propose to acquire such land or to recover such betterment
contribution for the purposes of carrying out an improvement scheme. The
notice shall call upon such person, if he dissents from such acquisition or
from the recovery of such betterment contribution, to state his reason in
writing within a period of sixty days from service of the notice. The objections
are, thereafter, to be considered under Section 43 within the period prescribed. F
The objectors are entitled to be heard in the matter if they so desire, whereafter
the Trust may either abandon the scheme or apply to the State Government
for sanction of the scheme with such modification, if any, as the Trust may
consider necessary. Thereafter the State Government may sanction either
with or without modification, or may refuse to sanction, or may return for G
reconsideration, any improvement scheme submitted to it under Section 43.
Section 45 provides that whenever the State Government sanctions an
improvement scheme, it shall announce the fact by notification and the Trust
shall forthwith proceed to execute the same. The publication of a notification
under sub-section (I) of Section 45 in respect of any scheme shall be conclusive
evidence that the scheme has been duly framed and sanctioned. Section 46 H
650 SUPREME COURT REPORTS (2002] SUPP. 2 S.C.R.

A authorises the Trust to alter any improvement scheme after the same has been
sanctioned subject to the previous sanction of the State Government, if
required. Chapter V of the Act lays down the powers and duties of the Trust
where a scheme has been sanctioned. Chapter YI deals with the acquisition
and disposal of land. Section 58 provides for acquisition by purchase, lease
B or exchange by the Trust pursuant to an agreement with the person concerned.
Section 59 reads as follows :-

"59. The Trust may, with the previous sanction of the State
Government acquire, land under the provisions of the Land Acquisition
Act, 1894, as modified by the provisions of this Act, for carrying out
any of the purposes of this Act."
c
Section 60 provides for the constitution of Tribunal for the purposes of
performing the functions of the Court in reference to the acquisition of land
for the Trust, under the Land Acquisition Act, 1894. Section 61 reads as
under :-
D "61. For the purpose of acquiring land under the Land Acquisition
Act, 1894, for the Trust, -

(a) the Tribunal shall except for the purposes of section 54 of that
Act, be deemed to be the Court, and the President of the Tribunal
shall be deemed to be the Judge thereunder ;
E
(b) the Act shall be subject to the further modifications as indicated
in the Schedule ;

(c) the President of the Tribunal may summon witnesses and enforce
their attendance and may compel the production of documents
F by the same means, and so far as may be, in the same manner,
as is provided in case of a Civil Court under the Code of Civil
Procedure, 1908 ; and
(d) the award of the Tribunal shall be deemed to be the award of the
Court under the Land Acquisition Act, 1894, and shall be final".
G It is not necessary to refer to other provisions of the Act. However, the
Schedule to the Act provides for fm1her modification of the Land Acquisition
Act, 1894. Clauses 2 and 3 of the Schedule are significant and they are
reproduced below:-

H "2. ( 1) The first publication of a notice of an improvement scheme
NAGPUR IMPROVEMENT TRUST v. VASANTRAO [B.P. SINGH. J.]651

under section 39 of the Nagpur Improvement Trust Act, 1936, shall A
be substituted for, and have the same effect as publication in the
official Gazette and in the locality of, a notification under sub-section
(I) of section 4, except where a declaration under section 4 or section
6 has previously been made and is still in force .
..
(2) Subject to the provisions of clauses I 0 and 11 of this Schedule, B
the issue of notice under sub-section (4) of section 32 of the Nagpur
Improvement Trust Act 1936, in the case of land acquired under that
sub-section, and in any other case the publication of a notification
under section 45 of the Nagpur Improvement Trust Act, 1936, shall
be substituted for, and have the same effect as a declaration by the C
• State Government under section 6, unless a declaration under the last
mentioned section has previously been made and is in force.

(3) The full stop at the end of section 11 shall be deemed to be
changed to a semi-colon, and the following shall be deemed to be
added, namely:- D
"and

(iv) the costs which, in his opinion, should be allowed to any person
who is found to be entitled to compensation, and who is not entitled
to receive the additional sum of fifteen per centum mentioned in sub- E
section (2) of section 23 as having been actually and reasonably
incurred by such person in preparing his claim and putting his case
before the Collector.

The Collector may disallow, wholly or in part, costs incurred by
any person, if he considers that the claim made by such person for p
compensation is extravagant."

The Schedule further amends Sections 15, 17, 18, I 9, 20, 23, 24 & 31
of the Land Acquisition Act. The schedule inserts two new provisions, namely
Section 24-A and Section 48-A. Section 17-A which has been added by
clause 6 of the Schedule reads as under:- G
"6. After section 17, the following section shall be deemed to be
inserted, namely :-

17-A. In every case referred to in section 16 or section 17, the Collector
shall, upon payment of the cost of acquisition, make over charge of H
652 SUPREME COURT REPORTS [2002] SUPP. 2 S.C.R.

A the land to the Trust and the land shall thereupon vest in the Trust,
subject to the liability of the Trust to pay any further costs which may
be incurred on account of its acquisition.''

Clause 10 of the schedule which effects several modifications in Section

B
23 of the Land A.cqui:&,jtion Act, modifies sub-section (2) thereof as follows:- .
-
"(2) The full stop at the end of sub-section (2) of section 23 shall be
deemed to be changed to a colon. and the following proviso shall be
deemed to be added :-

Provided that this sub-section shall not apply to any land acquired
C under the Nagpur Improvement Trust Act, 1936, except

(a) buildings in the actual occupation of the owner or occupied free
of rent by a relative of the owner, and land appurtenant thereto,
and
(b) gardens not let to tenants but used by the owners as a place of
D resort."

Similar is the scheme under the U.P. Act which has been noticed by
this Court in UP. Avas Evam Vikas Parishad v. Jainul Islam and Anr.,
[1998] 2 sec 467.

E It will thus be seen that the three State Acts follow the same pattern and
incorporate a common scheme. The provisions of the Land Acquisition Act
with certain modifications are made applicable to acquisitions made for
purposes of execution of the schemes under those Acts. There is also a
striking similarity between schedules to the Punjab and Nagpur Acts, and
F even though they may not be identical they are in pari materia. The schedule
to the U.P. Act is not as detailed but that is due to the fact that many of the
modifications in the Land Acquisition Act have been brought about by the
provisions of the Act itself. The schedule modifies sections 17, 23 and 49 of
the Land Acquisition Act, and adds a new section 17-A which is identical to
Section 17-A inserted in Punjab and Nagpur Acts. It also gives to the
G notifications under Section 28(1) and 32(1) of the U.P. Act, the same effect
as notifications published under Sections 4 and 6 respectively of the Land
Acquisition Act.

Mr. Rajinder Sachar, learned Senior Counsel appearing on behalf of
Jalandhar Improvement Trust in Civil Appeal No.9206 of 1995 submitted
H that a careful analysis of the scheme of the Punjab Act would disclose that
4

""' NAGPUR IMPROVEMENT TRUST v. VASANTRAO [B.P. SINGH, J.J 653

the scheme of the Punjab Act is quite different from the scheme of the Land A
Acquisition Act. Different equities arose under the two Acts and, therefore,
the High Cou1t was not j_ustified in holding that even in respect of the
acquisition under the Punjab Act, the claimants were entitled to the benefit
of beneficial provisions under the Land Acquisition Act as brought in by
amending the Land Acquisition Act by Act No. 68 of 1984. He sought to
distinguish the judgments relied upon by the respondents and submitted that B
having regard to the principle laid down by this Court in Maneklal Chhotalal
and Ors. v. MG. Makwana and Ors., (1967] 3 SCR 65 and State of Gujarat
v. Shanti/al Mangaldas and Ors., (1969] 1 SCC 509, it must be held that
compensation was not justiciable and since the two legislations were under
two different entries of the Constitution, Article 14 could not be invoked. c
Mr. Rakesh Dwivedi, Senior Advocate, appearing on behalf of the
Nagpur Improvement Trust in C.A~ Nos. 1164-1200 of 1993 and the Uttar
Pradesh Avas Evam Vikas Parishad in Civil Appeal No.839 of 1995 submitted
that the provisions of the Nagpur and the U.P. Act and the modifications
brought about by these Acts leave no room for doubt that the provisions of D
the Land Acquisition Act stood incorporated by legislation in the State Acts
""""('
and, therefore, it cannot be said, that the legislature intended that subsequent
amendments in the Land Acquisition Act, 1894 should apply to an acquisition
under the said Act. He further submitted that this Court in Bhatinda
Improvement Trust v. Ba/want Singh and Ors., (1991] 4 SCC 368 over-
looked a judgment of this Court in State of Kera/a and Ors v. T.M. Peter and
E
Ors., [ 1980] 3 SCC 554 and erroneously came to the conclusion that there
was no question of incorporation of any of the provisions of the Land
Acquisition Act into the Punjab Act. A perusal of the provisions of the
Nagpur Act would show that the provisions of the Land Acquisition Act,
1894 as it stood in 1936 stand incorporated by reference in the 1936 Act F
subject to the modifications indicated therein. The Nagpur Act is a complete
and exhaustive code enacted with the object of providing for improvement
., and expansion of the town of Nagpur. The Act also contemplates under
Section 58 acquisition by agreement while Sections 59 to 68 deal with
compulsory acquisition under the provisions of the Land Acquisition Act as
modified by the provisions of the Nagpur Act. The Nagpur Act has its own
G
exhaustive mechanism and procedure for acquisition of land and further it
""1 adopts provisions of Land Acquisition Act, 1894 as it stood in 1936 with
--< specific, numerous, and detailed modifications which make out a clear case
of incorporation of Land Acquisition Act, 1894 as it then stood with
modifications. He further contended that it cannot be that the legislature H
654 SUPREME COURT REPORTS [2002] SUPP. 2 S.C.R.

A intended that subsequent amendments in the Land Acquisition Act, 1894
should automatically apply to the Nagpur Act.

So far as the U.P. Act is concerned, Shri Dwivedi submitted that having
regard to the scheme of the Act and the modifications to the Land Acquisition
Act, 1894, it was also a case of incorporation of the provisions of the Land
B Acquisition Act, 1894 as amended in its application to the State of U.P.
subject to the modifications contained in the Schedule to the Adhiniyam. A
separate exhaustive code exists for acquisition under the Adhiniyam. He,
however, submitted that while applying Article 14, the nature of the provision
of the enactment under consideration becomes important. Mere absence of a
C limitation of time period for issuance of a declaration under Section 6 would
not imply a breach of Article 14 and for this he relied upon the judgment of
this Court in State of Kera/a and Ors. v. T.M. Peter and Ors., (supra). He
further submitted that the provisions pertaining to compensation would be
different from the provisions pertaining to the time limit for notifying sanction
of the draft scheme. The latter would be a procedural provision which may,
D indirectly, impact compensation by increasing or decreasing it depending
upon the market situation. Therefore, the cases of this court pertaining to
compensation being equal to the compensation paid under the Land Acquisition
Act in view of Article 14 of the Constitution of India, would have no
applicability for invoking the proviso to Section 6 of the Land Acquisition
E Act in respect of the scheme under the Nagpur Act and consequently the
principles laid down by this Court in Nagpur fmrovement Trust and Anr. v.
Vithal Rao and Ors., (supra) would not be attracted. He, therefore challenged
the correctness of the impugned judgment and order of the High Court of
Bombay, Nagpur Bench, Nagpur holding that the proviso to Section 6 applies
to acquisition made under the Nagpur Act, 1936 and supported the judgment
F of the Allahabad High Court holding that the said proviso has no application
to- the acquisition made under the U.P. Act.

Mr. V.A. Mohta, Senior Advocate, appearing on behalf of the
respondents, in C.A. Nos. 1164-1200 of 1993 and appellants in C.A. No. 839
of 1995 relating to the acquisitions made under the Nagpur Act and the U.P.
G Act submitted that the questions which arise in these matters are :-

(I) Whether the provisions of the Land Acquisition Act, as modified,
stand incorporated in the said Acts?
(2) Whether the decision of this Court in Nagpur Improvement Trust
H v. Vithal Rao (supra) is confined to cases of grant of compensation
NAGPUR IMPROVEMENT TRUST v. VASANTRAO [B.P. SINGH, J.] 655

or whether the said principle would also apply to the issuance of A
Notifications under Sections 4 and 6 of the Land Acquisition
Act? and

(3) If it is held that the provisions ofthe Land Acquisition Act stand
incorporated whether it would not fall within any of the four
exceptions enunciated in The State of Madhya Pradesh v. M. V B
Narasimhan, [197.5] 2 SCC 377?

On the first question he relied upon the opinion of Sahai, J in Gauri
Shankar Gaur and Ors. v. State of UP. and Ors., [1994] 1 SCC 92 but
conceded that the said view h:is not been approved by this Court by a larger
Bench in UP. Avas Evam Vikas Parishad v. Jainul Islam and Anr., [1998] C
2 SCC 467. He pointed out that even though the Nagpur Improvement Trust
v. Vithal Rao, (supra) dealt with a matter which was confined to the question
of compensation, the same principle should apply to cases where the
application of proviso to Section 6 of the Land Acquisition Act is involved.
Lastly he contended that this Court must hold that the provisions of the State D
Acts were supplemental in nature and are, therefore, covered by the first
exception enunciated in State of Madhya Pradesh v. M. V Narasimhan :
[J 975J 2 sec 377.

Shri K.C. Jain appearing on behalf of the respondents in C.A. No.1166
of 1993, an appeal preferred by the Nagpur Improvement Trust, submitted E
that Section 59 as well as Section 6l(b) of the Nagpur Act simply cites/refers
to the Land Acquisition Act and does not incorporate it referentially. Hence
all the amendments made to the Land Acquisition Act must apply
automatically. In the alternative he submitted 'that even if it is assumed that
the aforesaid provisions incorporate the Land Acquisition Act as it then existed F
in the year 1936, it falls in exceptional situations carved out by this Court,
namely that it is supplemental to the Land Acquisition Act and, therefore,
incidences of incorporation shall not follow. He supported the reasoning in
Jainul Islam's case (supra) and submitted that not applying the amendment
leads to unconstitutionality of the Act. He distinguished the decisions of this
Court in Prakash Amichand Shah v. State ofGuiarat and Ors., [ 1986) 1 SCC G
581 and State of Gujarat v. Shanti/a/ Mangaldas and Ors., (supra) and
submitted that those decisions relate to Bombay Town Planning Act and were
distinguishable. So far as the instant controversy is concerned, according to
him, it stands clearly covered by the decision of this Court in Nagpur
Improvement Trust v. Vitha/ Rao, (supra).
H
656 SUPREME COURT REPORTS [2002] SUPP. 2 S.C.R.

A Mr. N.N. Goswami, learned Senior counsel appearing on behalf of the
respondents in C.A. No.9212 of 1995 supported the impugned judgment of
the High Court of Punjab and Haryana awarding solatium and interest under
the beneficial provisions of the Land Acquisition Act as amended in the year
1984. He relied upon the decision of this Court in Nagpur Improvement Trust
B v. Vithal Rao, (supra) and submitted that the provisions of the Punjab Act
will have to be struck down as discriminatory if the claimants are not given
benefit of the beneficial provisions of the Land Acquisition Act as amended
in the year 1984. He further submitted that the provisions of the Punjab Act
also provide for payment of solatium and there is no reason why interest
should not be granted to the claimants who would otherwise be granted such
C interest under the provisions of the Land Acquisition Act, as amended.

Counsel appearing in the other matters have adopted the submissions
advanced by the learned Senior counsel whose submissions we have noticed
above.

D Numerous decisions have been cited before us by learned counsel
appearing for the parties. We do not consider it necessary to refer to all of
them because several authorities have been cited for the same proposition.
Moreover some of the issues involved appear to be clearly covered by a
decision of this Court rendered by a Bench comprising of three judges which
E is a binding precedent. However, we shall notice such of them as appear
relevant for decision of the appeals and special leave petitions before us.

At the outset we may dispose of Civil Appeal Nos. 6590 to 6592 of
200 I. This Court by its order dated September 19, 200 I has already upheld
the contention of the appellants that they are entitled to interest on the amount
F envisaged in Section 23(2) of the Land Acquisition Act. In these three appeals,
therefore, the sole question that survives for consideration is whether the
appellants whose lands have been acquired under the Land Acquisition Act
are also entitled to interest on the sum payable under sub-section (1-A) of
Section 23 of tile Land Acquisition Act, 1894. The High Court by its impugned
judgment and order following the earlier decision of this Court in Prem Nath
G Kapur and Anr. v. National Fertilizers Corporation of India Limited and
Ors., [1996] 2 SCC 71, dismissed the writ petitions preferred by the appellants
holding them to be not entitled to interest on the sum payable under Section
23(1-A) of the Land Acquisition Act. The matter was reconsidered by a
Larger bench of this Court and the question now stands concluded by an
H authoritative pronouncement of this Court in Sunder v. Union of India., [2001]
NAGPUR IMPROVEMENT TRUST v. VASANTRAO (B.p. SINGH, J.) 657

7 sec 211 holding that the claimant is entitled to interest on the amount of A
compensation worked out in accordance with the provisions of Section 23 of
the Land Acquisition Act including all the sub-sections thereof, meaning
thereby sub-sections ( 1), ( 1-A) and (2) of Section 23. This Court held:-

"No judicial exercise is required to quantify the sums mentioned in
sub-section ( 1-A) or sub-section (2) because the section itself specifies B
the percentage to be worked out for the purpose of adding to the total
amount arrived at under sub-section (I). Otherwise Section 26 is not
intended to show that the compensation awarded would be bereft of
the additional amount and the solatium envisaged under sub-section
(I-A) or sub-section (2). This can be. clearly discerned from the C
commencing words of Section 26 itself. They are: "Every award
under this Part shall be in writing signed by the Judge". What is
referred to therein is Part III of the Act which comprises of a fasciculus
of twelve provisions starting with Section 18 and ending with Section
28-A of the Act. There can be no doubt that all the three heads
specified in the three sub-sections in Section 23 are the sums to be D
"awarded by the court". Hence the words "every award under th is
Part" cannot be treated as the award after delinking the amounts
awarded under sub-section (1-A) or sub-section (2) of Section 23 .

• * • *
E
The remaining sub-sections in that prov1s1on only deal with the
contingencies in which the Collector has to deposit the amount instead
of paying it to the party concerned. It is the legal obligation of the
Collector to pay "the compensation awarded by him" to the party
entitled thereto. We make it clear that the compensation awarded
would include not only the total sum arrived at as per sub-section (1) F
of Section 23 but the remaining sub-sections thereof as well. It is thus
clear from Section 34 that the expression "awarded amount" would
mean the amount of compensation worked out in accordance with the
provisions contained in Section 23, including all the sub-sections
thereof'.
G
These appeals (Civil Appeal Nos. 6590 to 6592 of2001) deserve to be
allowed and the impugned judgments and orders of the High Court set aside,
and the respondents directed to compute and pay the interest payable to the
appellants in accordance with law as enunciated in Sunder v. Union of India
~~ H
658 SUPREME COURT REPORTS (2002] SUPP. 2 S.C.R.

A We shall now proceed to consider whether the provisions of the Land
Acquisition Act, 1894 as modified by the State Acts stand incorporated in the
State Acts or whether there is a mere reference or citation of the land
Acquisition Act in the State Acts. The law on the subject is well settled.
When an earlier Act or certain of its provisions are incorporated by reference
B into a later Act, the provisions so incorporated become part and parcel of the
....
later Act as if they had been bodily transposed into it. The incorporation of
an earlier Act into a later Act is a legislative device adopted for the sake of
convenience in order to avoid verbatim reproduction of the provisions of the
earlier Act into the later. But this must be distinguished from a referential
legislation which merely contains a reference or the citation of the provisions
C of an earlier statute. In a case where a statute is incorporated, by reference,
into a second statute, the repeal of the first statute by a third does not affect
the second. The later Act alongwith the incorporated provisions of the earlier
Act constitute an independent legislation which is not modified or repealed
by a modification or repeal of the earlier Act. However, where in later Act
there is a mere reference to an earlier Act, the modification, repeal or
D amendment of the statute that is referred, will also have an effect on the
statute in which it is referred. It is equally well settled that the question
whether a former statute is merely referred to or cited in a later statute, or
whether it is wholly or partially incorporated therein, is a question of
construction.
E
In Secretary of State v. Hindustan Cooperative Insurance Society Ltd.,
AIR (1931) PC 149, the Privy Council observed:-

"In this country it is accepted that where a statute is incorporated by
reference into a second statute, the repeal of the first statute does not
F affect the second: see the cases collected in "Craies on Statute law,"
Edn.3, pp. 349-50. This doctrine finds expression in a common-form
section which regularly appears in the Amending and Repealing Acts
which are passed from time to time in India. The section runs,
The repeal by this Act of any enactment shall not affect any
G Act... in which such enactment has been applied, incorporated or
referred to."
The independent existence of the two Acts is therefore recognized;
despite the death of the parent Act, its offspring survives in the
incorporating Act. Though no such saving clause appears in the
H General Clauses Act, their Lordships think that the principle involved
NAGPUR IMPROVEMENT TRUST v. VASANTRAO [B.P. SINGH, J.] 659

is as applicable in India as it is in this country. A
It seems to be no less logical to hold that where certain provisions
from an existing Act have been inc6rporated into a subsequent Act,
no addition to the former Act, which is not expressly made applicable
to the subsequent Act, can be deemed to be incorporated in it, at all
events if it is possible for the subsequent Act to function effectually B
without the addition."

In Re: Wood's Estate, Ex parte, Works and Buildings Commrs., (I 886)
31 Ch D 607 at page 6 I 5 Lord Esher, M.R. observed :-

"If a subsequent Act brings into itself by reference some of the clauses C
of a former Act, the legal effect of that, as has often been held, is to
write those sections intQ the new Act as if they had been actually
written in it with the pen, or printed in it."

In UP. Avas Evam Vikas Parishad v. Jainul Islam and Anr., (supra)
this Court observed :- D
"17. A subsequent legislation often makes a refe~ence to the earlier
legislation so as to make the provisions of the earlier legislation
applicable to matters covered by the later legislation. Such a legislation
may either be (i) a referential legislation which merely contains a E
reference to or the citation of the provisions of the earlier statute; or
(ii) a legislation by incorporation whereunder the provisions of the
earlier legislation to which reference is made are incorporated into
the later legislation by reference. If it is a referential legislation the
provisions of the earlier legislation to which reference is made in the
subsequent legislation would be applicable as it stands on the date of F
application of such earlier legislation to matters referred to in the
subsequent legislation. In other words, any amendment made in the
earlier legislation after the date of enactment of the subsequent
legislation would also be applicable. But if it is a legislation by
incorporation the rule of construction is that repeal of the earlier G
statute which is incorporated does not affect operation of the
subsequent statute in which it has been incorporated. So also any
amendment in the statute which has been so incorporated that is
made after the date of incorporation of such statute does not affect
the subsequent statute in which it is incorporated and the provisions
of the statute which have been incorporated would remain the same H
660 SUPREME COURT REPORTS [2002] SUPP. 2 S.C.R

A as they were at the time of incorporation and the subsequent
amendments are not to be read in the subsequent legislation."

This is a reiteration of the principle as laid down by earlier judgments
of this Court in a catena of decisions including Mary Roy v. State of Kera/a,
[1986] 2 SCC 209; Ramsarup v. Munshi, AIR (1963) SC 553; Ram Kripa/
B Bhagat v. State of Bihar, AIR (1970) SC 951; Boiani Ores ltd v. State of
Orissa, AIR ( 1975) SC 17 and Mahindra and Mahindra Ltd v. Union of
India, AIR (1979) SC 798.

It is also well settled that the question as to whether a particular
C legislation falls in the category of referential legislation or legislation by
incorporation depends upon the language used in the statute in which reference
is made to the earlier decision and other relevant circumstances.

In Bhalinda Improvement Trust v. Ba/want Singh and Ors., (supra) a
question arose regarding the applicability of the first proviso of Section 6(1)
D of the Land Acquisition Act, 1894 as substituted by Act 68 of 1984 to an
improvement scheme under the Punjab Act providing for acquisition of the
land under the Land Acquisition Act In that case the first notice published
under Section 36(2) of the Punjab Act in May, 1977 was followed by a
Notification under Section 42 published in June, 1980 sanctioning the scheme.
Since the notice under Section 42 was issued after the expiry of the period
E of three years from the date of the publication of the Notification under
Section 36(2) of the Punjab Act, it was con,.:nded that the acquisition
proceeding lapsed. Upholding the contention the Court held that the first
proviso to Section 6(1) of the Land Acquisition Act was applicable since
there was no question of incorporation of any of the provisions of the Land
F Acquisition Act into the Punjab Act This Court observed that the Punjab Act
did not deal with acquisition of land for the purposes of a scheme as
contemplated thereunder. The acquisition of such land for the purposes of the
scheme is left to the general law of the land, namely the Land Acquisition
Act which has to be resorted to for the acquisition of land for the purposes
G of the schemes contemplated under the Punjab Act The only difference is
that some of the provisions of the Land Acquisition Act, as referred to in the
relevant sections of the Punjab Act, are given effect to as amended by the
relevant sections of the Punjab Act In these circumstances, it cannot be held
that any provisions of the Land Acquisition Act have been incorporated into
the Punjab Act and, therefore, the provisions of the Land Acquisition Act, as
H they stood at the time of acquisition, would be applicable in the absence of
NAGPUR IMPROVEMENT TRUST v. VASANTRAO (B.P. SINGH. J.] 661

any contrary intention. The judgment was rendered by a bench of two Judges A
of this Court. The same question again arose in Gauri Shankar Gour and
Ors. v. State of U. P. and Ors., (supra) in the context of the provisions of the
U.P. Act. A two Judge Bench of this Court upheld the validity of the acquisition
_. but the learned judges recorded different reasons for coming to the same
conclusion. After referring to a large number of decisions of this Court B
Raniaswami, J. recorded his conclusion in the following words:-

"33. Section 55 of the Act read with the schedule made an express
incorporation of the provisions of Section 4 (I) and Section 6 as
modified and incorporated in the schedule. The schedule effected
necessary structural amendments to Sections 4, 6, 17 and 23 C
incorporating therein the procedure and principles with necessary
modifications. Sections 28(2) and 32( I) prescribe procedure for
publication of the notifications under Sections 28(1) and 32(1) of the
Act without prescribing any limitation. It is a complete code in itself.
The Act is not wholly unworkable or ineffectual though may be

- incompatible with provisos to Section 6(1) of the Land Acquisition
Act. The U.P. Legislature did not visualize that later amendment to
Central Act I of I894 i.e. Land Acquisition Act would be automatically
D

extended. We have, therefore, no hesitation to conclude that Section
55 and the schedule adapted only by incorporation Sections 4(1) and
6(1) and the subsequent amendments to Section 6 did not become E
part of the Act and they have no effect on the operation of the
provisions of the Act."

On the other hand Sahai, J. held that the language of Section 55 of the
U.P. Act indicated that the legislature intended to take proceedings for
acquisition of land under the Land Acquisition Act except to the extent it has F
been amended by the schedule. Notice published in the official gazette under
Section 28 and clause (a) of sub-section (3) of Section 31 have been given
the same effect as a notification issued under Section 4 of the Land Acquisition
Act. Similarly notices issued under clause (c) of sub-section (3) of Section
23 of the Act or publication of a notification under sub-section (I) or under
sub-section (4) of Section 32 of the Act have been substituted for and have G
the same effect as declaration under Section 6 of the Land Acquisition Act.
In other words the notices issued under the Act under different sections
mentioned in it shall be substituted in place of Sections 4 and 6 of the Land
Acquisition Act. The learned Judge concluded that this did not amount to
bringing into effect a new legislation nor transposing provisions of Land H
662 SUPREME COURT REPORTS [2002] SUPP. 2 S.C.R.

A Acquisition Act to the U.P. Act as modified to proceedings under the U.P.
Act. Even so, the learned Judge observed that though the law was in favour
of the petitioners but equity stood in their way since in pursuance of the
proceedings the Parishad had entered into possession and constructed housing
colonies in the absence of any interim order. Therefore. the individual interest
B of the land owners was faced with public interest of those large number of
middle class persons who must have invested their life's savings in purchasing
these houses and hence the demolition of houses which are standing over the
land and rendering its occupants homeless shall result in incalculable loss
and injury. Larger social interest, therefore, required this Court to mould the
relief in such manner that justice may not suffer. Since the issuance of the
C notifications under Section 4 and Section 6 were not flawed, and the infirmity
arose due to procedural delay, the principle that delay destroys the remedy
but not the right, were applicable. The Parishad could have acquired the land
by issuing fresh notification. In these circumstances the equity could be
adjusted by directing that the compensatio.n to the land owners shall be paid
by assuming that fresh proceedings for acquisition were taken in the year in
D which declaration was issued. We may observe that in reaching the conclusion
that this was not a case of incorporation of the provisions of the Land
Acquisition Act into the U.P. Act, Sahai, J. relied upon the decision of this
Court in Bhatinda Improvement Trust v. Ba/want Singh and Ors., (supra). It
would thus appear that for different reasons the learned Judges came to the
E same conclusion and accordingly dismissed the appeals and the writ petitions.

The same question again arose for consideration in UP. Avas Evam
Vikas Parishad v. Jainul Islam and Anr., (supra). In view of the difference
of opinion between the learned Judges in Gauri Shankar Gaur and others v. 11 ,
State of UP. and Ors., (supra) regarding the applicability of the 1984 Act t<' ' •
F acquisition for purposes of U.P. Act, the matter was directed to be he.1•d by
a Bench of three Judges. The appellant Parishad placed reliance <' the
judgment of Ramaswami, J. while the respondents strongly placed n · ance
on the judgment ofSahai, J. in Gauri Shankar Gaur and Ors. v. State l, UP.
and Ors., (supra).

G This Court in UP. Avas Evam Vikas Parishad v. Jainul Islam ano 4nr.,
(supra) noticed the scheme of the U.P. Act and. observed that Section . 5 of
the U.P. Act makes a reference to the provisions of the Land Acquisition Act,
as amended, in its application to Uttar Pradesh, and has laid down that any
land or any interest therein required by the Parishad for any of the purposes
H of the Adhiniyam may be acquired under the provisions of the Land
NAGPUR IMPROVEMENT TRUST v. VASANTRAO [B.P. SINGH, J.J 663

Acquisition Act, as amended, in its application to the State of Uttar Pradesh, A
which for this purpose has to be subject to the modifications specified in the
schedule to the U.P. Act. Similar provisions are found in other enactments
and reference was made to the Calcutta Improvement Act, 1911 whereunder
the Board of Trustees of the Calcutta Improvement Trust was entrusted with
very wide powers for the purpose of carrying out improvement schemes B
within the municipal limits of Calcutta. After noticing the provisions of the
Calcutta Improvement Act, 1911, this Court noticed the judgment of the
Privy Council in Secretaiy ofState v. Hindustan Cooperative Insurance Society
Ltd. (supra) in which the question arose - whether the amendment in the Land
Acquisition Act was applicable so as to confer a right of appeal to the Privy
Council against the judgment of the High Court in an appeal from the Tribunal. C
The said question was answered in the negative by the Privy Council. This
Court quoted the following passages appearing in Secretary of State v.
Hindustan Cooperative Insurance Society Ltd., (supra),

"The modifications are contained partly in the body of the Act
and partly in a schedule attached to the Act. They are numerous and D
substantial and the effect is, in their Lordship's opinion to enact for
the purposes of the local Act a special law for the acquisition of land
by the trustees within the limited area over which their powers extend.

* * * * * E
Their Lordships regard the local Act as doing nothing more than
incorporating certain provisions from an existing Act, and for
convenience of drafting doing so by reference to that Act, instead of
setting out for itself at length the provisions which it was desired to
adopt."
F
The Privy Council in the aforesaid judgment also made the following
observations :-

"But their Lordships think that there are other and perhaps more
cogent objections to this contention of the Secretary of State, and G
their Lordships are not prepared to hold that the sub-section in question,
which was not enacted till 1921, can be regarded as incorporated in
the local Act of 1911. It was not part of the Land Acquisition Act
when the local Act was passed, nor in adopting the provisions of the
Land Acquisition Act is there anything to suggest that the Bengal
Legislature intended to bind themselves to any future additions which H
664 SUPREME COURT REPORTS (2002] SUPP. 2 S.C.R.

A might be made to that Act. It is at least conceivable that new provisions
might have been added to the Land Acquisition Act which would be
whoily unsuitable to the local code. Nor, again, does Act 19of1921
contain any provision that the amendments enacted by it are to be
treated as in any way retrospective, or are to be regarded as affecting ·~-
. ·'
any other enactment than the Land Acquisition Act itself."
B
This Court observed that Section 55 read with the schedule to the U.P.
Act are on the same lines as those contained in the Calcutta Improvement
Act, 1911 and, therefore, the principles laid down by the Privy Council in
that case were equally applicable to the case in hand. This Court, therefore,
C concluded that the provisions of the Land Acquisition Act, as amended, in its
application to U.P. with the modifications specified in the schedule to the
Adhiniyam, have, therefore, to be treated to have been incorporated by
reference into the Adhiniyam and became an integral part of the Adhiniyam
and the said provisions would remain unaffected by subsequent repeal or
amendment of the Land Acquisition Act unless any of the exceptional situations
D indicated in The State of Madhya Pradesh v. M V Narasimhan (supra) were
attracted. This Court did not agree with the view of Sahai, J. and approved
the view of Ramaswami, J. in Gauri Shankar Gaur and Ors. v. State of U.P.
and Ors., (supra). This Court also considered the judgment in The State of
Madhya Pradesh v. M V. Narasimhan, (supra) which enumerated four
E exceptions to the rule that the incorporated provisions of the previous Act
which have become integral and independent part of the subsequent Act are
totally unaffected by any repeal or amendment in the previous Act. The
exceptions enumerated are :-

"(a) Where the subsequent Act and the previous Act are supplemental
F to each other;
(b) where the two Acts are in pari materia;
(c) where the amendment in the previous Act, if not imported into
the subsequent Act also, would render the subsequent Act wholly
unworkable and ineffectual; and
G
(d) where the amendment of the previous Act, either expressly or by
necessary intendment, applies the said provisions to the subsequent
Act."

It was held that the U.P. Act and the Land Acquisition Act could not
H be regarded as supplemental to each other. The U.P. Act contains provisions
NAGPUR IMPROVEMENT TRUST v. VASANTRAO [B.P. SINGH. J.] 665

regarding acquisition of land which are complete and self-contained. Nor can A
the provisions in the U.P. Act be said to be in pari materia with the Land
Acquisition Act because the U.P. Act also dealt with matters which did not
fall within the ambit of the Land Acquisition Act. It could not also be said
that the 1984 Act, expressly or by necessary intendment applied the said
amendments to the U.P. Act. The Court then posed the question "Can it be B
said that if the amendments made in the Land Acquisition Act by the 1984
Act are not incorporated in the Adhiniyam, it would be rendered unworkable?

-· The Court observed that Sahai, J. had expressed the view that the exceptional
situations referred to in The State of Madhya Pradesh v. M. V Narasimhan
(~upra) can be extended further in our constitutional set-up, and that the
courts should lean against the construction which may result in discrimination. C
Relying upon the judgment of this Court in Nagpur Improvement Trust
and Anr. v. Vithal Rao and Ors., (supra) it was contended in U.P. Avas Evam
Vikas Parishad v. Jainul Islam and Anr., (supra) by the land owners that if
the provisions of the Land Acquisition Act as they stood on the date of
enactment of the U.P. Act without the amendments introduced by the 1984 D
Act relating to determination and payment of compensation, are held to be
incorporated in the U.P. Act, the provisions of the U.P. Act incorporating the
provisions of the Land Acquisition Act would be rendered unconstitutional
as being violative of Article 14 of the Constitution. On the other hand the
Parishad contended that it was not open to the claimants to raise the question E
regarding constitutional validity of the provisions of the U.P. Act under which
the reference had been made. Further it was contended that the Land
Acquisition Act was enacted by Parliament while the U.P. was enacted by the
State Legislature and, therefore, Article 14 cannot be invoked since the alleged
discrimination arises on the basis of laws made by two different legislative
bodies. In any event, it was contended, that merely because under the F
provisions of the Land Acquisition Act, as modified by the schedule to the
U.P. Act, which are applicable in the matter of acquisition of land for the
purposes of the U.P. Act, solatium is payable @ 15% and not @ 30% and
interest is payable @ 6% and not 9% and 5%, as provided in the Land
Acquisition Act, as amended by the 1984 Act, would not render the acquisition G
proceedings taken under the U.P. Act to be unconstitutional.

This Court after considering the submissions urged before it held that
even if the claimants could not challenge the validity of the provisions of the
law under which the reference had been made, while construing the provisions
of the U.P. Act, one cannot lose sight of the settled principle of statutory H
I I

666 SUPREME COURT REPORTS [2002] SUPP. 2 S.CR.

A construction that "if certain provisions of law, construed in one way, would
make them consistent with the Constitution and another interpretation would
render them unconstitutional, the Court would lean in favour of the fonner
construction''. (See Kedar Nath Singh v. State of Bihar, AIR (1962) SC 955.
This Court, therefore, proceeded to consider whether the provisions of the
B U.P. Act, if they are so construed as to incorporate the provisions of the Land
Acquisition Act as they stood on the date of enactment of the U.P. Act
without the amendments introduced in the Land Acquisition Act by the 1984
Act relating to detenn ination and payment of compensation, would be violative
of the provisions of Article 14 of the Constitution. The Court noticed the
difference in the compensation that ,may be payable if the acquisition took
C place under the U.P. Act and if the acquisition took place under the Land
Acquisition Act, as amended. The compensation payable to the owner whose
land is acquired for the purposes of the U.P. Act would be less than the
compensation payable to the owner whose land is acquired under the Land
Acquisition Act, as amended by the I 984 Act. After considering the decision
in Nagpur Improvement Trust and Anr. v. Vitlia/ Rao and Ors., (supra) this
D Court held that the reasons which weighed with this Court in Nagpur
Improvement Trust and Anr. v. Vithal Rao and Ors., (supra) in striking down
the provisions of the Nagpur Improvement Trust Act whereby Section 23 of
the earlier Act had been modified in its application for the purposes of
application to the said Act, would equally apply while construing the
E constitutional validity of the U.P. Act wherein the provisions of Section 23
of the Land Acquisition Act have been modified under the schedule to the
U.P. Act. This Court found that the provisions of the U.P. Act are very
similar to those contained in the Nagpur Improvement Trust Act. Section 55
of the U.P. Act is similar to Section 59 of the Nagpur Improvement Trust Act
inasmuch as both the provisions provide for modification being made in the
F Land Acquisition Act. Section I 7-A that has been inserted in the Land
Acquisition Act by the modification made in the U.P. Act is in same terms
as 17-A which has been inserted by paragraph 6 of the schedule to the
Nagpur Act. Finding such similarity in the provisions of the two State Acts,
this Court held that the reasons which weighed with this Court in striking
G down the provisions of the Nagpur Act would equally apply in the case of
U.P. Act. In this connection this Court relied upon the following passage
from the judgment in Nagpur Improvement Trust and Anr. v. Vithal Rao and
Ors., (supra) :-

"Article 14 confers an individual right and in order to justify a
H classification there should be something which justifies a different
NAGPUR IMPROVEMENT TRUST v. VASANTRAO [B.P. SINGH, J.] 667

treatment to this individual right. It seems to us that ordinarily. a A
classification based on the public purpose is not permissible under
Article 14 for the purpose of determining 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 B
made on the basis of the authority acquiring the land? In other words
can different principles of compensation be laid ifthe 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. C
* • *
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 enables the State to give one owner different treatment from D
another equally situated the owner who is discriminated against, can
claim the protection of article 14."

This Court also considered the judgment in Prakash Amichand Shah v.
State of Gujarat and Ors., (supra) and distinguished the same finding that the
provisions of Section 53 of the Bombay Town Planning Act, 1954 were not E
akin to the acquisition proceedings under the Land Acquisition Act, and the
provisions of the Land Acquisition Act were not applicable, with or without
modifications, as in the case _of Nagpur Improvement Trust Act. Section 53
of the Bombay Town Planning Act was comparable with the provisions
• contained in Sections 38 and 39 of the U.P. Act which provided for vesting
of certain public lands vested in the local authority or private street or square F
and payment of compensation for such lands. The case of Prakash Amichand
Shah v. State of Gujarat and Ors., (supra) was, therefore, distinguished.

Having considered all aspects of the matter, this Court recorded its
conclusion in the following words :-
G
"31. Since the present case involves acquisition of land under the
provisions of the LA Act as applicable under the Adhiniyqm, it is
fully covered by the law laid down by this court in Nagpur
Improvement Trust. Keeping in view the principles laid down in the
said decision of this Court, it has to be held that if the provisions of H
668 SUPREME COURT REPORTS (2002] SUPP. 2 S.C.R.

A the Adhiniyam are so construed as to mean that the provisions of the
LA Act, as they stood on the date of enactment of the Adhiniyam,
would be applicable to acquisition of land for the purpose of the
Adhiniyam and that the amendments introduced in the LA Act by the
1984 Act relating to determination and payment of compensation are
not applicable, the consequence would be that the provisions of the
B LA Act, as applicable under the Adhiniyam, would suffer from the
vice of arbitrary and hostile discrimination. Such a consequence would
be avoided if the provisions of the Adhiniyam are construed to mean
that the provisions of the LA Act, as amended by the 1984 Act,
relating to determination and payment of compensation would apply
c to acquisition of land for the purposes of the Adhiniyam. There is
nothing in the Adhiniyam which precludes adopting the latter
construction. On the other hand, the provisions of the Adhiniyam
show that the intention of the legislature, while enacting the
Adhiniyam, was to confer the benefit of solatium @ 15% by modifying
Section 23 (2) in the Schedule, which benefit was not available under
D the provisions of the LA Act as it was applicable in the State of Uttar
Pradesh at the time of enactment of the Adhiniyam. It cannot, therefore,
be said that the intention of the legislature, in enacting the Adhiniyam, ,.
was to deny to the landowners the benefits relating to determination
and payment of compensation which would be available to them
E under any amendment made in the LA Act after the enactment of the
Adhiniyam. We are, therefore, of the opinion that on a proper
construction of Section 55 of the Adhiniyam it must be held that
while incorporating the provisions of the. LA Act in the Adhiniyam
the intention of the legislature was that amendments in the LA Act
relating to determination and payment of compensation would be
F applicable to acquisition of lands for the purposes of the Adhiniyam.
Th is means that the amendments introduced in the LA Act by the
1984 Act relating to determination and payment of compensation,
viz., Section 23(1-A) and Section 23(2) ~nd 28 as amended by the
1984 Act would be applicable to acquisitions for the purposes of the
G Adhiniyam under section 55 of the Adhiniyam."

So far as the U.P. Act is concerned the judgment in UP. Avas Evam
Vikas Parishad v. Jainul Islam and Anr., (supra) answers all the questions
raised before us. It has been held that so far as the U.P. Act is concerned, the
Land Acquisition Act, as modified, stands incorporated in the U.P. Act.
H However, as a matter of construction it was held that Section 55 of the U.P.
NAGPUR IMPROVEMENT TR_UST v. VASANTRAO [B.P. SINGH, J.]669

Act, while incorporating the provisions of the Land Acquisition Act intended A
to apply to acquisition made under the U.P. Act the beneficial amendments
that may be brought about for determination and payment of compensation,
in the Land l.·~quisition Act, 1894. There was nothing in the U.P. Act which
.. precluded the Court from adopting such a construction, and this was necessary
to save the Act from the vice of arbitrary and hostile discrimination.
B
This Court also found that the provisions of the Nagpur Act, with
which we are concerned, were similar to the provisions of the U.P. Act. This
aspect of the matter has been discussed in paragraph 27 of the report. We
have also considered the provisions of the Nagpur Act as well as the provisions
of the Punjab Act. We are satisfied that the aforesaid two Acts as well as the C
U.P. Act have a common scheme and pattern. All the three legislations relate
to town planning and development, and each one of them specifies the various
schemes that may be undertaken. For acquisition of land for the purposes of
any of the schemes under the said Acts, the Land Acquisition Act 1894 has
been made applicable with certain modifi~ations as contained in the schedule
to the said Acts which are numerous ancf s~bstantial. The modifications made D
are also similar. We have found no distinction in the three Acts which may
have a bearing on the question relating to legislative incorporation of the
Land Acquisition Act in the State Acts. We are, therefore, of the view that
what has been held by this Court in U.P. Avas Evam Vikas Parishad v. Jainu/
Islam and Anr., (supra) with regard to U.P. Act holds good for the Punjab E
Act as well as the Nagpur Act. Consequently we are unable to subscribe to
the view taken in Bhatinda improvement Trust v. Ba/want Singh and Ors.,
(supra) that the provisions of the Land Acquisition Act have not been
incorporated into the Punjab Act and that they have merely been cited or
referred to in the Punjab Act.
F
It may be noticed that in UP. Avas Evam Vikas Parishad v. Jainul
Islam and Anr., (supra) this Court highlighted the fact that though under the
Land Acquisition Act as amended in its application to the State of U.P. there
was no provision for grant of solatium, by the U.P. Act such solatium was
provided for. The intention of the leg,islature was .11pparent that it wanted to
" confer the benefit of sotatium by modifying s~·ction 23(2), which benefit was G
not available under the provisions of the Land Acquisition Act as it was
applicable in the State of U.P. at the time _of enactment of the U.P. Act. So
far as the Punjab Act and the Nagpur Act-ar~ concerned, the schedules do not
modify the provisions of Section 23(2) of the Land Acquisition Act which
provides for payment of solatium. However, a proviso was added to the H
670 SUPREME COURT REPORTS [2002) SUPP. 2 S.C.R.

A effect that sub-section (2) shall not apply to any land acquired under.the State
Acts in question. The added proviso is identical in both the State Acts. This
clearly implies that where acquisition was made under the provisions of the
Land Acquisition Act, as modified, the legislature did not intend to deprive
the claimants of solatium as provided under the Land Acquisition Act. But
B solatium was not payable in cases of acquisition under the State Acts. There
are provisions in both the State Acts which permit the State to acquire lands ":1
for the purposes of the schemes without resorting to the provisions of the
Land Acquisition Act such as acquisition by purchase, lease, exchange, or
otherwise, or acquisitions contemplated under deferred street scheme,
development scheme and expansion scheme. In respect of such acquisitions
C solatium is not payable. Such cases are similar to the acquisitions under
Section 53 of the Bombay Town Planning Act which was considered by this
Court in Prakash Amichand Shah v. State of Gujarat and Ors., (supra). In
these circumstances with a view to save the law from the vice of arbitrary
and hostile discrimination, the provisions must be construed to mean, in the
D absence of anything to the contrary, that the provisions of the Land Acquisition
Act as amended by the I 984 Act relating to determination and payment of
compensation would apply to acquisition of land for the purposes of the State
Acts. It must, therefore, be held that while incorporating the provisions of the
Land Acquisition Act in the State Acts, the intention of the legislature was
that amendments in the Land Acquisition Act relating to determination and
E payment of compensation would be applicable to acquisition of lands for the
purposes of the State Acts. Consequently the claimants are entitled to the
benefits conferred by Section 23( I-A), if applicable, and Section 23(2) and
28 of the Land Acquisition Act as amended by the 1984 Act for acquisition
of land for the purposes of the State Acts under Sections 59 of both the
Nagpur and the Punjab Acts.
F
We shall now proceed to consider 'the other submissions urged before
us.

In so far as the Punjab cases are concerned, the challenge is to the grant
G of benefit to the claimants under the amended provisions of Sections 23 and
28 of the Land Acquisition Act. In all these cases acquisitions were made
under the provisions of the Land Acquisition Act as modified by the State
Act and the Collector had made his Awards which were challenged.

Mr. Rajinder Sachar appearing on behalf of Jalandhar Improvement
H Trust submitted that the scheme of the Act discloses that the acquiring authority
NAGPUR IMPROVEMENT TRUST v. VASANTRAO (B.P. SINGH, J.) 671"

was the Trust and not the State. He sought to distinguish the case of Nagpur A
Improvement Trust contending that in that case it was the State which was
the acquiring authority and the State could not discriminate between one
land-holder and the other whose lands were sought to be acquired by choosing
to acquire land under 09e or the other Act so as to discriminate between such
land holders. The submission overlooks Section 17-A of the Land Acquisition B
Act which is inserted in all three State Acts by way of modification. In Om
Prakash and Anr. v. State of UP. and Ors., [1974] 1 SCC 628 this Court
considered a similar provision in the U.P. Nagar Mahapalika Adhiniyam,
1959 and held that Section 17-A which was inserted in that Act and which
was in the same terms, showed that the land has first to be acquired by the
Collector for the Government and thereafter it is transferred by the Government C
to the Mahapalika only on payment of its costs. Thus, it was clear beyond all
manner of doubt that whenever land is to be compulsorily acquired for the
Mahapalika the acquiring authority is the Government. It was observed that
there was no material difference between the impugned provisions of the
Adhiniyam and those which were in question before this Court in Nagpur
Improvement Trust's case (supra). Since Section 17-A inserted in the Land D
Acquisition Act by way of modification in all the three State Acts is in the
same terms as Section 17-A considered by this Court in the aforesaid decision,
it must be held that the acquiring authority under the State Acts is the
Government and not the Trust.
E
In any event in Nagpur Improvement Trust (supra) this Court negatived
the contention that different principles of compensation can be laid if the
land is acquired for or by the Improvement Trust or Municipal Corporation
or the Government. This Court held that as far as the owner is concerned, it
does not matter to him whether the land is acquired by one authority or the
other. Thus, viewed from any angle, the submission must be rejected. F
Learned counsel then relied upon the two decisions of this Court in
Maneklal Chhotalal and Ors. v. MG. Makwana and Ors., (supra) and State
of Gujarat v. Shanti/al Mangaldas and Ors., (supra), and submitted that the
law as laid down in those decisions must apply to the cases in hand. Both
these decisions were considered in a later decision of this Court in Prakash G
Amichand Shah v. State of Gujarat and Ors., (supra) and followed. In Jainul
Islam's case (supra) this Court considered the decision in Prakash Amichand
Shah v. State of Gujarat and Ors., (supra) and distinguished it. It must,
therefore, be held that the aforesaid two decisions on which Mr. Sachar relies
do not advance the case of the Trust. Those cases are clearly distinguishable. H
672 SUPREME COURT REPORTS [2002] SUPP. 2 S.C.R.

A Mr. Sachar then contended that even if the claimants cannot be deprived of
the enhanced solatium under Section 23(2) of the Land Acquisition Act, in
the facts of this case the owners are not entitled to the benefit of additional
compcsation payable under Section 23(1-A) of the Land Acquisition Act
which has been brought in by way of amendment in the year 1984.

B We find considerable force in this submission. It may be noticed that
at the time when the High Court decided the Letters Patent Appeals pending
before it, the law as laid down by this Court in Union of India and Anr., etc.
etc. v. Zora Singh and Ors., etc. etc., [1992] I SCC 673 held the field.
However, a larger bench of 5 judges reconsidered the matter in K.S.
C Paripoornan v. State of Kera/a and Ors., : [1994] 5 SCC 593 and overruled
the decision in Zora Singh 's case. This Court held :-

"80. For the reasons aforementioned it must be concluded that in
respect of acquisition proceedings initiated prior to date of
commencement of the amending Act the payment of the additional
D amount payable under Section 23(1-A) of the Act will be restricted
to matters referred to in clauses (a) and (b) of sub-section (I) of
Section 30 of the amending Act. Zora Singh insofar as it holds that
the said amount is payable in all cases where the reference was pending
before the reference Court on 24-9-1984, irrespective of the date on
which the award was made by the Collector, does not lay down the
E correct law."

In.ihe appeals and special leave petitions before us relating to acquisitions
under the Punjab Act, the High Court has granted to the claimants the benefit
of additional amount payable under Section 23(1-A) of the Land Acquisition
F Act. We find from the record placed before us that the Awards of the Collector
in all these cases were made much before 30th April, 1982 and, therefore,
there was no proceeding for acquisition of land pending on 30th April, 1982
since the Collector had made his Awards much earlier. Such being the factual
position, the claimants will not be entitled to the benefit of additional amount
payable under Section 23(1-A) of the Land Acquisition Act and the judgments
G and orders of the High Court on this aspect of the matter must be set aside.
In C.A. Nos.9260-9261 of 1995 the appellant ha~ claimed benefit of
additional amount payable under Section 23( I-A) of tn'e Land Acquisition
Act. In these cases as well the Collector had made his Award much before
30th April, 1982 and, therefore, the appellant's claim for additional amount
H under Section 23( I-A) must be rejected.
NAGPUR IMPROVEMENT TRUST v. VASANTRAO [B.P. SINGH, .J.] 673

So far as the acquisition under the Nagpur Act and the U.P. Act are A
concerned they have been challenged on the ground that the Notification
corresponding to the declaration under Section 6 of the Land Acquisition Act
was made more than 3 years after the expiry of the date of the publication
ii> of the Notification corresponding to the Notification under Section 4 of the
Land Acquisition Act. This was on the assumption that the provisions of the B
Land Acquisition Act were not incorporated in the State Acts but were merely
referred to and the amendment of Section 6 of the Land Acquisitidn by
insertion of proviso thereto by Act 13of1967, would apply to the acquisitions.
We have already held that the provisions of the Land Acquisition Act as
modified by the State Acts and the Schedule thereto stand incorporated in the
State Acts and, therefore, the subsequent amendments of Section 6 by the C
Land Acquisition (Amendment and Validation) Act, 1967 (Act No. 13 of
1967) or by Act 68 of 1984, will have no effect on the acquisition made
under the State Acts. The High Court of Allahabad has taken this view while
the High Court of Bombay, Nagpur Bench, Nagpur has taken the contrary
view. The appeals, therefore, which are directed against the judgment of the
High Court of Allahabad must be dismissed and those against the judgment D
of the High Court of Bombay, Nagpur Bench, Nagpur, must be allowed.
Since we have held that the Land Acquisition Act stands incorporated in the
State Acts, with the consequence that subsequent amendments to the Land
Acquisition Act have no effect upon the acquisitions made under the State
Acts, it is not necessary to consider the submission of Mr. Rakesh Dwivedi, E
Senior Advocate, that in view of the judgment of this Court in T.M Peter's
case (supra), the absence of any time limit in the State Acts for issuance of
Notification corresponding to the declaration under 6 of the Land Acquisition
Act will not expose the State Acts to the charge of discrimination invoking
the principles enshrined in Article 14 of the Constitution.
F
In the result C.A. Nos. 9206 to 9214of1995 are partly allowed and the
direction contained in the judgments and orders impugned to the effect that
the claimants shall be entitled to the benefit of additional compensation under
Section 23(1-A) of the Land Acquisition Act is set aside. However, the
impugned judgments and orders are affirmed in all other respects.
G
Special Leave Petition (Civil) No. 3210 of 1999 is dismissed.

Civil Appeal Nos. 9260-9261 of 1995 in which the appellants have
claimed additional compensation under Section 23(1-A) of the Land
Acquisition Act are dismissed since in all these cases the Collector pronounced H
674 SUPREME COURT REPORTS [2002] SUPP. 2 S.C.R.

A his Award much prior to 30th April, 1982.
Civil Appeal Nos. 3789 of 1992 and 8.39 of 1995 and Special Leave
Petition (Civil) Nos. 12949 of 1992 and 3331 of 1993 are dismissed.

Civil Appeal Nos. 6590 to 6592 of 2001 were partly allowed by this
B Court by order dated September 19, 2001 in so far as the claim for interest
on the enhanced solatium under Section 23(2) of the Land Acquisition Act
is co!1cerned. Their claim to interest on the sum payable under sub-section
(1-A) of Section 23 of the Land Acquisition Act must also be allowed in
view of the judgment of this Court in Sunder v. Union of India (supra).
Accordingly these appeals are allowed and it is held that the claimants are
C also 'entitled to interest on the amount payable to them under sub-section (I-
A) of Section 23 of the Land Acquisition Act. The respondents are directed
to compute and pay the interest payable to the appellants in accordance with
law as enunciated in Sunder v. Union of India, (supra).

D Civil Appeal Nos. 1164-1200 of 1993 and SLP (C) Nos. 8256-8259 of
1993 are allowed and the impugned judgments and orders of the High Court
in all the appeals are set aside. The appellants shall now proceed with the
acquisition in accordance with law.

There shall be no order as to costs.
E
K.K.T. Appeals/Petitions dismissed.

..