Supreme Court Upholds Tamil Nadu Land Acquisition Acts: C.S. Gopalakrishnan vs. State of Tamil Nadu (2023)

Introduction

Date of the Judgment: May 9, 2023

Citation: (2023) INSC 447

Judges: Justices Dinesh Maheshwari and Sanjay Kumar

Can State laws for land acquisition be valid if they differ from the central laws? The Supreme Court of India recently addressed this question, examining whether Tamil Nadu’s land acquisition laws are discriminatory and arbitrary when compared to the central Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. This case arose from challenges to land acquisitions made under Tamil Nadu’s specific laws for industrial, highway, and harijan welfare purposes.

The Supreme Court bench, comprising Justices Dinesh Maheshwari and Sanjay Kumar, delivered the judgment. Justice Sanjay Kumar authored the opinion for the bench.

Case Background

The State of Tamil Nadu enacted three laws: ‘The Tamil Nadu Acquisition of Land for Harijan Welfare Schemes Act, 1978’; ‘The Tamil Nadu Acquisition of Land for Industrial Purposes Act, 1997’; and ‘The Tamil Nadu Highways Act, 2001’, for acquiring land for specific purposes. These laws were protected under Article 254(2) of the Constitution due to Presidential assent, despite being inconsistent with the central Land Acquisition Act, 1894. However, the enactment of the Right to Fair Compensation and Transparency in Land Acquisition; Rehabilitation and Resettlement Act, 2013 (new LA Act) by the Parliament rendered these State Acts void due to their inconsistency.

To revive these State Acts, the Tamil Nadu Legislative Assembly inserted Section 105-A into the new LA Act through an amendment in 2014. This amendment aimed to exempt the State Acts from the purview of the new LA Act. This amendment received Presidential assent on 01.01.2015, coming into force retrospectively from 01.01.2014.

The validity of this amendment was challenged in the Madras High Court. The High Court declared the three State Acts void, stating that the amendment did not revive them. The High Court also held that Section 105-A did not meet the requirements of Article 254(2) of the Constitution.

During the pendency of the appeals before the Supreme Court, the State of Tamil Nadu enacted ‘The Tamil Nadu Land Acquisition Laws (Revival of Operation, Amendment and Validation) Act, 2019’ (Validation Act of 2019) to revive the three State Acts. This Act received Presidential assent on 02.12.2019 and came into effect retrospectively from 26.09.2013. This Validation Act was upheld by the Supreme Court in G. Mohan Rao and others Vs. State of Tamil Nadu and others [AIR 2021 SC 3126].

Timeline:

Course of Proceedings

The Madras High Court considered a batch of writ petitions challenging the validity of the Tamil Nadu Amendment Act, 2014, and the three State Acts. The High Court framed the following issues:

• Are the State enactments void because of inherent arbitrariness?
• Did the President of India fail to apply his mind while granting assent to Section 105-A?
• Did the impugned State enactments become repugnant once the Parliament ‘made’ the new Land Acquisition Act? If so, did the presidential assent to Section105-A inserted by Tamil Nadu Act No. 1 of 2015 revive the three Acts?
• Are the provisions of Section 105-A(2) and (3) mandatory, and if so, whether non-compliance with these provisions is fatal to the validity of these enactments?

The High Court upheld the validity of the State Acts against the challenge of inherent arbitrariness, relying on previous judgments. It also held that the President had applied his mind while granting assent. However, the High Court ruled that the State Acts became void upon the enactment of the new LA Act and that Section 105-A did not revive them. The High Court deemed Section 105-A(2) and (3) mandatory. Despite declaring the State Acts void, the High Court did not reopen acquisitions where the land had already been used for the intended purpose.

Legal Framework

The case revolves around the interplay between the central and state laws regarding land acquisition. The key legal provisions include:

• Article 254(2) of the Constitution of India: This provision allows a State law to operate despite being repugnant to a Central law on a concurrent subject, provided it receives Presidential assent.
• The Land Acquisition Act, 1894 (old LA Act): The central law for land acquisition before the enactment of the new LA Act.
• The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (new LA Act): The current central law governing land acquisition.
• The Tamil Nadu Acquisition of Land for Harijan Welfare Schemes Act, 1978: A State law for acquiring land for Harijan welfare.
• The Tamil Nadu Acquisition of Land for Industrial Purposes Act, 1997: A State law for acquiring land for industrial purposes.
• The Tamil Nadu Highways Act, 2001: A State law for acquiring land for highways.
• Section 105 of the new LA Act: This section specifies that the new LA Act would not apply or would apply with modifications to the Central Government’s enactments relating to land acquisition, specified in the Fourth Schedule thereto.
• Section 105-A of the new LA Act: Inserted by the Tamil Nadu Amendment Act, 2014, this section aimed to exempt the State Acts from the new LA Act.
• The Tamil Nadu Land Acquisition Laws (Revival of Operation, Amendment and Validation) Act, 2019: A State law to revive the three State Acts.

Arguments

The appellants, C.S. Gopalakrishnan and V. Thirunarayanan, argued that the Tamil Nadu Acquisition of Land for Industrial Purposes Act, 1997, is arbitrary and violates Article 14 of the Constitution. Their main points were:

• The Act lacks adequate safeguards for landowners, especially regarding timelines for acquisition and determination of compensation.
• The market value of the land is determined based on a past date, which is detrimental to the landowners.
• The procedure for determining compensation under the Act is discriminatory when compared to the new LA Act.
• The State cannot freeze property rights by issuing a public notice and then delaying the acquisition process for years.

K.M. Vittal Babu and T. Chinnappan, also appellants, argued that the Tamil Nadu Highways Act, 2001, is discriminatory and arbitrary for similar reasons:

• The Act does not have the same safeguards as the new LA Act, such as the requirement for a Social Impact Assessment Study and strict timelines for acquisition.
• The selective application of provisions of the new LA Act in the Validation Act of 2019 results in discrimination in the matter of compensation.
• The absence of timelines in the Highways Act allows the State to peg the market value for compensation on a date in the remote past, depriving landowners of fair compensation.

The State of Tamil Nadu, represented by Mr. K.K. Venugopal, countered these arguments by stating:

• The timelines in the new LA Act are not sacrosanct, as they can be extended by the government.
• The State Acts are protected under Article 254(2) of the Constitution due to Presidential assent, and any repugnancy with the new LA Act is cured.
• The question of comparing the State Acts with the new LA Act does not arise, as they are protected by Presidential assent.
• The State Acts were enacted for speedy acquisition, and the absence of timelines is intentional.

Submissions of Parties

Issues Framed by the Supreme Court

The Supreme Court considered the following main issue:

1. Whether the Industrial Purposes Act and the Highways Act are void owing to inherent arbitrariness and infringement of Article 14 of the Constitution.

Treatment of the Issue by the Court

The following table demonstrates how the Court decided the issues:

Authorities

The Supreme Court considered the following authorities:

• State of Tamil Nadu and others Vs. Ananthi Ammal and others [(1995) 1 SCC 519] – Supreme Court of India: Upheld the validity of the Tamil Nadu Acquisition of Land for Harijan Welfare Schemes Act, 1978.
• K. Ramakrishnan Vs. The Government of Tamil Nadu [2007 WLR 372] – Madras High Court: Upheld the validity of the Tamil Nadu Acquisition of Land for Industrial Purposes Act, 1997.
• S.N. Sumathy Vs. State of Tamil Nadu and others [2015 SCC OnLine Madras 14055] – Madras High Court: Upheld the validity of the Tamil Nadu Highways Act, 2001.
• Shiv Kumar and another Vs. Union of India and others [(2019) 10 SCC 229] – Supreme Court of India: Held that subsequent purchasers of land cannot challenge acquisition proceedings.
• UP Jal Nigam, Lucknow, and another Vs. Kalra Properties (P) Ltd. [(1996) 3 SCC 124] – Supreme Court of India: Held that a purchaser after notification cannot challenge the acquisition.
• Sneh Prabha and others Vs. State of UP and another [(1996) 7 SCC 426] – Supreme Court of India: Held that a purchaser after notification cannot challenge the acquisition.
• Union of India Vs. Shivkumar Bhargava and others [(1995) 2 SCC 427] – Supreme Court of India: Held that a purchaser after notification cannot challenge the acquisition.
• Meera Sahni Vs. State (NCT of Delhi) and others [(2008) 9 SCC 177] – Supreme Court of India: Held that a purchaser after notification cannot challenge the acquisition.
• V. Chandrasekaran and another Vs. Administrative Officer and others [(2012) 12 SCC 133] – Supreme Court of India: Held that a purchaser after notification cannot challenge the acquisition.
• Rajasthan State Industrial Development & Investment Corporation Vs. Subhash Sindhi Co-op. Housing Society, Jaipur [(2013) 5 SCC 427] – Supreme Court of India: Held that a purchaser after notification cannot challenge the acquisition.
• M. Venkatesh and others Vs. Commissioner, Bangalore Development Authority [(2015) 17 SCC 1] – Supreme Court of India: Held that a purchaser after notification cannot challenge the acquisition.
• Sri Venkateswara Educational and Charitable Trust Vs. The Secretary to Government of Tamil Nadu and others [Writ Appeal No. 1063 of 2012, decided on 17.10.2022] – Madras High Court: Held that the new LA Act would apply for compensation determination under the Industrial Purposes Act.
• G. Mohan Rao and others Vs. State of Tamil Nadu and others [AIR 2021 SC 3126] – Supreme Court of India: Upheld the validity of the Tamil Nadu Land Acquisition Laws (Revival of Operation, Amendment and Validation) Act, 2019.
• P. Vajravelu Mudaliar Vs. Special Deputy Collector, Madras and others [AIR 1965 SC 1017] – Supreme Court of India: Held that discriminatory compensation for housing schemes is invalid.
• Nagpur Improvement Trust and others Vs. Vithal Rao and others [AIR 1973 SC 689] – Supreme Court of India: Held that discriminatory compensation is invalid.
• Union of India Vs. Tarsem Singh and others [(2019) 9 SCC 304] – Supreme Court of India: Discussed principles of compensation.
• Savitri Cairae and others Vs. U.P. Avas Evam Vikas Parishad and others [(2003) 6 SCC 39] – Supreme Court of India: Discussed the application of Article 14 in land acquisition.
• The State of Madhya Pradesh Vs. G.C. Mandawar [AIR 1954 SC 493] – Supreme Court of India: Discussed the application of Article 14 in land acquisition.
• Joseph Shine Vs. Union of India [(2019) 3 SCC 39] – Supreme Court of India: Discussed arbitrariness in statutes.
• State of Kerala and others Vs. T.M. Peter and others [(1980) 3 SCC 554] – Supreme Court of India: Discussed time limits in government sanctions.
• State of Karnataka Vs. Ranganatha Reddy [(1977) 4 SCC 471] – Supreme Court of India: Discussed the effect of Presidential assent under Article 254(2).
• Deputy Commissioner and Collector, Kamrup Vs. Durga Nath Sarma [AIR 1968 SC 394] – Supreme Court of India: Discussed discriminatory compensation.
• Javed and others Vs. State of Haryana and others [(2003) 8 SCC 369] – Supreme Court of India: Discussed the comparison of laws enacted by different legislatures.
• U.P. Avas Evam Vikas Parishad Vs. Jainul Islam and another [(1998) 2 SCC 467] – Supreme Court of India: Discussed the application of amendments to the old LA Act.

Authorities Considered by the Court

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

The Court relied on prior judgments to support its findings:

• The Court followed State of Tamil Nadu and others Vs. Ananthi Ammal and others [(1995) 1 SCC 519], K. Ramakrishnan Vs. The Government ofTamil Nadu [2007 WLR 372], and S.N. Sumathy Vs. State of Tamil Nadu and others [2015 SCC OnLine Madras 14055] to uphold the validity of the State Acts.
• The Court relied on Shiv Kumar and another Vs. Union of India and others [(2019) 10 SCC 229], UP Jal Nigam, Lucknow, and another Vs. Kalra Properties (P) Ltd. [(1996) 3 SCC 124], and other similar cases to hold that subsequent purchasers do not have the locus standi to challenge acquisition proceedings.
• The Court distinguished cases such as P. Vajravelu Mudaliar Vs. Special Deputy Collector, Madras and others [AIR 1965 SC 1017] and Nagpur Improvement Trust and others Vs. Vithal Rao and others [AIR 1973 SC 689], noting that those cases involved discriminatory compensation under the same act, while the present case involved different Acts.
• The Court referred to G. Mohan Rao and others Vs. State of Tamil Nadu and others [AIR 2021 SC 3126] to acknowledge the validity of the Tamil Nadu Validation Act of 2019.
• The Court followed State of Karnataka Vs. Ranganatha Reddy [(1977) 4 SCC 471] to affirm that Presidential assent under Article 254(2) cures repugnancy between State and Central laws.
• The Court followed The State of Madhya Pradesh Vs. G.C. Mandawar [AIR 1954 SC 493] and Javed and others Vs. State of Haryana and others [(2003) 8 SCC 369] to state that Article 14 does not allow for comparing laws enacted by different legislatures.

The Court’s reasoning can be summarized as follows:

• Presidential Assent: The Court emphasized that once a State law receives Presidential assent under Article 254(2) of the Constitution, any repugnancy with a Central law on a concurrent subject is cured. This is a key constitutional principle that the Court upheld.
• No Comparison Under Article 14: The Court clarified that Article 14 of the Constitution does not authorize striking down a law enacted by one legislature by comparing it with a law enacted by another legislature. The source of power for each legislature is different, and therefore, comparison for the purpose of Article 14 is not valid.
• Locus Standi of Subsequent Purchasers: The Court reiterated the principle that subsequent purchasers of land, after a notification for acquisition, do not have the right to challenge the acquisition proceedings.
• Speedy Acquisition: The Court acknowledged that the State Acts were designed for speedy acquisition, and the absence of timelines was intentional.

Conclusion

The Supreme Court dismissed the appeals, upholding the validity of the Tamil Nadu land acquisition laws. The Court reaffirmed the constitutional principle that once a State law receives Presidential assent under Article 254(2), it is valid even if it is repugnant to a Central law. The Court also clarified that Article 14 does not allow for comparison between laws enacted by different legislatures.

This judgment has significant implications for land acquisition in Tamil Nadu. It means that the State can continue to acquire land under the three State Acts for industrial, highway, and harijan welfare purposes. The judgment also reaffirms the importance of Presidential assent in the context of State laws that may be inconsistent with Central laws.

Flowchart of Land Acquisition Process under Tamil Nadu Acts