Shah, J. - (1.) Whether Ss. 2 and 3 of the Madras Lignite (Acquisition of Land) Act XI of 1953 which seek to Amend the Land Acquisition Act I of 1894 in their application to acquisition of lignite bearing lands are invalid because they infringe the fundamental right under Art. 31 of the Constitution or owners of lands whose property is to be compulsorily acquired is the only question which falls to be determined in this group of appeals.
(2.) Investigations conducted by the Geological Survey of India in 1947 revealed deposits of lignite in the South Arcot District of the State of Madras, and exploratory mining operations were commenced by the Government of Madras. Discovery of deposits of lignite led to speculation in lands. On October 6, 1948, the Government of Madras issued a "Press-Note" announcing that the Government proposed to undertake legislation reserving power to compel any person who had purchased land on or after a date to be prescribed in 1947 in the lignite bearing areas to sell such lands to the Government at the rate at which it was purchased. The Government also advised the owners of the lignite bearing lands in the Vridhachalam and Cuddalore taluks not to sell their lands to speculators. On January 7, 1953, the Government of Madras published a Bill to amend the Land Acquisition Act I of 1894 in certain respects. The Bill was duly passed by the State Legislature on June 2, 1953 and received the assent of the President. It was published as an Act on June 10, 1953 and came into force on August 20,1953. By this Act substantially three provisions are made: (1) that compensation for acquisition of lignite bearing lands under the Land Acquisition Act as amended, is to be assessed on the market value of the land prevailing on April 28, 1947, and not on the date on which the notification is issued under S. 4(1) of the Land Acquisition Act; (2) power is reserved under S. 17 of the Land Acquisition Act to take possession in cases of urgency of lands for the purpose of working lignite mines in the areas in which the Madras Lignite (Acquisition of Land) Act XI of 1953 extends; and (3) in assessing the market value of the land on April 28, 1947, value of any nonagricultural improvements on the land commenced, made or effected after that date are not to be taken into account, even if such improvements were made before the date of publication of the notification under S. 4(1) of the Land Acquisition Act. Pursuant to this Act, notifications under Section 4(1) of the Land Acquisition Act were issued between the months of January and May 1957 notifying for acquisition certain lands in Vriddachalam taluk of the South Arcot District. These notifications were followed by notifications under S. 6 of the Land Acquisition Act. Between the months of May and November 1957 the Land Acquisition Officer made his awards under S. 11 of the Land Acquisition Act assessing compensation on the basis of market value of the lands on April 28,1947 and ignoring in the computation of compensation the value of houses built or other non-agricultural improvements made on the land since that date the owners of the lands affected by these awards submitted petitions under Art. 226 of the Constitution to the High Court of Judicature at Madras challenging the validity of the awards on the ground that the provisions of Madras Act XI of 1953 violated the fundamental right of the owners of the lands under Art. 31(2) of the Constitution. They claimed that the Land Acquisition Officer was bound to award compensation for acquisition of their lands and buildings at the market value prevailing on the respective dates of notifications under S. 4(1), and that awards valuing the lands at the market rate prevailing on April 28, 1947, and excluding the value of buildings constructed after that date and trees thereon wire without jurisdiction. The petitioners accordingly claimed that writs of mandamus be issued directing the State of Madras and the Land Acquisition Officers to refrain from taking possession of the lands and buildings from the petitioners without payment of adequate compensation and for other appropriate relief. The High Court upheld the contention of the petitioners and declared that the awards made on the basis of the provisions of Madras Act XI of 1953 could not be sustained. Against the order passed by the High Court, these appeals have been preferred by the State of Madras, with certificate of fitness granted by the High Court under Art. 132 of the Constitution.
(3.) The Madras Act XI of 1953 makes an important departure from the scheme of the Land Acquisition Act I of 1894. Under the Land Acquisition Act I of 1894, a person interested in any land compulsorily acquired is entitled to the market value of his interest in the land at the date of the publication of the notification under S. 4(1), and this compensation includes the value of the improvements agricultural and non-agricultural made in the land upto the date of the notification. By Madras Act XI of 1953 compensation made payable for compulsory acquisition of land is the value of the land on April 28, 1947, together with the value of any agricultural improvements made thereon after that date and before publication of the notification under S. 4(1). The result of the Madras Act is therefore to freeze for the purpose of acquisition the prices of land in the area to which it applies, and the owners are deprived of the benefit of appreciation of land values since April 28, 1947, whenever the notification under S. 4(1) may be issued and also of non-agricultural improvements made in the land after April 28, 1947. Departure from the provisions of the Land Acquisition Act is challenged is illegal on the ground that it deprives the owner of the land of just compensation for compulsory acquisition of his property.;