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Nature of ownership cannot decide the compensation of Land Acquisition

Dikshita More ,
  01 March 2023       Share Bookmark

Court :
Hon’ble Supreme of India
Brief :

Citation :
Civil Appeal No 8819 of 2022

Case title:

Ramesh Chandra Sharma & Ors. vs State of Uttar Pradesh & Ors 

Date of Order:

20th February, 2023


Justice Krishna Murari and Justice S. Ravindra Bhat


Petitioner: Ramesh Chandra Sharma & Ors.

Defendant: State of Uttar Pradesh & Ors.


  • The wave of liberalisation that began in early 1970 encouraged individuals to relocate to Delhi in search of employment. The Union Government made the decision to build residential and industrial zones around the capital, which was on its way to becoming a global city, in order to limit the influx of migrants and to provide them with a dignified existence. 
  • As a result, Gurgaon and NOIDA were created. Eventually, these two locations were unable to satisfy the demands of the emigrating population, necessitating the creation of the township of Greater Noida. The Uttar Pradesh Government exercised its authority under Section 3 of the UP Industrial Area Development Act, 1976, to establish it.
  •  In order to purchase around 580 hectares of land, the Greater Noida Authority submitted notifications on October 3, 2005, and January 5, 2006, respectively, under Sections 4(1) and 6(1) of the Land Acquisition Act, 1894. 
  • Litigation was required for the acquisition. a second directive was given to award developed Abadi land to the extent of 10% of their acquired property, subject to a ceiling of Rs. 2,500/- square metre, and a further direction was issued to pay further compensation to the landholders at a rate of 64.70% of the already paid compensation.
  •  The High Court, however, did not distinguish between landowners who were Pushtaini and Gair Pushtaini. The Supreme Court in 2015 upheld the judgement of the High Court. Under Rule 4(2) of the Land Acquisition Regulations, 1997, an agreement was reached between the Greater Noida Authority and the landowners in 2006. 
  • The Pushtaini landowners received compensation at a rate of Rs. 322 per square yard in accordance with the Board's 1998 judgement, while the Gair Pushtainis received compensation at a rate of Rs. 280 per square yard. The Pushtaini landowners eventually received more compensation as well, and the State Government authorised it in 2009.

Issue Raised:

  • Why the petitions were submitted to the Court contesting the Board's judgement and the State Government's permission.


  • The Court traced the words "Pushtaini" and "Gair Pushtaini's" etymology at the threshold. It was mentioned that the Persian word "Pushtaini" came from the word "Pusht," which means "back." Historically, the term has been employed in relation to ancestry. The word "gair," which originates from Urdu, implies "different than." Hence, "Gair Pushtaini" would refer to someone who is not a Pushtaini. The Court made the interesting observation that using the name "Pushtaini" to exclude compensation and using ancestry as a "instrument for inclusivity" would be "an historically erroneous interpretation." It stated:
  •  "Although this does not directly affect the case's merits, we believe it to be a worthwhile remark because law has the ability to legitimise the meaning of words, alter the context in which a word is used, and ultimately alter the path of history itself."
  • The Authority said that the appellant landowners had addressed the High Court without using all of the Land Acquisition Act's available remedies. The challenge in the writ suit was based on a breach of Article 14 of the Constitution, which is a basic right, and the Apex Court was not impressed with the line of argumentation. It was emphasised that the existence of an alternative remedy could not preclude a constitutional court from exercising its jurisdiction. The Authority's claim that the contract being consented to cannot be contested in court was not accepted by the Court either. It was mentioned that the landowners who later received further compensation also signed the agreement. Moreover, at the time the contract was signed.
  • Test for Reasonable Classification The Court determined that the reasonable classification test, which was first used in State of West Bengal v. Anwar Ali Sarkar (1952) AIR 75 and followed in RC Cooper v. Union of India (1970) 1 SCC 248, Navtej Singh Johar and Others v. Union of India (2018) 10 SCC 1, would be appropriate to use to evaluate the classification in the current case. It was mentioned that the Full Bench of the High Court had ruled that the division of landowners into two groups was based on whether they were direct descendants of the land or not. It was decided that rehabilitation of the original occupants should be the classification's goal (sons of the soil). In the lack of any empirical proof, the Apex Court could not concur with the supposition that only the Pushtaini proprietors permanently stay in the property or that it is their main source of income. It was noticed that many Gair-Pushtaini landowners depend on the relevant property for their main source of income. The Court was likewise unable to establish any connection between the classification and the object. The Authority has the onus of proof, according to the Court, to support the classification.
  • The Wednesbury Principle was established by the Supreme Court in Om Kumar and Others v. Union of India (2001) 2 SCC 386, and the Court referred to it to evaluate the extent of its inference with the administrative decision of the Authority. The classification is unlawful, it was discovered later, as it has no basis in either the Land Acquisition Act or the UP Land Acquisition Rules. There was no consideration of empirical evidence in the categorisation. On the other hand, in order to classify, it took into account a pointless factor like the cut-off date. The Court made a note of the categorization deadline. The Court stated that the cut-off date by itself, without the context of the actual landowners, is not indicative of which landowners will be most negatively impacted. In light of this, the Court decided to invalidate the classification. Yet, it did so after making a reference to the proportionality test.
  • The Court concluded that the following conditions must be met in order to evaluate the validity of a state action in K.S. Puttaswamy and Anr. v. Union of India and Ors. (2017). I Any interference with basic rights must be done with governmental intent, (ii) The aforementioned rights-infringing measure must be justified by a rational connection between the interference and the state goal, (iii) The measures must be necessary to achieve the goal, (iv) the restrictions must be necessary to protect the acceptable goal, and (v) the state must provide adequate safeguards against the possibility of an abuse of such rights-infringing interference.
  • The classification violates the first two criteria of the proportionality test, according to the Court, and lacks a reasonable connection to the goal that is being pursued. Since that Section 23 of the Land Acquisition Act already offers compensation for rehabilitation, which is also in violation of the third and fourth criteria of the proportionality test, it was observed that it also violated those provisions. It was stated that the designation might make it impossible for Gai-pushtaini landowners who require rehabilitation to do so without payment. The same would go against Section 23's intention. Regarding this, the Court noted.
  • Where an existing section of the Act is present, the categorization established by the GNOIDA authority must be in support of that Section and not in opposition to it. Finally, it stated that the classification's absence of meaningful guidelines and safeguards failed the fifth requirement of the proportionality test. The categorisation contravenes the Supreme Court's ruling in Nagpur Improvement Trust v. Vithal Rao and Others.
  • Additionally, it was determined that the classification in the current case was in violation of the Supreme Court's decision in Nagpur Development Trust and another vs. Vithal Rao and others, 1973. The Nagpur Improvement Trust case established that, regardless of the type of owner whose land is being purchased, the authority cannot distinguish between different sorts of owners when purchasing land for public use.


Given the foregoing reasons, the High Court's Whole Bench's contested decision cannot be upheld and is now reversed. As a result, the Writ Petition the Appellants filed with the High Court is upheld, and the Appellants are deemed deserving of the reliefs outlined therein. As a result, the appeals are accepted. We do not impose any expense orders given the facts and the circumstances.

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