Union Of India And Another v. Raghubir Singh (Dead) By Lrs. Etc.

Facts

The lands of the respondents in CA 2839-40 of 1989 were acquired under the Land Acquisition Act, 1894, the Section 4 notification having been issued on 13-11-1959. The award for compensation was made by the Collector on 30-3-1963 and the reference under Section 18 disposed of by the ADJ on 10-6-1968, who enhanced the compensation. An appeal was preferred by the respondents in the High Court claiming further compensation. During the pendency of that appeal the Land Acquisition (Amendment) Bill, 1982 was introduced on 30-4-1982. The Bill became Act on receiving the assent of the President on 24-9-1984. The High Court disposed of the appeal on 6-12-1984 and besides raising the amount of compensation it also raised the rate of interest on it and also awarded a solatium at 30 per cent by applying the change effected by the Amendment Act of 1984. The State appealed to the Supreme Court.

The matter came before a Bench of two Judges (E.S Venkataramiah and R.B Misra, JJ.) on 23-9-1985. The Bench had before it two earlier decisions of the Supreme Court taking contrary stands. The first a decision of two Judges (Chinnappa Reddy and Sabyasachi Mukharji, JJ.) in Kamalajammanniavaru case decided on 14-2-1985 which had held that award of 30 per cent solatium under the amended Section 23(2) by the High Court or Supreme Court will apply only where the award appealed against was made by the Collector or Court between 30-4-1982 and 24-9-1984. The second decision of 14-8-1985 in Bhag Singh by a three-Judge Bench (Bhagwati, C.J, A.N Sen and Madon, JJ.) held a contrary view holding that even if an award is made by the Collector or court on or before 30-4-1982 and an appeal against such award is pending before the High Court or the Supreme Court on 30-4-1982 or is filed subsequent to that date, the provisions of the amended Sections 23(2) and 28 of Land Acquisition Act would be applicable in relation to an order passed in such appeal by the High Court or the Supreme Court. This is so because the appeal is a continuation of the reference made before the court under Section 18 and so the appellate court must apply the provision as it finds amendment on the date of decision of appeal. Bhag Singh overruled Kamalajammanniavaru and approved of another order by a three-Judge Bench (Fazal Ali, Varadarajan and Ranganath Misra, JJ.) of 1-5-1985 in Mohinder Singh case which merely directed payment of enhanced solatium and interest without giving any reasons or referring to the contrary opinion in the first decision.

In view of this, the two-Judge Bench referred the following question to the present Bench of five judges:

“Whether under the Land Acquisition Act, 1894 as amended by the Land Acquisition (Amendment) Act, 1984 the claimants are entitled to solatium at 30 per cent of the market value irrespective of the dates on which the acquisition proceedings are initiated or the dates on which the award had been passed?”

A preliminary objection was raised by the respondents challenging the validity of the reference to a larger Bench: A two-Judge Bench finding itself in disagreement with the view laid down by a three-Judge Bench cannot on that score refer the matter to a larger Bench.

Held :

The benefit of the enhanced solatium is intended by Section 30(2) only in respect of an award made by the Collector between 30-4-1982 and 24-9-1984. Likewise the benefit of the enhanced solatium is extended by Section 30(2) to the case of an award made by the Court between 30-4-1982 and 24-9-1984, even though it be upon reference from an award made before 30-4-1982.

(Para 31)

Insofar as matters pending on 20-4-1982 before the High Court and the Supreme Court in respect of awards made by the Collector or the Court before that date are concerned they are not covered by Section 30(2) of the Amending Act. The words “any such award” in Section 30(2) cannot be interpreted broadly. The word “such” in the collocation “any such award” in Section 30(2) is significant and it must necessarily intend that the appeal to the High Court or the Supreme Court in which the benefit of the enhanced solatium is to be given, must be confined to an appeal against an award of the Collector or of the Court rendered between 30-4-1982 and 24-9-1984. In other words Section 30(2) of the Amendment Act extends the benefit of the enhanced solatium to cases where the award by the Collector or by the Court is made between 30-4-1982 and 24-9-1984 or to appeals against such awards decided by the High Court and the Supreme Court whether the decisions of the High Court or the Supreme Court are rendered before 24-9-1984 or after that date. All that is material is that the award by the Collector or by the Court should have been made between 30-4-1982 and 24-9-1984.

(Paras 32 and 33)

The benefit of enhanced solatium should not depend on the fortuitous circumstances of the appeal being decided on a date after 20-4-1982. Delays in superior courts extend beyond the expected. It could never have been intended that rates of compensation and solatium applicable to the acquisition proceedings initiated 10 to 20 years before should now enjoy the benefit of statutory enhancement. Evaluation of compensation under the Act is related to market value of the land as it existed on the date of notification under Section 4 and solatium is computed as a percentage of such market value.

(Para 33)

Practice and Procedure — Precedent — A Division Bench, held, is bound by earlier decision of another Division Bench of equal or more judges — On disagreement or doubt, can the later Division Bench not intending to follow such previous binding decision of an earlier Division Bench refer the matter to a larger Bench — Held, justified in the present case in view of the nature and potential of the questions raised — Instance in Triveniben case relied on — Suggested that court sit in Division Bench of three Judges — Supreme Court Rules, 1966, Order 7 Rules 1 and 2 — Stare Decisis — Constitution of India, Articles 145, 137 and 141

Held :

There is no constitutional or statutory prescription in the matter, and the point is governed entirely by the practice in India of the Courts sanctified by repeated affirmation over a century of time.

(Para 27)

It is in order to guard against the possibility of inconsistent decisions on points of law by different Division Benches that the Rule has been evolved, in order to promote consistency and certainty in the development of the law and its contemporary status, that the statement of the law by a Division Bench is considered binding on a Division Bench of the same or lesser number of Judges. This principle has been followed in India by several generations of Judges.

(Para 27)

Javed Ahmed Abdul Hamid Pawala v. State Of Maharashtra ., (1985) 1 SCC 275 : 1984 SCC (Cri) 653 : AIR 1985 SC 231, referred to

Hence, a pronouncement of law by a Division Bench of this Court is binding on a Division Bench of the same or a smaller number of Judges, and in order that such decision be binding, it is not necessary that it should be a decision rendered by the Full Court or a Constitution Bench of the Court.

(Para 28)

[The Court suggested that for the purpose of imparting certainty and endowing due authority decisions of this Court in the future should be rendered by Division Benches of at least three Judges unless, for compelling reasons, that is not conveniently possible.

(Para 28)

In the present case, there was sufficient justification for the order dated 23-9-1985 made by the Bench of two learned Judges referring these cases to a larger Bench for reconsideration of the question decided in K. Kamalajammanniavaru and Bhag Singh case. The preliminary objection raised by learned counsel for the respondents to the validity of the reference is overruled.

(Para 29)

Judicial process — That judges make law is no longer in doubt — Position in UK and USA compared — Judicial activism — Constitution of India, Articles 141 and 32, 226 & 136

(Para 7)

It used to be disputed that Judges make law. Today, it is no longer a matter of doubt that a substantial volume of the law governing the lives of citizens and regulating the functions of the State flows from the decisions of the superior courts.

(Para 7)

The Judge as Law Maker, p. 22, referred to

Constitution of India — Articles 32, 226, 136 and 13 & 368 — Judicial review — Extent of — Power to review Acts of legislature is entrenched in the Constitution of India — Flows from the separation of powers envisaged by it — Position in UK different — Power of Higher Judiciary in India extends to reviewing constitutional amendments — Burden of exercising the power judiciously — Separation of powers

While Parliament and the State Legislature in India enact the law and the Executive Government implements it, the Judiciary sits in judgment not only on the implementation of the law by the Executive but also on the validity of the Legislation sought to be implemented. One of the functions of the superior judiciary in India is to examine the competence and validity of legislation, both in point of legislative competence as well as its consistency with the Fundamental Rights. In this regard, the courts in India possess a power not known to the English Courts.

(Para 7)

Ex parte Canon Selwyn, (1872) 36 JP 54; Cheney v. Conn, (1968) All ER 779, referred to

The range of judicial review recognised in the superior judiciary of India is perhaps the widest and the most extensive known to the world of law. The power extends to examining the validity of even an amendment to the Constitution, for now it has been repeatedly held that no constitutional amendment can be sustained which violates the basic structure of the Constitution.

(Para 7)

Kesavananda Bharati v. State of Kerala, (1973) 4 SCC 225 : 1973 Supp SCR 1; Indira Nehru Gandhi v. Raj Narain, 1975 Supp SCC 1 : (1976) 2 SCR 347; Minerva Mills Ltd. v. Union of India, (1980) 2 SCC 591; S.P Sampath Kumar v. Union of India, (1987) 1 SCC 124 : (1987) 2 ATC 82 : (1987) 1 SCR 435, relied on

With the impressive expanse of judicial power vested in them it is only right that the superior courts in India should be conscious of their enormous responsibility. This is specially true of the Supreme Court, for as the highest Court in the entire judicial system the law declared by it is, by Article 141, binding on all courts within the territory of India.

(Para 7)

Constitution of India — Articles 13 & 245 and 32 & 226 — Effect of declaring an Act of legislature unconstitutional — Remedy for revival of such Act

Where a statute is declared invalid in India it cannot be reinstated unless constitutional sanction is obtained therefor by a constitutional amendment or an appropriately modified version of the statute is enacted which accords with constitutional prescription.

(Para 7)

Precedent — Necessity, aim and justification for the doctrine lies in need for certain clear and consistent law — But law must also adjust to changing conditions in society — Courts to strike a balance between the two — Desirable extent of change in a developing society — Under what circumstances and within what limits and in what manner the Supreme Court should overrule itself — Final determination of this question left open to be decided in the future — Broad guidelines held can be deduced from existing case law — Position in UK, Australia and the US referred to — Constitution of India — Articles 141 & 32, 136 & 226, 227 and 145 — Jurisprudence — Stare decisis — Judicial process — Consequence of, in laying precedents

The doctrine of precedent is a cardinal feature of the hierarchical character of the Indian judicial system. Therefore it is important that the law declared by the highest court be certain, clear and consistent. The decisions of the Supreme Court while adjudicating on the rights of the parties and resolving the disputes between them embody a declaration of law which operates as a binding principle for future cases and lead to development of the jurisprudence of the law.

(Paras 7 to 9)

Yet the law must meet the need to adjust itself in a forever changing society. In this experience not logic must guide.

(Paras 10 and 11)

The acceptance of the principle that the Court is not bound by its earlier judgments and possesses the freedom to overrule its judgment when thought fit to keep pace with the changing times, ensures the preservation and provides legitimation to the doctrine of binding precedent, and therefore, certainty and finality in the law, while permitting necessary scope for judicial creativity and adaptability of the law to the changing demands of society.

(Para 14)

The judicial search for solutions responsive to a changed social era involves a search not only among competing propositions of law, or competing versions of a legal proposition, or the modalities of an indeterminacy such as “fairness” or “reasonableness”, but also among propositions from outside the ruling law, corresponding to the empirical knowledge or accepted values of present time and place, relevant to the dispensing of justice within the new parameters.

(Para 11)

Oliver Wendell Holmes : The Common Law, p. 5; Oliver Wendell Holmes : Common Carriers and the Common Law, (1943) 9 Curr LT 387; Julius Stone : Legal Systems & Lawyers Reasoning, pp. 58-59, relied on

The universe of problems presented for judicial choice-making at the growing points of the law is an expanding universe. Its extensiveness at a particular time is a function not only of the accumulation of past decisions, not only of changes in the environment, but also of new insights and perspectives both on old problems and on the new problems thrown up by changes entering the cultural and social heritage.

(Para 12)

The dilemma that a judge has to face is either to follow the precedent or set new norms to meet the changed social context. But whatever the degree of success in resolving the dilemma, the Court would do well to ensure that although the new legal norm chosen represents a departure from the previously ruling norm, it must, nevertheless, carry within it the same principle of certainty, clarity and stability. The reconciliation lies in keeping both objectives in view, “that the law shall be certain, and that it shall be just and shall move with the times”. For the Court there are limits to what it can and should do. The extension of the law must be by development and application of fundamental principles. The introduction of arbitrary conditions and limitations must be left to the legislature

(Para 13)

Roscoe Pound : An Introduction to the Philosophy of Law, p. 19; The Judge as Law Maker, p. 25-6; Myers v. Director of Public Prosecutions, LR 1965 AC 1001 : (1964) 3 WLR 145 : (1964) 1 All ER 877, relied on

Insofar as the Supreme Court of India is concerned its responsibility in the above choice is all the more sensitive and significant because the response lies in relation to a rapidly changing social and economic society. In a developing society such as India the social forces which demand attention in the cauldron of change from which a new society is emerging appear to call for new perceptions and new perspectives. The right of the Supreme Court of India to overrule its previous judgments when thought fit to keep pace with the needs of changing times has never been in doubt after Bengal Immunity case. What needs determination however is the question: under what circumstances and within what limits and in what manner should the highest Court overturn its own pronouncements.

(Paras 14 and 15)

[After referring to the practice in UK, Australia, the United States and of the Privy Council (paras 16-20) the Court referred to selected decisions of the Supreme Court where this question had been considered (paras 21-24) and concluded: “It is not necessary to refer to all the cases on the point. The broad guidelines are easily deducible from what has gone before. The possibility of further defining these guiding principles can be envisaged with further juridical experience, and when common jurisprudential values linking different national systems of law may make a consensus pattern possible. But that lies in the future.”]

(Para 25)

Street Tramways v. London County Council, 1898 AC 375; Radcliffe v. Ribble, Motor Services Ltd., 1939 AC 215; Dr. Alan Paterson's, Law Lords, 1982 at pp. 156-157; Jones v. Secy. of State for Social Services, 1972 AC 944; Ross-Smith v. Ross-Smith, 1963 AC 280 : (1962) 1 All ER 344 : (1962) 2 WLR 388; Indyka v. Indyka, (1969) AC 33 : (1967) 2 All ER 689 : (1967) 3 WLR 510; Steadman v. Steadman, 1976 AC 536 : (1974) 2 All ER 977 : (1974) 3 WLR 56; Myers v. DPP, 1965 AC 1001 : (1964) 2 All ER 881 : (1964) 3 WLR 145; Cassell & Co. Ltd. v. Broome, 1972 AC 1027; Haughton v. Smith, 1975 AC 476; Knuller v. DPP, (1973) AC 435; Oldendorff (E.L) & Co. GambH v. Tradax Export SA, 1974 AC 479 : (1972) 3 All ER 420; Conway v. Rimmer, 1968 AC 910 : (1968) 2 WLR 998; Tramways case, (1914) 18 CLR 54; State of Washington v. Dawson & Co., 264 US 646 : 68 L Ed 219; David Burnel v. Coronado Oil & Gas Co., 285 US 393 : 76 L Ed 815; National Bank v. Whitney, 103 US 99 : 26 L Ed 443; Compensation to Civil Servants, In re, AIR 1929 PC 84 : 1929 AC 242 : 56 MLJ 363; Attorney General of Ontario v. Canada Temperance Federation, 1946 AC 193 : 62 TLR 199 (PC); Phanindra Chandra Neogy v. King, AIR 1949 PC 117 : (1948-49) 76 IA 10; State of Bombay v. United Motors (India) Ltd., AIR 1953 SC 252 : 1953 SCR 1069 : (1953) 4 STC 133; Maganlal Chhagganlal (P) Ltd. v. Municipal Corpn. of Greater Bombay, (1974) 2 SCC 402 : (1975) 1 SCR 1; Lt. Column Khajoor Singh v. Union of India, AIR 1961 SC 532 : (1961) 2 SCR 828; Keshav Mills Co. v. CIT, AIR 1965 SC 1636 : (1965) 2 SCR 908 : (1965) 56 ITR 365; Sajjan Singh v. State of Rajasthan, AIR 1965 SC 845 : (1965) 1 SCR 933; Girdhari Lal Gupta v. D.N Mehta, (1971) 3 SCC 189 : 1971 SCC (Cri) 279 : (1971) 3 SCR 748; Pillani Investment Corpn. Ltd. v. ITO, (1972) 1 SCC 122 : (1972) 2 SCR 502; Ganga Sugar Co. v. State of U.P, (1980) 1 SCC 223 : 1980 SCC (Tax) 90 : (1980) 1 SCR 769, referred to

Statute Law — General principle and statutory provision — Application of any general principle must yield to the limiting terms of the statutory principle itself

(Para 34)

R-M/9417.C