Ramesh Chandra Sharma & Ors. vs. State of Uttar Pradesh & Ors.
Background
The Greater Noida Industrial Development Authority acquired village land for the planned development of Greater Noida. By a 1997 board resolution it divided landowners into "Pushtaini" (those who held the land before the Authority was set up on 28 January 1991, or got it later by partition or family settlement) and "Gair-Pushtaini" (those who bought later). Pushtaini owners were paid Rs. 322 per sq. yard under 2006 consent agreements while the appellants, as Gair-Pushtaini owners, got Rs. 280, and a later 2008 committee recommended an additional ex-gratia payment only to "ancestral" farmers. The appellants challenged this before the Allahabad High Court; a Full Bench in March 2018 upheld the classification as a reasonable step to rehabilitate original residents likely to become landless, and dismissed their petitions.
Decision Breakdown
The Supreme Court allowed the appeals and struck down the classification. It first held that signing the compensation agreement did not bar the appellants from challenging the unequal treatment, because the ex-gratia distinction arose only after the agreement was signed and no one can be expected to challenge a future violation in advance. On the merits, it found the Authority's assumption that only Pushtaini owners live on or depend on the land was backed by no empirical data, so there was no rational link between the classification and the stated goal of rehabilitation; many non-ancestral owners could equally depend on the land. Applying the Wednesbury reasonableness and proportionality tests, the Court held the measure was neither necessary nor proportionate and came with no safeguards against abuse. It also held the classification contradicted Nagpur Improvement Trust vs. Vithal Rao, which says compensation cannot vary by the type of owner when land is compulsorily acquired for a public purpose, and that the Land Acquisition Act, 1894 itself provides no basis for such a distinction. The discriminatory part was severed, and the higher rate and ex-gratia payment were extended to all landowners in the area.
Lesson Learnt
When the government takes your land for a public purpose, it cannot pay you less than your neighbour merely because you bought the land more recently or are not an "original" resident; any difference in treatment must rest on real evidence and be permitted by the parent law. A person who accepted compensation under an agreement does not lose the right to challenge unfair treatment that only came into existence afterwards.