Does a statutory provision permitting compensation of up to a maximum of one rupee for compulsory acquisition satisfy Article 300A of the Constitution of India?

No. Such a provision, prescribing no principles, criteria or procedural safeguards, vests unguided discretion and reduces compensation to a nominal and illusory figure. While Article 300A permits deprivation of property by authority of law, such law must nevertheless be just, fair and reasonable, and not arbitrary or confiscatory in effect; a statute enabling acquisition while reducing compensation to a token amount lacks the basic attributes of fairness.

Constitution of India — Arts. 14 and 300A — Srimati Radhika Sinha Institute and Sachchidanand Sinha Library (Requisition & Management) Act, 2015 — Legislative takeover of a trust institution — Manifest arbitrariness — Proportionality — Illusory compensation — Public trust and private trust — Case neither pleaded nor argued — Trusts — Public trust or private trust — Public-facing object — Case neither pleaded nor argued — Held: That an institution is intended to serve a public purpose or is open to public use does not by itself determine that the trust is a public trust; the manner of dedication, the structure of the trust, the nature of control and the rights reserved by the Settlor are all material. Where neither party pleaded that the trust was public, the High Court could not decide on that basis. (¶19, 21) Constitution of India — Art. 14 — Manifest arbitrariness — Absence of inquiry or notice — Less drastic means — Held further: Compulsory acquisition coupled with dissolution of trust arrangements, with no finding of abandonment, failure of purpose or established mismanagement and no inquiry preceding the enactment, is plainly disproportionate. Where grant-in-aid, conditional funding, statutory audit and supervisory oversight were at hand, choosing the most extreme measure is itself a manifestation of arbitrariness. (¶39, 40, 42) Constitution of India — Art. 300A — Compensation up to one rupee — Confiscatory effect — Held further: A provision authorising compensation up to a maximum of one rupee, without prescribing principles, criteria or procedural safeguards, vests unguided discretion and reduces compensation to a nominal and illusory figure. Article 300A permits deprivation of property by authority of law, but such law must be just, fair and reasonable and not confiscatory; the Act was struck down. (¶44, 45, 50)

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