Case BriefsSupreme Court

Supreme Court: The Bench of Arun Mishra and Amitava Roy, JJ asked CJI to form a larger bench to decide the question as to whether by virtue of the provisions contained in Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, a land acquisition proceeding can lapse if the landowners refuse to accept compensation. As per Section 24 of the 2013 Act, the land acquisition proceedings will be deemed to be lapsed if the ‘compensation has not been paid’.

The Court was hearing the matter where landowners had refused to accept the compensation deposited by Indore Development Authority (IDA) in lieu of the land acquired for the purpose of development of rings roads. The Madhya Pradesh High Court had held that the proceedings had lapsed in view of the decisions of this Court in Pune Municipal Corporation v. Harakchand Misirimal Solanki, (2014) 3 SCC 183 and Shree Balaji Nagar Residential Association v. State of Tamil Nadu, (2015) 3 SCC 353 on the ground that the compensation was not paid to the landowners and that the award was made 5 years or more prior to the commencement of the 2013 Act.

IDA, hence, appealed before the Supreme Court and said:

“there was no lapse of proceedings in the instant case as compensation was offered but was not accepted by landowners. For their own refusal they cannot lay the blame at the door of the IDA.”

It was argued before the Court that in spite of not accepting the compensation deliberately and statements are made in the court by the landowners that they do not want to receive the compensation at any cost and they are agitating the matter time and again after having lost the matters and when proceedings are kept pending by interim orders by filing successive petitions, the provisions of section 24 of 2013 Act cannot be invoked by such landowners.

IDA also submitted before the Court that the object of the deposit under Section 31 of Land Acquisition Act, 1894 is to prevent unnecessary prolongation of the proceedings and accumulation of Collector’s liability for interest. When a party willfully refuses to receive payment by depositing the money in the court, the liability for interest will cease.

Considering the fact that many issues relating to lapse of proceedings under Section 24 of 2013 Act were not considered by the 3-judge bench in in Pune Municipal Corporation case, the bench referred the matter to a larger bench. [Indore Development Authority v. Shailendra, 2017 SCC OnLine SC 1426, decided on 07.12.2017]

Case Briefs

Supreme Court: Answering an important question of law, the bench of Kurian Joseph and R. Banumathi, JJ held that the subsequent purchaser, the assignee, the successor in interest, the power of attorney, etc., are entitled to file a case for a declaration that the land acquisition proceedings have lapsed by virtue of operation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

Rejecting the contention that subsequent purchasers do not have locus standi to challenge the acquisition proceedings, the Court said that it is one thing to say that there is a challenge to the legality or propriety or validity of the acquisition proceedings and yet another thing to say that by virtue of operation of a subsequent legislation, the acquisition proceedings have lapsed. It is a declaration qua the land wherein indisputably they have an interest and they are affected by such acquisition. For such a declaration, it cannot be said that the persons mentioned above do not have any locus standi.

Stating that the 2013 Act has made a sea change in the approach on the acquisition of land and compensation and that the Act proposes to protect the interest of those persons, among others who are affected by the acquisition, the Court said that the subsequent purchasers/successors, etc., are all people affected by the acquisition, and therefore, also they are entitled to seek a declaration on lapse under the 2013 Act. [Govt. of NCT of Delhi v. Manav Dharam Trust, CIVIL APPEAL NO. 6112 OF 2017, decided on 04.05.2017]

Case BriefsHigh Courts

Allahabad High Court: Recently, an issue arose before the Court as to whether a person interested, who has not accepted the award made under Section 11 of the Land Acquisition Act, 1894, and has filed an application before the Collector under Section 18 of the Act, can file an application under Section 28-A of the Act for redetermination of the amount of compensation. The Additional District Magistrate answered it in negative stating that the remedy under Section 18 of the Act had earlier been invoked by the predecessor in interest of the petitioners by filing a reference application.

Counsel for the petitioner contended that Section 28-A of the Act does not contemplate that if a reference application is filed under Section 18 of the Act, a tenure holder cannot invoke the provisions of Section 28-A of the Act and submitted that the first appeal by his predecessor was not decided on merits, but was dismissed under O VII, R 11 of CPC. The counsel for respondent supported the view adopted by ADM.

On hearing both the parties, the Court discussed the relevant provisions highlighting that the award is made by the Collector under Section 11 of the Act. Section 18 provides that any person interested who has not accepted the award may, by written application to the Collector, require that the matter may be referred by the Collector for the determination of the amount of compensation by the Court and Section 28-A of the Act deals with re-determination of the amount of compensation on the basis of the award of the Reference Court.

The Division Bench referred to Scheduled Castes Co-operative Land Owning Society Limited, Bhatinda v. Union of India, (1991) 1 SCC 174 in which the Supreme Court had held that Section 28-A of the Act applies only to those claimants who had failed to seek a reference under Section 18 of the Act and would, therefore, not apply to a case where the claimant had sought and secured a reference under Section 18 of the Act. The Court held that there was no illegality in the order passed by the ADM in rejecting the application filed by the petitioners under Section 28-A of the Act as the same is not maintainable. [Dheer Singh v. State of UP, 2017 SCC OnLine All 596 , decided on 20.02.2017]


Case BriefsSupreme Court

Supreme Court: The Bench of A.K. Goel and U.U. Lalit, JJ held that a post-acquisition allottee of land is necessary or proper party or has any locus to be heard in the matter of determination of compensation under the scheme of the Land Acquisition Act, 1894.

In the present case, large land was acquired by the State of Haryana in different phases for the public purpose of setting-up Industrial Model Township by the Haryana State Industrial Development Corporation (HSIDC) in Gurgaon District in Haryana and a substantial part of the acquired land was allotted to Maruti Suzuki India Limited (MSIL). MSIL had sought for Impleadment as a necessary party in the matter relating to enhancement of compensation on the ground that it was a “person interested”. Rejecting the said contention, the Court said that the expression “person interested” could include a company or local authority for whose benefit the land was acquired under Part VII of the LA Act but the post-acquisition allottee cannot by any stretch of imagination be treated at par with beneficiary for whom the land was acquired.

Explaining the scheme of the LA Act, 1894, the Court said that if the acquisition is for a public purpose, the land vests in the State after the Collector makes an award and the possession is taken. Once the land vests in the State, the acquisition is complete. Any transferee from the State is not concerned with the process of acquisition. The State may transfer the land by public auction or by allotment at any price with which the person whose land is acquired has no concern. The mere fact that the Government chooses to determine the allotment price with reference to compensation price determined by the Court does not provide any locus to an allottee to contest the claim for enhancement of compensation. [Satish Kumar Gupta v. State of Haryana, 2017 SCC OnLine SC 159, decided on 21.02.2017]

Case BriefsHigh Courts

Allahabad High Court: While deciding a matter concerning acquisition of land of church by government the Divisional Bench of V.K. Shukla and Mahesh Chandra Tripathi, JJ. held that land belonging to religious bodies can be acquired by the government if the purpose for which it is acquired is a public purpose.

In the present case the petitioner, Bishop of the Church contented that Section 3 of the Place of Worship (Special Provisions) Act, 1991 prohibits conversion of a place of worship of any religious denomination, in view of which the said acquisition by NHAI (National Highway Authority Of India) for extending of 4 lane road to 6 lane highway, should be annulled. The Court relying on case of Yusuf Ajij Shaikh v. Special Land Acquisition Officer, 1994 SCC OnLine Bom 246 : 1995(1) MhLJ 483, held that the intent of legislators in the said Act was to prevent the conversion by persons of the place of worship of one community or section to religious place of worship of some other community or section. Hence the said acquisition which is for public purpose cannot be annulled according to the provision of said Act. The petitioner also contended that such acquisition is violative of Article 25 (right to freedom of religion) and Article 26 (freedom to manage religious affairs).

The Court did away with said contention by relying on the case of Mohammad Ali Khan v. The Special Land Acquisition Officer, Lucknow Nagar Mahapalika Lucknow, AIR 1978 (All) 280, where it was held by the Supreme Court that Article 25 is a personal right which has to be exercised by the individual. It has no nexus with the place or territory where it has to be exercised. The Court observed that Article 26 guarantees inter alia the right to own and acquire movable and immovable property for managing religious affairs. This right, however, cannot take away the right of the State to compulsorily acquire property in accordance with the provisions of Article 31(2). [Church Of North India Trust Association v. Union Of India, 2016 SCC OnLine All 1185, decided on 19/12/2016]

Case BriefsSupreme Court

Supreme Court: Stating that sections 305, 306 and 387 of the Madhya Pradesh Municipal Corporation Act, 1956 are quite reasonable, the Court said that reasonable compensation is payable by the Corporation for building or part thereof excluding the land under proviso to section 305(1) and compensation for inclusion of land in public street is payable under section 306(3) of the Act. Rejecting the contention that no time period was prescribed for payment of compensation, the Court said that law envisages speedy action without unreasonable delay and that is what is expected of the concerned authorities, in respect of the obligation imposed on them to be discharged. Due to this, the provision cannot be struck down as arbitrary nor can it be said to be confiscatory in nature. The Court was hearing the matter relating to ‘Bus Rapid Transit System Corridor’ where the land was being acquired for widening of roads.

The Court further explained that after the abolition of ‘the right to property’ as a fundamental right, the provisions are quite consistent with Article 300A of the Constitution and reasonable compensation is paid under sections 305 and 306 which if not acceptable, the remedy of arbitration and approaching the District Court under section 387 is available to seek the compensation which has to be on the basis of procedure prescribed in the Land Acquisition Act. Article 300A of the Constitution enables the State to put restrictions on the right by law but the same should not be arbitrary or excessive or beyond what is required in public interest. The imposition of restriction must not be disproportionate to a situation or statute. Legislation providing for deprivation of property under Article 300A must be just, fair and reasonable. Thus, it cannot be said that illusory compensation is provided under section 306 read with section 387 of the Act.

The bench of Jagdish Singh Khehar and Arun Mishra, JJ said that there is restriction put on the ownership rights and in the area no construction can be raised derogatory to the development plan/master plan. When the property vests is clearly culled out in section 305, however the property is held by owner once a development plan is prepared, subject to that use and it is not necessary to acquire the land for the purposes mentioned under section 305. Section 305 is otherwise also a reasonable method of acquisition of the property and it follows a detailed procedure for preparation of development plan/master plan or a town improvement scheme, as the case may be, which involves adjudicatory process and once action is taken under section 305, reasonable compensation follows, special procedure as prescribed, is a complete Code in itself and even if a person is not satisfied, he can claim adjudication under section 387 of the Act where the procedure of the Land Acquisition Act, 1894 is applicable.

The Court also said that development plan itself is binding and has to be implemented by the Corporation not only under the provisions of section 292 but also under the provisions of section 66(1)(y) of the Act of 1956 which mandates a duty upon the Corporation for fulfilling any obligation imposed by the Act or under any other law for the time being in force. [Ravindra Ramchandra Waghmare v. Indore Municipal Corporation, 2016 SCC OnLine SC 1405, decided on 29.11.2016]

Supreme Court

Supreme Court: Dismissing the present appeals filed on the issue of land acquisitions in several villages of Noida, Gautam Budh Nagar and Greater Noida, the 3 Judge Bench comprising of H.L.Dattu, C.J, A.K. Sikri and Arun Mishra, JJ., observed that the Allahabad High Court had studied the ground realities to come up with a practical solution by adequately compensating the land owners namely- increasing the compensation by 64.7% is payable immediately without taking away the rights of the land owners to claim higher compensation under the machinery provided in the Land Acquisition Act; and directing allotment of developed abadi land to the extent of 10% of the land acquired of each of the land owners. The Bench thus affirmed the decision of the Allahabad High Court.  

The case evolved from plethora of writ petitions filed challenging the validity of the Notification dated 12.03.2008 which was issued by the State of U.P under Section 4 read with Section 17 of the Land Acquisition Act, 1894, for colorful exercise of power by acquiring land arbitrarily and with mala fide intentions for the stated purpose of “Planned Industrial Development”. The Notification issued had taken away the right of objection under Section 5A through Section 17(4).Various land owners also filed writ petitions against the decision of the Government to provide the land to a third party for development. The Notification was challenged before the full Bench of Allahabad High Court, wherein the High Court held that the State Government was wrong to invoke the urgency provisions of Section 17 (1); and (4) of the Land Acquisition Act, 1894.

The learned counsel for the appellants Amrendra Sharan, along with other counsels, pointed out the illegalities that were committed in issuing the Notification for acquisition, and argued that the Notification for the acquisition should be quashed due to fraud committed by the Government by not using the land acquired for the stated purpose. Whereas, counsel for the respondents, L.N. Rao contended that the appeals should be dismissed on the ground of inordinate delay and laches, since majority of the land owners have already accepted the compensation provided by the Government, thereby accepting the Government’s proposition of acquiring the land.

Upon perusing the contentions, the Court observed that on one hand, invocation of urgency provisions under Section 17 of the 1894 Act and dispensing with the right to file objection under Section 5A of the Act, was found illegal; and on the other hand, there arose a situation where because of delay in challenging these acquisitions by the land owners, developments have took place in these villages and in most of the cases, third party rights have been created. The Court further observed that the present case does not call for the Court’s interference under Article 136.  Savitri Devi v. State of Uttar Pradesh, 2015 SCC OnLine SC 507, decided on 14.05.2015

AmendmentsLegislation Updates

Lok Sabha passed the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Bill, 2015 on 10-03-2015. The objective of the Bill is to amend the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 and repeal the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Ordinance, 2014.

The Bill proposes following amendments in the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013:

  • Substitutes the word “private company” with “private entity”;
  • Substitutes the words and figures “Companies Act, 1956” with that of “Companies Act, 2013”;
  • Inserts a definition for “private entity” asany entity other than a Government entity or undertaking and includes a proprietorship, partnership, company, corporation, non-profit organisation or other entity under any law for the time being in force”;
  • Inserts a new Chapter IIIA which provides for the power of the appropriate Government to exempt certain projects from the application of the provisions of Chapter II and Chapter III of the Act;
  • Provides for compulsory employment to atleast one member of the affected family of farm labourers;
  • Provides right to farmers to appeal/ complain over land acquisition hearing and redressal of grievances at the district level;
  • Court to take cognizance of the offence under the Act as per Section 197 of the CrPC against the persons who are/was employed in the Central Government or State Government;
  • Return of unutilized land – instead of after “a period of five years” to “a period specified for setting up of any project or for five years, whichever is later”;
  • Substitutes Section 105(3) with the following clause-

“(3) The provisions of this Act relating to the determination of compensation in accordance with the First Schedule, rehabilitation and resettlement in accordance with the Second Schedule and infrastructure amenities in accordance with the Third Schedule shall apply to the enactments relating to land acquisition specified in the Fourth Schedule with effect from 1st January, 2015″.

High Courts

Allahabad High Court: While deciding a case on acquisition of an agricultural land for non agricultural purposes by Greater Noida Industrial Development Authority (GNIDA), the Court expressed its deep concern regarding such acquisition and said that industries can always be set up at barren lands in order to avoid ecological imbalance and reduction in the production of food grains. The Court further held that it is wrong to think that establishment of industries is only way for higher growth, preservation of farming lands is very important for maintaining socio-economic balance. The Court suggested the Government to ensure by legislation that in case there is any acquisition of agricultural land for non-agricultural purposes by an authority then it must make sure that at least three times the area of the acquired land in barren area must be converted to fertile land by the same authority to protect the State from the food crises in years to come. Udai Veer Singh v. State of U.P., Civil Misc. Writ Petition No. 67697 of 2009, Decided on 15th of May, 2014

To read the full judgment, click here