Case BriefsSupreme Court

Supreme Court: The bench of MR Shah* and BV Nagarathna, JJ has held that in a case where on the date of commencement of Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, no award has been declared under Section 11 of the Act, 1894, due to the pendency of any proceedings and/or the interim stay granted by the Court, such landowners shall not be entitled to the compensation under Section 24(1) of the Act, 2013 and they shall be entitled to the compensation only under the Act, 1894.

It was argued before the Court that there is no express provision in Section 24, that excludes the period during which any interim order was operative, preventing the State from making an award. The Court, however, rejected the contention and held that preventing the State from taking the possession of acquired land or from giving effect to the award, in a particular case or cases, cannot result in the inclusion of such period or periods for the purpose of reckoning the period of five years.

It cannot be disputed that there shall be a very huge difference between the quantum of compensation payable under the Act, 1894 and the compensation payable under the Act, 2013. It cannot be said that there was any inaction on the part of the Authority in not declaring the award because of the interim order passed by the Court.

“Therefore, should the State and the Public Exchequer be made to suffer when there is no inaction on the part of the Authority in declaring the Award? The intention of the Parliament while enacting Section 24(1) of the Act, 2013 cannot be to give benefit to a litigant, who has obtained a stay order and because of that the award could not be declared and thereafter the litigant may be awarded the compensation as per Act, 2013. It may even result in discrimination between the landowners, whose lands have been acquired under the same notification.”

Stating that no party could take advantage of a litigation, the Court held that the principle of restitution is a statutory recognition of the rule of justice, equity and fair play. The court has inherent jurisdiction to order restitution so as to do complete justice. This is also on the principle that an unsuccessful litigant who had the benefit of an interim order in his favour cannot encash or take advantage of the same on the enforcement of the Act, 2013 by initially stalling the acquisition process and later seeking a higher compensation under the provisions of Act, 2013.

The Court, hence, observed that

“If at the instance of a landowner, who has challenged the acquisition, an interim order has been passed by a Court is successful then the proceeding of acquisition or the acquisition notification would be quashed. Then there would be no occasion to determine any compensation. But on the other hand, if a landowner, who has the benefit of an interim order in his favour whilst a challenge is made to the acquisition, is unsuccessful, he cannot then contend that he must be paid compensation under the provision of the Act, 2013 on its enforcement, whereas a landowner, who did not have the benefit of any interim order is paid compensation determined under the provisions of the Act, 1894, which is lesser than what would be computed under the Act, 2013.”

[Faizabad-Ayodhya Development Authority v. Dr. Rajesh Kumar Pandey, 2022 SCC OnLine SC 679, decided on 20.05.2022]


*Judgment by: Justice MR Shah


Case BriefsSupreme Court

Supreme Court: In a case where the Bombay High Court had directed Kolhapur Municipal Corporation to acquire an unusable land under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 and compensate the landowners, the bench of MR Shah* and BV Nagarathna, JJ has held that when land is found to be unsuitable and unusable for the purposes for which it has been reserved, Corporation cannot be compelled to pay a huge compensation for such a useless and unsuitable land.

The dispute is with respect to the land ad-measuring 3 Hectors and 65 Ares in Kolhapur. The development plan for the City of Kolhapur was sanctioned on 18.12.1999. Different portions of the land in question were reserved in the sanctioned development plan for various public purposes namely, parking, garden, extension of sewage treatment plant etc. By Resolution dated 18.02.2012, the General Body of the Municipal Corporation resolved to acquire the said property and accordingly on 17.04.2012, a proposal was submitted by the Municipal Corporation to the State Government for compulsory acquisition of the subject property.

However, the subject land is flood affected through which a rivulet named ‘Jayanti Nala’ passes, making it unsuitable for the public purposes for which it was reserved. Further, it was argued that unless and until the substantial development is carried out, the land in question was not usable at all. The reserved area is coming within High Flood Line and every year for a period of fifteen days to one month, the said area gets flooded during rainy season.

As the land in question was not acquired and/or used for the public purposes for which the same was reserved under the sanctioned development plan, the original landowners served a notice under Section 127 of the Maharashtra Regional and Town Planning Act, 1966.

It is also to be noted that the reservation had lapsed as a mere Resolution being passed by the General Body of the Corporation to acquire the land and sending a letter to the Collector to acquire the land, without any further steps being taken under the Land Acquisition Act, namely no declaration under section 6 thereof being issued within a period of one year from the receipt of the said purchase notice, would result in the reservation as deemed to have lapsed.

The Supreme Court observed that once the reservation of land under the Development Plan is deemed to have lapsed by operation of law and it is released from reservation, no writ of Mandamus could have been issued by the High Court directing the Corporation to still acquire the land and to issue a declaration under Section 19 of the Act of 2013 (as in the meantime, the Land Acquisition Act, 1894 has been repealed and Act of 2013 has been enacted).

“Once by operation of law, the reservation is deemed to have lapsed, it is lapsed for all purposes and for all times to come.”

The Court also held that the High Court was not justified in directing the Municipal Corporation to acquire the land in question and to issue a declaration under Section 19 of the 2013 Act and to pay compensation under the Act of 2013 as right from the very beginning it was stated in the counter before the High Court that the land in question was not suitable and/or usable for the purposes for which it has been reserved.

“… as such at the time when the planning was made and the land in question was put under reservation for public purposes, a duty was cast upon the Planning Officer to consider whether the land, which will have to be acquired and for which the compensation is to be paid is really suitable and/or usable for the public purposes for which it is reserved. Otherwise, every landowner will see to it that though his land is not suitable and/or not very valuable, is put under reservation and the same is acquired by the Corporation and/or the Planning Authority and thereafter he is paid the compensation.”

It was, hence, held that no Corporation and/or the Planning Authority and/or the Appropriate Authority can be compelled to acquire the land which according to the Corporation/Planning Authority is not suitable and/or usable for the purposes for which it is reserved. Any other interpretation would lead to colourable and fraudulent exercise of power and cause financial burden on the public exchequer.

Under the Act of 2013, the Corporation was required to pay a huge sum of Rs. 77,65,12,000/- by way of compensation under the Act of 2013. According to the Corporation, when the entire annual budget for acquisition was Rs. 21 crores, it was beyond their financial position and/or budgetary provision to pay such a huge compensation, that too, for the land which is not suitable and/or useable for the purposes for which it has been reserved.

In such circumstances, the Court observed that while under MRTP Act, the financial constraint cannot be the sole consideration to acquire the land for the purposes for which it has been reserved namely public purposes, however, at the same time, when such a huge amount of compensation is to be paid and there would be a heavy financial burden, which as such is beyond the financial capacity of the Corporation, such a financial constraint can be said to be one of the relevant considerations, though not the sole consideration before embarking upon reservation of a particular extent of land for development.

The Court also held that a landowner is entitled to TDR in lieu of compensation with respect to the land reserved provided the land to be acquired is suitable and/or usable by the Corporation. However, once it is found that the land is not usable and/or suitable for the purposes for which it has been reserved, the Corporation cannot still be compelled and directed to acquire the land and grant TDR in lieu of amount of compensation.

[Kolhapur Municipal Corporation v. Vasant Mahadev Patil, 2022 SCC OnLine SC 179, decided on 14.02.2022]


*Judgment by: Justice MR Shah


Counsels

For Corporation: Senior Advocate Aparajita Singh

For Original Landowners: Senior Advocate C.U. Singh

Case BriefsSupreme Court

Supreme Court: In an important ruling on Land Acquisition and Requisition law, the bench of AM Khanwilkar and Sanjiv Khanna*, JJ has held that Section 25 of the 2013 Act applies to awards made under Section 24(1)(a) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 and the period of limitation of twelve months would commence from 1st January 2014.

“In cases covered by clause (a) to Section 24(1) of the 2013 Act, the limitation period for passing/making of an award under Section 25 of the 2013 Act would commence from 1st January 2014, that is, the date when the 2013 Act came into force. Awards passed under clause (a) to Section 24(1) would be valid if made within twelve months from 1st January 2014.”

Issue

Whether the two-year period specified under Section 11A of the Land Acquisition Act, 1894 will apply even after the repeal of the 1894 Act, or the twelve-month period specified in Section 25 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 will apply for the awards made under clause (a) of Section 24(1) of the 2013 Act?

Discussion

Interpretation of “all the provisions of this Act relating to the determination of compensation” under clause (a) to Section 24(1) of the 2013 Act

Generally, the expression ‘relating to’ when used in legislation has to be construed to give effect to the legislative intent when required and necessary by giving an expansive and wider meaning. Keeping this in mind, the Court noticed that the words “all the provisions of this Act relating to the determination of compensation” must not be imputed a restricted understanding of the word ‘relating’ only to the substantial provisions on calculation of compensation, that is, Sections 26 to 30 of the 2013 Act. Rather, the expression should be given an expansive meaning so as to include the provision on limitation period for calculation of compensation, that is, Section 25 of the 2013 Act.

Further, the said clause would apply only if the period for making of an award had not ended and time was available as on 1st January 2014. Where and if the period for making of the award had already lapsed before 1st January 2014, clause (a) to Section 24(1) would not apply so as to deprive and deny the vested rights which have already accrued in favour of the landowners.

“Section 25 is a rule of procedure immediately following Section 24 and a part of fasciculus of “all the provisions”, from Sections 25 to 30, “relating to determination of compensation”. Hence, the expression “all the provisions relating to the determination of compensation” under the 2013 Act will encompass Section 25 of the 2013 Act.”

The determination of compensation is never simple. It is a complex factual and legal exercise.

Two-year period for making of an award in terms of Section 11A of the 1894 Act – If Practical

Given the object and purpose behind Sections 24, and 26 to 30 of the 2013 Act, the Court noticed that practical absurdities and anomalies may arise if the two-year period for making of an award in terms of Section 11A of the 1894 Act commencing from the date of issue of the declaration is applied to the awards to be made under Section 24(1)(a) of the 2013 Act.

This would mitigate against the underlying legislative intent behind prescription of time for making of an award in respect of saved acquisition proceedings initiated under the repealed 1894 Act, which is two-fold:

  • to give sufficient time to the authorities to determine compensation payable under the 2013 Act; and
  • to ensure early and expedited payment to the landowners by reducing the period from two years under Section 11A of the 1894 Act to twelve months under Section 25 of the 2013 Act.

In case of declarations issued in January 2012, on application of Section 11A of the 1894 Act, the time to determine compensation under the 2013 Act would vary from a day to a month, and while in cases where the declarations were issued within twelve months of the repeal of the 1894 Act, the landowners would be at a disadvantage as an award beyond the twelve-month period specified in Section 25 of the 2013 Act would be valid.

In the first set of cases, given the onerous factual and legal exercise involved in determination of compensation and the need to issue notification under Section 26(2) of the 2013 Act, publication of the awards would be impractical. Hasty and incorrect awards would be deleterious for the landowners.

If the awards are not pronounced, the acquisition proceedings would lapse defeating the legislative intent behind Section 24(1)(a) of the 2013 Act to save such proceedings.

Exercising it’s choice to arrive at a just, fair and harmonious construction consistent with the legislative intent, the Court noticed that a rational approach so as to further the object and purpose of Sections 24 and 26 to 30 of the 2013 Act is required.

“We are conscious that Section 25 refers to publication of a notification under Section 19 as the starting point of limitation. In the context of clause (a) to Section 24(1) of the 2013 Act there would be no notification under Section 19, but declaration under Section 6 of the 1894 Act. When the declarations under Section 6 are valid as on 1st January 2014, it is necessary to give effect to the legislative intention and reckon the starting point. In the context of Section 24(1)(a) of the 2013 Act, declarations under Section 6 of the 1894 Act are no different and serve the same purpose as the declarations under Section 19 of the 2013 Act.”

Conclusion

Consequently, the Court held that in cases covered by clause (a) to Section 24(1) of the 2013 Act, the limitation period for passing/making of an award under Section 25 of the 2013 Act would commence from 1st January 2014, that is, the date when the 2013 Act came into force. Awards passed under clause (a) to Section 24(1) would be valid if made within twelve months from 1st January 2014. This dictum is subject to the caveat stated that a declaration which has lapsed in terms of Section 11A of the 1894 Act before or on 31st December 2013 would not get revived.

(i)Section 25 of the 2013 Act would apply to the awards made and published under Section 24(1)(a) of the 2013 Act.

(ii) The limitation period for passing/making of an award under Section 24(1)(a) in terms of Section 25 of the 2013 Act would commence from 1st January 2014, that is, the date when the 2013 Act came into force.

(iii) Period during which the Court order would inhibit action on the part of the authorities to proceed with the making of the award would be excluded while computing the period under Section 25 of the 2013 Act.

[Executive Engineer, Gosikhurd Project Ambadi, Bhandara, Maharashtra Vidarbha Irrigation Development Corporation v. Mahesh, 2021 SCC OnLine SC 1034, decided on 10.11.02021]


*Judgment by: Justice Sanjiv Khanna

Know Thy Judge | Justice Sanjiv Khanna

Telangana High Court
Case BriefsHigh Courts

Telangana High Court: A Division Bench of M.S. Ramachandra Rao and K. Lakshman, JJ., allowed the petitions which were filed in regard with the issues relating to (a) payment of lawful compensation under the provisions of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 to the petitioners for depriving them of their agricultural lands and structures thereon and (b) also for compensation in lieu of Rehabilitation and Resettlement under Section 31-A introduced in the Act by the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Telangana Amendment) Act, 2016.

The State of Telangana had initiated the Kaleswaram Irrigation Project under which it proposed to construct many reservoirs downstream. The lands of the petitioners before the Court, who are small farmers owning small extents of land and eking out their livelihood doing agriculture, were acquired by the State for the purpose of Ananthgiri Sagar reservoir which is also a component of the Kaleswaram irrigation project. Although the Bench was familiar to the fact that  water from these reservoirs (from the river Godavari) would be supplied and utilised in more than 10 districts for agriculture purpose, besides covering the supply of drinking water to the State of Hyderabad. The Bench believed it to be a prestigious project conceived in public interest however there was unequal bargaining power with the respondents and the petitioners who were small farmers and in the present cases too the choice given to them was unfair, unreasonable and unconscionable.

Thus, the Bench declared that the agreement was vitiated by coercion, that they were unconscionable and consequently unenforceable invoking Section 19 and 23 of the Contract Act, 1872. The Court also held that the action of the State was also violative of Article 14 and 300-A of the Constitution of India. Taking their respective dates of dispossession as the date of Section 11(1) notification (issued in July, 2015), the bench ruled that the petitioners would be entitled to compensation as if their lands had been acquired under the new LA Act of 2013. Requiring such compensation to be paid within 3 months, the bench also ordered the state to pay costs of Rs 2,000 to each of the petitioners.

The Court held that the petitioners were entitled not only to the compensation but also the lump sum amount towards rehabilitation and resettlement as per Section 31(A).

The Court further directed that amounts already paid to petitioners shall not be recovered by the respondents and shall be adjusted by the State towards the compensation found payable to the petitioners after such compensation for land is determined strictly in accordance with the procedure prescribed in Act of 2013. The Court dispelled the State Government’s argument of lack of urgency in posting the matter for final hearing Via Video Conferencing Amidst the Lockdown and further in its opinion, issues relating to adequate payment of compensation to land losers and their Rehabilitation and Resettlement cannot be postponed in the manner suggested by the Advocate-General, when,

(a) the very purpose of the Act 30 of 2013 is to lessen the hardship of owners of land;

(b) Section 38 in fact mandates that the land owner can only be dispossessed by the Collector after ensuring full payment of compensation as well as rehabilitation and resettlement entitlements are paid or tendered to the entitled persons within a period of three months for the compensation and a period of six months for the monetary part of rehabilitation and resettlement entitlements listed in the 2nd Schedule to the Act;

(c) the 2nd proviso to Section 38 states that in case of acquisition of land for irrigation or hydel project, the rehabilitation and resettlement shall be completed six months prior to submergence of the lands acquired; and

(d) it is admitted in para 2 of the Memo that the previous Bench presided over by the Chief Justice had permitted the State to release water into the subject lands which were acquired for the purpose of Kaleswaram Lift Irrigation Project (Order dt. 01.05.2020 in W.P. No. 35059 of 2017, 7549, 10393 and 11714 of 2019) (the Anatagirisagar reservoir was inaugurated on 24.4.2020 itself) , and consequently the lands of the petitioners would be submerged and result in their dispossession

The learned Advocate-General cannot contend that this Bench should ignore the mandate of the statute contained in the 2nd proviso to Section 38, that it should also ignore the timelines specified in it including the timeline for rehabilitation and resettlement mentioned in the 2nd proviso to ensure Rehabilitation and resettlement 6 months before submergence of the lands acquired and simply adjourn the matter to an unknown future date.

The Bench while allowing the petitions directed that the exercise of re-determination of compensation for lands, structures and determination of the lump sum Rehabilitation and Resettlement under Section 31-A of the Act to each of the petitioners as directed above as well as payment of the same shall be made within 3 months by the respondents taking into account the amounts already received by the petitioners; and that the 1st respondent shall also pay costs of Rs 2,000 to each of the petitioners. [Merugu Narsaiah v. State of Telangana, 2020 SCC OnLine TS 536 , decided on 03-06-2020]

Case BriefsHigh Courts

Allahabad High Court: A Division Bench of Shashi Kant Gupta and Pankaj Bhatia, JJ. allowed a writ petition in a matter related to the construction of a public road on the land of the petitioner.

The grievance of the petitioner in the instant case was that, the respondent authorities were constructing a public road over the land of the petitioner without acquiring the land lawfully. The land in question was acquired by the State, and no compensation was given to the petitioner.

The Chief Standing Counsel from the side of the respondents contended that the Government Order dated 12-05-2016 provided that when the land was being acquired without giving any compensation, the matter would be considered by the Committee as constituted under the said Government Order and the committee after examining the matter, would submit its report within a period of two months before the concerned District Magistrate, who will act upon that report within one month thereafter.

The Court after considering all the relevant facts and circumstances directed the petitioner to file representation in terms of the Government Order dated 12-05-2016 before the Committee as constituted under the said Government Order. Apart from this, it also recorded its strong displeasure on the trend of taking possession of the private land of the citizens without an acquisition or giving any compensation to them. It declared this practice unsound in terms of contravention to Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 and in violation of Articles 14 and 300-A of the Constitution of India.

The Court held, “Compulsory acquisition without acquiring the land or making any payment of the property belonging to a private individual is a serious matter having grave repercussions on his constitutional right of not being deprived of his property without sanction of law.”

In view the above, the Court directed the Chief Secretary, Government of Uttar Pradesh to ensure that action be taken against the erring officials who take the possession of the land from the owners illegally without adhering to the statutory provisions.[Gayatri Devi v. State of Uttar Pradesh, Writ- C No. 14473 of 2019, decided on 09-05-2019]