AP High Court Questions 50-Year Delay In Releasing Land Acquisition Compensation, Says State's Role Not Limited To Passing Award

The Andhra Pradesh High Court has directed the State authorities to pay land acquisition compensation awarded in 1976, along with interest at 12% per annum from the date of the award until payment, holding that failure to ensure payment of compensation after taking possession of land violates the constitutional guarantee under Article 300A. [2026 LiveLaw (AP) 127]

In doing so, the Court held that once compensation is determined under the Land Acquisition Act, 1894, the State has a duty to ensure that it is paid to the landowner without requiring any representation or request. Merely keeping the amount in revenue deposits does not absolve the State of its constitutional obligation.

Under the Land Acquisition Act, 1894, Section 12(2) requires the Collector to notify landowners of the award, while Section 31 requires the Collector to tender and pay the compensation to the persons entitled to receive it.

Justice B. Krishna Mohan disposed of a writ petition filed by a landowner whose land had been acquired in 1976 for distribution of house sites to members of the Vaddera community for government purposes.

Referring to recent Supreme Court decisions on the right to property, the Court observed:

"The fair and reasonable compensation is the sine qua non for any acquisition process. The right to property is now considered to be not only a constitutional or statutory right, but also a human right.Once the compensation has been determined, the same shall be paid immediately without any requirement of representation or request by the land owners and a duty is cast on the State to pay such compensation to the land losers, otherwise there would be a breach of Article 300-A of the Constitution. 

The State cannot abdicate its constitutional and statutory responsibility of payment of compensation by stating that its role is limited only to initiation of acquisition proceedings and passing of the award. The delay in payment of compensation to the land owners after taking away the ownership and possession of the subject land from them is in contravention to the spirit of the constitutional scheme of Article 300A and the idea of a welfare state. The constitutional discourse on compulsory acquisitions, has hitherto, rooted itself within the 'power of eminent domain'. Even within that articulation, the twin conditions of the acquisition being for a public purpose and subjecting the divestiture to the payment of compensation in lieu of acquisition were mandated"

The court also said that the value of money is based on the idea that money can be invested to earn a return, and that the purchasing power of money decreases over time due to inflation.

It said that what the petitioner could have bought with the compensation in 1976 cannot be done in 2026. Hence, the court said that it was of utmost importance that the determination of the award and disbursal of compensation in case of acquisition of land should be made with promptitude.

The petitioner contended that although an award was passed, no notice under Section 31 of the Land Acquisition Act, 1894 was served asking her to receive the compensation and, therefore, she never received the awarded amount.

The State contended that the acquisition proceedings had been completed in 1976, the petitioner had participated in the award enquiry through her representatives and raised objections to the acquisition, which were rejected before the award was passed.

It submitted that although several notices were subsequently issued calling upon the petitioner to receive the compensation, she failed to do so, following which the amount was remitted to the Revenue Deposits. The respondents further stated that the acquired land was later divided into house plots and allotted to beneficiaries of the Vaddera community.

Examining the record, the Court found that the entire acquisition process had been completed in the year 1976 under the 1894 Act and that notices had indeed been issued to the petitioner after the award asking her to receive the compensation.

However, it observed that the authorities merely kept the compensation in revenue deposits and failed to ensure that it was actually paid to the petitioner.

Holding that the acquisition had attained finality in 1976, the Court rejected the petitioner's attempt to invoke the provisions of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. It held that since the proceedings had concluded under the 1894 Act, the 2013 Act had no application.

Nevertheless, the Court held that the State's obligation to pay compensation continued despite completion of the acquisition proceedings and that delayed payment was contrary to Article 300A of the Constitution and the concept of a welfare State.

Accordingly, the Court directed respondent authorities to pay the awarded compensation of Rs. 31,377.75 with interest at 12% per annum from the date of the award (April 9, 1976) until the date of payment within two months.

It further directed that if the petitioner was entitled to any other statutory benefits under the Land Acquisition Act, 1894 as on the date of the award, the same should also be determined and paid with 12% interest within the same period.

Case Title: Kunisetty Hymavathy v. State of Andhra Pradesh, rep. by its Principal Secretary & Ors.

Case No.: W.P. No. 12704 of 2020

Counsel for the Petitioner(s) : Naresh Byrapaneni

Counsel for Respondent(s) : GP for Revenue, GP for Land Acquisition (AP)

Click Here To Read/Download Order

Citation: 2026 LiveLaw (AP) 127