'All Parties Didn't Consent To Settlement', Supreme Court Sets Aside Lok Adalat Award In Land Acquisition Dispute

The Supreme Court on Wednesday (August 19) set aside Lok Adalat awards passed in a land acquisition dispute, holding that the awards could not be sustained as they did not reflect a genuine agreement under Section 29 of the Land Acquisition Act, 1894, since all the disputing claimants were neither parties nor signatories to the settlement.

“…the High Court in its impugned judgment erred in upholding the awards passed by the Lok Adalat. The awards do not reflect a genuine agreement under Section 29 of the Act, 1894, since all disputing claimants were not parties or signatories thereto.”, observed a bench of Justice JB Pardiwala and Justice Manoj Misra.

The case arose from the acquisition of land in Kommepalli Village for mining operations of Singareni Collieries Company Ltd. The Land Acquisition Officer passed an award in 2013 determining compensation at ₹3,48,935 per acre. As disputes existed regarding the persons entitled to the compensation and its apportionment, the matter was referred to the District Judge under Sections 30 and 31 of the 1894 Act.

During the pendency of related proceedings, a coordination meeting was held in 2015, where it was proposed that the disputes be resolved through Lok Adalat. The Lok Adalat subsequently passed 16 awards concerning the acquired land. Several claimants challenged the awards, contending that the settlement did not include all persons who were disputing their entitlement to the compensation.

Aggrieved by the High Court's dismissal of the Appellants' challenge to the Lok Adalat award, an appeal was filed before the Supreme Court.

Setting aside the High Court's decision, the judgment authored by Justice Pardiwala noted that the High Court had failed to appreciate that the awards did not represent a valid settlement under Section 29 because all the disputing claimants had not participated in the settlement or signed the awards.

“The challenge to awards passed by the Lok Adalat in the second writ petition was on the ground that the appellants-claimants did not consent to the settlement drawn by the Lok Adalat. Further, although the challenge to the said awards was pending, yet the High Court, in the third writ petition, directed disbursement of compensation.”, the Court said, pointing out that the High Court erred in directing the disbursement of the compensation awarded by the Lok Adalat.

“If at all the Lok Adalat awards were intended to reflect an agreement under Section 29, or a standalone agreement, it could be said to be valid only if concurred by all persons interested in the apportionment, as the particulars of apportionment as mentioned in the award drawn by the Collector is conclusive between the persons who have expressed their agreement in the apportionment.”, the Court added, emphasising that a settlement involving only some of the claimants cannot be treated as an agreement binding upon persons who were not parties to it.

As a result, allowing the appeal, the Court set aside the High Court's judgment and the Lok Adalat awards and remitted the matter to the District Judge for a de novo hearing of the reference.

The Court directed that all concerned parties be duly put to notice and that the proceedings be completed, as far as possible, within six months from the date of pronouncement of the judgment.

“…we have reached the conclusion that we should set aside the impugned judgment and order passed by the High Court and remit the matter to the Court of Principal District Judge, Khammam, for de novo hearing of reference as expeditiously as possible, not later than six months from the date of the pronouncement of this judgment, by duly putting all the parties concerned to notice in accordance with law. The Court must decide the apportionment reference uninfluenced by any observations. We accordingly pass such order.”, the Court noted.

Headnote

Land Acquisition Act, 1894 — Sections 29, 30, and 31 — Apportionment of Compensation — Reference to Civil Court — Modes of Resolving Apportionment Dispute - There are only two modes under the statutory scheme to resolve disputes regarding the apportionment of compensation - (i) under Section 29, where persons interested arrive at an agreement among themselves; and (ii) under Section 30, where in the absence of an agreement, the Collector refers the dispute to the principal Civil Court of original jurisdiction for adjudication - An agreement under Section 29 strictly requires the concurrence of all persons interested - A partial or truncated consensus involving only some claimants cannot take effect as an agreement under Section 29, as those excluded remain in dispute -Making a reference under Section 30 is an explicit acknowledgment by the Collector of a prima facie dispute as to title and apportionment, which the Collector is not empowered to adjudicate - Once compensation is deposited in Court, the Collector/acquiring body exits the arena, and the dispute survives solely between the rival claimants. [Relied On Dr. G.H. Grant v. State of Bihar, 1965 SCC OnLine SC 51; Sharda Devi v. State of Bihar, (2003) 3 SCC 128; Paras 28-46]

Land Acquisition — Determination of Entitlement — "Enjoyment Survey" Has No Legal Sanction — Mere Physical Possession Cannot Substitute Legal Title - An "enjoyment survey" conducted to record the state of physical occupation on the acquired land has no statutory basis under the law for determining entitlement to compensation - Such a survey merely captures physical occupation at the time it is conducted and is incapable of examining legal title, lawful right, or the nature of possession (e.g., assignee, permissive possessor, encroacher, or trespasser) - Public funds disbursed towards land acquisition cannot be released merely to a person found in physical possession or who is the most vocal or visible before authorities; it must be paid to the person legally entitled in accordance with law - Apportionment based solely on an enjoyment survey is unsustainable in law. [Relied On Gudala Pentamma v. State of Telangana, 2026 SCC OnLine TS 6654; Kottamula Mallaiah v. State of Telangana, W.P. No. 2118/2023; Paras 40-44]

Legal Services Authorities Act, 1987 — Section 19(5) read with Regulation 17(2) of National Legal Services Authority (Lok Adalat) Regulations, 2009 — Validity and Enforceability of Lok Adalat Award — Mandatory Requirement of Signatures and Consent of All Disputing Parties - A Lok Adalat award is binding only on the parties who entered into a settlement accepted by both sides - Under Regulation 17(2) of the NALSA (Lok Adalat) Regulations, 2009, an award must bear the signatures of the parties to the settlement - Where a dispute regarding title and apportionment under Section 30 of the Land Acquisition Act, 1894 is referred, individual awards passed by the Lok Adalat without recording terms of compromise among the rival claimants, and without the presence or signatures of all disputed title holders, are invalid, non-binding, and void against non-signatory claimants - Lok Adalat awards drawn as if the dispute were merely between the Land Acquisition Officer/acquiring body and an individual interest-holder cannot extinguish or resolve the inter se title disputes of rival claimants. [Relied On Vasant Nanaji Patre v. Vidarbha Irrigation Development Corporation & Ors., Civil Appeal No. 5305/2025; Paras 37-52;]

Code of Civil Procedure, 1908 (CPC) — Order I Rule 8 — Inapplicability of Representative Suit / Class Action Principles to Inter Se Title and Apportionment Disputes Before Lok Adalat - Order I Rule 8 of the CPC presupposes a "community of interest" among the persons represented, wherein the interest of all is common and adequately protected by the representatives - It cannot be applied to proceedings where the very subject matter is an adverse, conflicting claim between the claimants themselves - The High Court erred in characterizing Lok Adalat awards as akin to a settlement in a class action suit under Order I Rule 8 - Treating rival claimants as a single class elides the very title dispute referred under Section 30 of the Land Acquisition Act, 1894, as rival claimants do not share a common adversary or a representative common interest. [Paras 47-50]

Cause Title: SINGAPOGU BABU RAO & ORS. VERSUS SPECIAL DEPUTY COLLECTOR (LAND ACQUISITION) & ORS.

Citation : 2026 LiveLaw (SC) 831

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Appearance:

For Petitioner(s) Mr. Sridhar Potaraju, Sr. Adv. Mr. Gaichangpou Gangmei, AOR Mr. Gaichangpou Gangmei, Adv. Mr. Arjun D. Singh, Adv. Mr. Aayush, Adv. Mr. Rajat Srivastava, Adv. Mr. Lalit Mohan, Adv. Ms. Nisha Pandey, Adv. Mr. Ishat Singh, Adv. Mr. Maitreya Mahaley, Adv.

For Respondent(s) Mr. Anurag Dayal Mathur, Adv. Mr. P. Parmeswaran, AOR Mr. Siddhartha Sinha, AOR Mr. Ayush Anand, AOR Mr. Siddharth Nayak, Adv. Mr. Raghav Khanna, Adv. Mr. Vibhu Tripathi, Adv. Mr. Monu Kumar, Adv.