Land Acquisition Act | Acquisition Lapses If 80% Compensation Not Paid Before Taking Possession U/S 17A: J&K&L High Court
LIVELAW NEWS NETWORK
9 April 2026 8:40 PM IST
The High Court of Jammu & Kashmir and Ladakh has held that where the State invokes urgency provisions under Section 17 of the Land Acquisition Act, 1990, but fails to comply with the mandatory requirement under Section 17-A of paying 80% compensation before taking possession, the acquisition proceedings lapse by operation of Section 11-B.
The Court was hearing an intra-court appeal filed by the Union Territory of J&K challenging the judgment of the writ court, which had quashed the acquisition proceedings relating to land acquired for the construction of an institute.
A Division Bench comprising Chief Justice Arun Palli and Justice Rajnesh Oswal observed: “The appellants have attempted to justify the award that they had resorted to urgency provisions contained in Section 17 of the Act, but nothing was brought to the notice of the Writ Court as well as this Court with regard to compliance of provisions contained in Section 17-A of the Act, which mandates the payment of 80% of the compensation to the land owners before taking possession of the land. Thus, once the mandate of Section 17-A of the Act has not been followed, this acquisition proceedings would lapse on account of the operation of Section 11-B of the Act”.
The dispute pertained to the acquisition of land for the construction of an ITI Complex under the Land Acquisition Act, 1990.
The respondents challenged the acquisition proceedings before the writ court on multiple grounds, including non-compliance with statutory requirements under Sections 4, 5-A and 9 of the Act.
It was contended that the notification under Section 4 was not properly published, that no effective opportunity of hearing was granted under Section 5-A, and that statutory notices were not served upon them despite their migrant status and known addresses.
The appellants, on the other hand, contended that the respondents had knowledge of the proceedings and had even filed objections, albeit belatedly. It was further contended that urgency provisions under Section 17 had been invoked and possession had been taken, following which the ITI Complex had already been constructed.
The writ court allowed the petition and quashed the acquisition proceedings, directing the initiation of fresh proceedings. This was challenged in the appeal.
The Division Bench undertook a comprehensive examination of the entire acquisition process and found multiple violations of mandatory statutory provisions.
The Court found a violation of Section 5-A, holding that no opportunity of hearing had been afforded to the respondents despite their objections being on record. It reiterated that the right under Section 5-A is valuable and cannot be treated as a mere formality.
Turning to the issue of limitation, the Court held that the award was passed beyond the statutory period of two years prescribed under Section 11-B. The declaration under Section 6 was issued on 14.01.2005, whereas the award was passed on 28.08.2007. The Court took note of what it called a “grave violation of Section 11-B of the Act… the award was passed… after more than two years of issuance of the declaration.”
The Court then examined the appellants' justification based on the invocation of urgency provisions under Section 17. It held that mere invocation of urgency cannot dispense with compliance with statutory safeguards.
It noted that Section 17-A mandates payment of 80% of the compensation before taking possession of the land. However, no material was placed on record to demonstrate compliance with this requirement.
The Court observed that Nothing was brought to the notice about compliance with the provisions contained in Section 17-A, which mandates the payment of 80% of the compensation before taking possession of the land.
The Court further held that non-compliance with Section 17-A renders the taking of possession legally unsustainable, and consequently, the invocation of urgency provisions cannot cure the defect of limitation under Section 11-B.
It also took note of the fact that the acquisition records had been destroyed in a fire, thereby depriving the appellants of the ability to establish procedural compliance.
At the same time, the Court acknowledged that the ITI Complex had already been constructed on the acquired land. In such circumstances, instead of directing restoration of land or fresh acquisition under the 2013 Act, the Court proceeded to mould the relief.
Relying upon Delhi Airtech Services Pvt. Ltd. v. State of U.P. (2022), the Court held that where possession is not taken in accordance with law due to non-compliance with Section 17(3-A), the proceedings are vitiated, but appropriate relief can be moulded to balance equities.
The High Court upheld the finding that the acquisition proceedings stood vitiated due to non-compliance with mandatory provisions of Sections 4, 5-A, 11-B and 17-A of the Act. However, considering that the ITI Complex had already been constructed, the Court modified the relief and directed the authorities to pass a fresh award.
It directed that 28.08.2007 (date of original award) shall be treated as the relevant date for the determination of market value, applying the yardsticks under the 1990 Act. Statutory benefits, including interest, were directed to be calculated from the date of taking possession, i.e., 03.07.2005.
The Court further held that the fresh award would give rise to a cause of action for seeking enhancement of compensation, if the respondents were dissatisfied. The entire exercise was directed to be completed within three months, failing which the respondents would be entitled to costs of ₹50,000.
Case Title: Union Territory of J&K v. Piaray Lal Tickoo
Citation: 2026 LiveLaw (JKL)