Land Acquisition: Delay in paying Compensation to the Land Owner by the State is an act of Carelessness and Callousness: SC [Read the Judgment]

Land Acquisition: Delay in paying Compensation to the Land Owner by the State is an act of Carelessness and Callousness: SC [Read the Judgment]

Terming the delay occasioned by the State in paying compensation to a land owner as an act of "carelessness and callousness", a bench of the Supreme Court of India comprising of Justice Vikramjit Sen and Justice Abhay Manohar Sapre set aside the land acquired in Bihar's Khagaria district way back in 1987 for construction of government quarters by invoking the urgency clause (Section 17) of the Land Acquisition Act, 1894. The Apex court ruled (Laxami Devi vs. State of Bihar & Ors. CIVIL APPEAL No. 3385 OF 2012)that the urgency clause of the Act cannot be interpreted in such a way that the landowners will have no protection, even if they are not paid full compensation for their land for decades.

The Apex Court held unambiguously that the consequence for delay in awarding compensation in land acquisition by the governments has to be borne by the "errant state" and not the "innocent land owners", the Supreme Court today said.


The Court said that it was a ‘regrettable  reality’  that  Governments  are increasingly relying on rulings of the Court to the  effect  that  even  if the public purpose providing the predication for the compulsory  acquisition of a citizen’s land has proved to be an illusion or  misconception,  another purpose  can  conveniently  be  discovered  or  devised  by  the  State  for retention by it of the expropriated land.

The Bench said it was determined to insulate genuinely  urgent  projects  from  lapsing  and  not   to   annihilate  the constitutional rights of the individual from the might  of  the  State  even though  it  transgresses  the  essence  of  the  statute. "It has become alarmingly commonplace for lands to be expropriated under the banner of urgency or even under the normal procedure, only to be followed by a withdrawal or retraction from this exercise enabling a favoured few to harvest the ill-begotten windfall," the Court added.

The Bihar Government had by  means  of  Notification  No.2/86-87  dated 18.11.1987 and  3/86-87  dated  18.11.1987  initiated  steps  for  acquiring tracts  of  lands  in  Mouza  Sansarpur  and   in   Hardas   Chak.     These Notifications had simultaneously excluded the provisions of  Section  5A  of the L.A. Act from applying to the acquired  lands. The notification inter alia provided : “whereas it is the opinion of the Governor of Bihar that the  above mentioned barren land/agricultural land and its part  thereof  is  necessary for immediate acquisition.  Therefore, it is directed under  sub  section  4 of the section 17 of the above Act that the provisions of the section 5A  of the above act shall not apply to the above land/lands”

This first Notification  under  Section  4  came  to  be  followed  by several subsequent Notifications indicating that the preceding Notification had lapsed by operation  of the statute.

The Government issued a Notification  under  Section  4 of the L.A. Act on 16.9.1999  in  respect  of  which  the  land owners  filed Objections  under  Section  5A  on  a  consideration  of  which   the   Land Acquisition Officer had opined that the Notification issued  in  1987  could not be  continued  with  as  the  Award  had  not  been  passed  within  the stipulated time period  thereby  making  it  necessary  to  issue  the  1999 Notification. This Notification also expired because a  Declaration  under Section 6 had not been  promulgated  within  one  year.  Hence yet another Notification was published on 13.8.2001, for which the Appellants filed their Objections under Section 5A yet again. This Notification also lapsed, since the sequence of events as contemplated in the L.A. Act had not been duly completed.  Once  again,  in  2004,  fresh  steps  were  initiated  for acquisition which also expired for the same  reason.

Within  a  week  of  the publication of the Section 4 Notification, that is  on  24.11.1987,  notices under Section 17(1) of the L.A. Act were also issued, which resulted in  the filing of writ petitions in the following year, in which  it  was  contended that resort to  Section  17  of  the  L.A.  Act  was  mala  fide,  and  that compensation, as  envisaged  in  the  statute  itself,  had  not  even  been tendered to the owners. In CWJC No.4007  of  1988,  a Division Bench of the High Court of Judicature  at  Patna  directed  on 12.7.1988 that the Award for compensation must be made within  four  months.

The  Writ  Petition  was disposed of observing - (i)  possession of the land had already  been  taken

by the State; (ii) eighty  per  cent  compensation  had  been  paid  to  the Appellants; (iii) the remainder twenty per cent along  with  interest  would be paid to the owners  on  their  appearance  before  the  Land  Acquisition Officer; (iv) they would be entitled to raise  the claim of higher  interest considering that the land had been acquired in 1987; and (v)  Appellant  was entitled to raise objections with respect to the  value  of  the  land.

But no Award was passed by the State under Section 11 of the LA Act even though  the  direction of the High Court  had  attained  finality. [Section 11A prescribes  a limitation of two years for the making of an Award by the Collector.’

The land owner contended before the Apex Court that the incontrovertible position that portions of the  land have remained unutilized for decades is clearly indicative of the fact  that they are not required  by  the  State  any  more.

The State contended that the subject acquisition stands completed in all respects, which led to the Court remarking that it was “endeavouring,   illegally   in   our considered opinion, to avoid performance of their statutory  obligations  of computing compensation and then paying it.” The version of the  State was that  large parcels of these lands  have  been  utilized  for  constructing  residential quarters for senior Officers of the State, and that the Appellant  has  been paid  eighty  per  cent  of  the  compensation,  although  twenty  per  cent supposedly still remains outstanding. Reliance was placed by the State on  Satendra  Prasad Jain vs. State of U.P. (1993)  4  SCC  369  and  Lt.  Governor  of  Himachal Pradesh v. Avinash Sharma (1970) 2 SCC 149

The Court rejected the contention of the appellants that the land should  revert to them under Section 11A, since an Award under Section  11  has  still  not been made despite the passage of almost three decades from the date  of  the subject Notification.  The Bench said, “once  land  has vested in the State, the  question  of  re-vesting  its  possession  in  the erstwhile landowners is no longer available as an option to the State.  This legal position was enunciated close to a half century ago in Avinash  Sharma and has been subsequently reiterated in numerous judgments.”

The Court held that “The Appellants herein are being denied  just  and  fair compensation for their land in proceedings which commenced in 1987,  despite the directions of the High Court passed as early  as  in  1988  to  pass  an award within four months.   The raison d’etre  behind  the  introduction  of Section 11A was for the landowners to have a  remedy  in  the  event  of  an award  not  being  passed  expeditiously.   If  Satendra  Prasad   Jain   is interpreted to mean that Section 11A  will  not  apply  to  any  acquisition under the urgency provisions, landowners such as the  Appellants  before  us will have no protection, even if they are not  paid  full  compensation  for their land for decades. This cannot  be  in  keeping  with  the  legislative intent behind this  Section.  Furthermore,  keeping  empirical  evidence  in sight, we make bold to  opine  that  circumstances  require  this  Court  to reconsider its view that even if the stated public  interest  or  cause  has ceased to exist, any other cause can substitute  it,  especially  where  the urgency provisions have been invoked.”

 The Bench said that it was imperative to distinguish between the setting aside of an acquisition and the reversion of possession  to  the  erstwhile  landowners. It said in the case at hand both need not go hand in hand. “In  allowing the acquisition of land that  the  Government  finds  necessary  to  be  set aside, we would not necessarily be holding  that  the  land  revert  to  the Appellants,  as  the  alternative  of  permitting  the  Government  to  keep possession  provided  it  re-acquires  the  land  with  a  new   Section   4 notification.  This  option,  particularly  in  the  present  factual matrix, does the least violence to the intent and content of the  L.A.  Act, in that it upholds Section 11A even in cases of acquisition  under  Section 17 while preserving the requirement of  Section  17  that  the  unencumbered possession of the land remain vested in the  Government.  It  also  protects the rights of the landowners, thus fulfilling the  intent  of  Section  11A, while allowing the Government  to  acquire  land  in  cases  of  emergencies without its title  being  challenged,  which  is  the  avowed  intention  of Section 17.”

Allowing the appeal, the Bench further said : "While we presently refrain from passing any orders or direction pertaining to or interfering with the possession of the Government over the subject land, the acquisition dated November 18, 1987 is set aside for non-compliance with the provisions of Section 11A of the L.A. Act.


"As all the subsequent Notifications by the Respondent State having lapsed, the Respondent State is directed to issue a fresh Section 4 Notification within six weeks from today. The Respondent State is restrained from contending that the land is no longer required by it or that it should revert to the Appellants. The Appeal is allowed in these terms," the bench said.

The Bench clarified  that  where  the  landowners  do  not  assail  the acquisition, it may be open to them to seek a mandamus for payment to  them, after a  reasonable  period,  of  the  remaining  compensation,  which  will thereupon metamorphose from a mere estimation  to  the  actual  compensation for the expropriation.

Read the Judgment here.