Excessive Land Acquisition Compensation To Some Landowners Cannot Invalidate Others' Compensation : Supreme Court

The Supreme Court on Tuesday (January 27) observed that an excessive disbursement of compensation to some beneficiaries in collusion with officials would not invalidate the compensation awarded to other beneficiaries.

A bench of Justices Sanjay Kumar and K Vinod Chandran heard the case arising out of the Chhattisgarh High Court's decision that had set aside the land acquisition compensation awarded in favour of the Appellant, merely because excessive compensation was disbursed to a handful of people.

The case arose from the acquisition of land for the Rowghat–Jagdalpur railway line, notified in August 2017. Compensation awards were passed on February 12, 2018, in favour of around 550 landowners. Following an inquiry by the Collector, it was alleged that a handful of landowners had received compensation far in excess of market value in collusion with revenue officials. FIRs were lodged against those officials and specific beneficiaries.

Dissatisfied with the compensation awarded to him, the Appellant had approached the Arbitrator under the Land Acquisition (Special Railway Projects) Rules, 2016. His claim was enhanced by an arbitral award. Despite this, the High Court, while dealing with writ petitions arising out of the inquiry to which the Appellant was not the party, kept the enhanced amount in abeyance and later set aside the compensation, treating them as part of a tainted process, prompting the Appellant to move to the Supreme Court.

Setting aside the impugned decision, the judgment authored by Justice Chandran called the High Court's approach unsustainable, stating that the allegations of unjust enrichment against a few landowners cannot be used to invalidate the lawful entitlements of others who were never implicated in any inquiry or criminal proceedings.

Since only five landowners were alleged to have received the excessive compensation, and the Appellant was not amongst them, the Court said it would be unjustified to set aside the entire compensation, when no such “allegations having been raised in the inquiry report of the Collector against the award, qua the appellant herein.”

“We cannot but observe that while the arbitral award and the initial award were set aside the learned Single Judge ought to have noticed that the challenge is only against the five respondents impleaded therein and the setting aside, can affect only them.”, the court observed.

Accordingly, the appeal was allowed, and the award determined by the arbitral tribunal was restored.

Cause Title: Niraj Jain Versus Competent Authority-cum-Additional Collector, Jagdalpur & Ors.

Citation : 2026 LiveLaw (SC) 83

Click here to download judgment

Appearance:

Mr. Shoeb Alam, Senior Counsel for the appellant,

Mr. Brijender Chahar, Additional Solicitor General, Mr. Nachiketa Joshi, Senior Counsel and Mr. Tushar Mehta, Deputy Advocate General for the respondents.