Search

CASE LAW DIGEST ON NEW LAND ACQUISITION ACT

Hon'ble Apex Court reported in (2014) 3 SCC 183: 2014 AIR SCW 787 (PUNE MUNICIPAL CORPORATION AND ANOTHER V. HARAKCHAND MISIRIMAL SOLANKI AND OTHERS)
"Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (30 of 2013), Section 24(2) - Land Acquisition At, 1894 (2 of 1894), Section 31 - Lapse of Land Acquisition Proceedings initiated under 1894 Act by virtue of Section 24(2) of RCTE Act 2013 - Acquisition Proceedings were initiated under 1894 Act and Award was passed - Landowners filed writ petition challenging Acquisition on ground that Award was made more than five years prior to commencement of 2013 Act and no compensation has been paid to owners nor amount of Compensation has been deposited in Court - Section 24(2) of 2013 Act, contemplates that where an award has been made five years or more prior to commencement of 2013 Act, but physical possession of land has not been taken or compensation has not been paid, such acquisition proceedings still stand lapsed - Award was made on 31.01.2008 and compensation amount was deposited in Government Treasury, since landowners did not receive compensation - Expression "compensation has not been paid" occurred in 2013 Act - Compensation shall be regarded as "paid" if Compensation has been offered to person interested and such compensation has been deposited in Court - Mere deposit of compensation amount in Government Treasury is of no avail and Land Acquisition proceedings deemed to have lapsed for non-compliance of Section 24(2) of 2013 Act." ………………… The argument on behalf of the Corporation that the subject land acquisition proceedings have been concluded in all respects under the 1894 Act and that they are not affected at all in view of Section 114(2) of the 2013 Act, has no merit at all, and is noted to be rejected. Section 114(1) of the 2013 Act repeals 1894 Act. Sub-section (2) of Section 114, however, makes Section 6 of the General Clauses Act, 1897 applicable with regard to the effect of repeal but this is subject to the provisions in the 2013 Act. Under Section 24(2) land acquisition proceedings initiated under the 1894 Act, by legal fiction, are deemed to have lapsed where award has been made five years or more prior to the commencement of 2013 Act and possession of the land is not taken or compensation has not been paid. The legal fiction under Section 24(2) comes into operation as soon as conditions stated therein are satisfied. The applicability of Section 6 of the General Clauses Act being subject to Section 24(2), there is no merit in the contention of the Corporation.

In a comparatively recent decision, this Court in Ivo Agnelo Santimano Fernandes and Ors. v. State of Goa and Anr. (2011) 11 SCC 506, relying upon the earlier decision in Prem Nath Kapur v. National Fertilizers Corpn. of India Ltd. (1996) 2 SCC 71, has held that the deposit of the amount of the compensation in the state's revenue account is of no avail and the liability of the state to pay interest subsists till the amount has not been deposited in Court.

Union of India and Ors v. Shiv Raj and Ors (2014) 6 SCC 564; In order to clarify the statutory provisions of the Act 2013 with respect to such lapsing, the Government of India, Ministry of Urban Development, Delhi Division, came up with a circular dated 14.3.2014 wherein on the basis of the legal opinion of the Solicitor General of India, it has been clarified as under:
“3. Interpretation of five years period:
“With regard to this issue viz., interpretation of five years period two situations have been envisaged in cases where the acquisition has been initiated under the Land Acquisition Act, 1894 viz., (1) parties whose lands have been acquired have refused to accept the compensation and (2) parties whose lands have been acquired having just parted with physical possession of the land. However, in both the above situations, as on 1.1.2014, the period of 5 years would not have ended and in such cases, the advisory seeks to clarify that the new law shall apply only if the situation of pendency continues unchanged for a period that equals to or exceeds five years. In my view, it should be further clarified that in none of the cases the period of five years would have elapsed pursuant to an award made under Section 11 from the date of commencement of the Act and that the benefit of Section 24(2) will be available to those cases which are pending and where during pendency, the situation has remained unchanged with physical possession not being handed over or compensation not having been accepted and the period equals to or exceeds five years.
4. Limitation:
As regards this item relating to the period spent during litigation would also be accounted for the purpose of determining whether the period of five years has to be counted or not, it should be clarified that it will apply only to cases where awards were passed under Section 11 of the Land Acquisition Act, 1894, 5 years or more prior to 1.1.2014 as specified in Section 24(2) of the Act, to avoid any ambiguity.
Since this legislation has been passed with the objective of benefiting the land-losers, this interpretation is consistent with that objective and also added as a matter of abundant caution that the period spent in litigation challenging an award cannot be excluded for the purpose of determining whether the period of five years has elapsed or not. If the possession has not been taken or compensation has not been paid due to the challenge to the land acquisition proceedings, the pendente lite period will be included to determine the five year period and including such period if the award was made five years or more prior to the commencement of the Act, then the said acquisition proceedings will be deemed to have elapsed and fresh proceedings, if so desired, will have to be initiated in accordance with the new Act.”
Court in the case of Sree Balaji Nagar Residential Association v. State of Tamil Nadu & Ors. 2014 (10) SCALE 388 held that Section 24(2) of the Act of 2013 does not exclude any period during which the land acquisition proceedings might have remained stayed on account of stay or injunction granted by any court. It was conclusively held that the Legislature has consciously omitted to extend the period of five years indicated in Section 24(2) of the Act of 2013 for grant of relief in favour of land owners even if the proceedings had been delayed on account of an order of stay or injunction granted by a court of law or for any reason.

Rajiv Choudhrie Huf vs Union Of India & Ors Civil Appeal No.8785 of 2013 decided on 10.12.2014 The plain wordings used by the Legislature under the provisions of Section 24(2) are made very clear and do not create any ambiguity or conflict. In such a situation, the court is not required to depart from the literal rule of interpretation, as held by this Court in the case of C.I.T., Mysore v. The Indo Mercantile Bank Ltd. AIR 1959 SC 713.

Bhargava & Associates Pvt.Ltd.& ... vs Union Of India & Ors Decided on 10 March, 2015 - CIVIL APPEAL NO. 5126 of 2008. In the event that there is no ambiguity that (a) the Award is over five years old and (b) that compensation has not been paid or (c) that possession of the land has not been taken, the acquisition is liable to be quashed.
Radiance Fincap (P) Ltd. v. Union of India & Ors. [Civil Appeal No. 4283 of 2011 decided on 12.01.2015] that the Ordinance shall have prospective operation only. This Court therein held as under: "The right conferred to the land holders/owners of the acquired land under Section 24(2) of the Act is the statutory right and, therefore, the said right cannot be taken away by an Ordinance by inserting proviso to the abovesaid sub-Section without giving retrospective effect to the same."

LAND ACQUISITION - IF THE PURPOSE IS CORRUPT THE RESULTANT ACT IS BAD

The Supreme Court in the case of State of Punjab and Anr. v. Gurdial Singh and Others, AIR 1980 SC 319, 1980 SCR (1)1071 has held as under. It is fundamental that compulsory taking of a man's property is a serious matter and the smaller the man the more serious the matter. Hearing him before depriving him is both reasonable and preemptive of arbitrariness, and denial of this administrative fairness is constitutional anathema except for good reasons. Save in real urgency where public interest does not brook even the minimum time needed to give a hearing, land acquisition authorities should not, having regard to Articles 14 (and 19), burke an enquiry under S. 17 of the Land Acquisition Act. In the instant case a slumbering process, pending for years and suddenly exciting itself into immediate forcible taking, makes a travesty of emergency power. ............... Legal malice is gibberish unless juristic clarity keeps it separate from the popular concept of personal vice. Bad faith which invalidates the exercise of power-sometimes called colourable exercise or fraud on power and often times overlaps motives, passions, and satisfactions-is the attainment of ends beyond the sanctioned purposes of power by simulation or pretension of gaining a legitimate goal. If the use of the power is for the fulfillment of a legal object the actuation or catalysation by malice is not legicidal. The action is bad where the true object is to reach an end different from the one for which the power is entrusted, goaded by extraneous considerations, good or bad, but irrelevant to the entrustment. When the custodian of power is influenced in its exercise by considerations outside those for promotion of which the power is vested, the court calls it a colourable exercise and is undeceived by illusion. ........ Fraud on power voids the order if it is not exercised bona fide for the end designed. Fraud in this context is not equal to moral turpitude and embraces all cases in which the action impugned is to effect some object which is beyond the purpose and intent of the power, whether this be malice-laden or even benign. If the purpose is corrupt the resultant act is bad. If considerations, foreign to the scope of the power or extraneous to the statute, enter the verdict or impel the action, mala fides or fraud on power vitiates the acquisition or other official act. ....................

MODE OF CALCULATING COMPENSATION FOR LAND ACQUISITION RE-EXPLAINED BY SUPREME COURT 2012 SC

JUSTICE P. Sathasivam, and JUSTICE J. Chelameswar of The Supreme Court of India in the case of Mehrawal Khewaji Trust(Regd) ... vs State Of Punjab & Ors. Decided on 27 April, 2012 has held that "It is clear that when there are several exemplars with reference to similar lands, it is the general rule that the highest of the exemplars, if it is satisfied, that it is a bona fide transaction has to be considered and accepted. When the land is being compulsorily taken away from a person, he is entitled to the highest value which similar land in the locality is shown to have fetched in a bona fide transaction entered into between a willing purchaser and a willing seller near about the time of the acquisition. In our view, it seems to be only fair that where sale deeds pertaining to different transactions are relied on behalf of the Government, the transaction representing the highest value should be preferred to the rest unless there are strong circumstances justifying a different course. It is not desirable to take an average of various sale deeds placed before the authority/court for fixing fair compensation."

QUOTED CITATIONS


In Ranjit Singh vs. Union Territory of Chandigarh (1992) 3 SCC 659, this Court applied the rule of 10% yearly increase for award of higher compensation.


In Delhi Development Authority vs. Bali Ram Sharma & Ors. (2004) 6 SCC 533, this Court considered a batch of appeals and applied the rule of annual increase for grant of higher compensation.


In ONGC Ltd. vs. Rameshbhai Jivanbhai Patel (2008) 14 SCC 745, this Court held that where the acquired land is in urban/semi-urban areas, increase can be to the tune of 10% to 15% per annum and if the acquired land is situated in rural areas, increase can be between 5% to 7.5% per annum.


In Union of India vs. Harpat Singh & Ors. (2009) 14 SCC 375, this Court applied the rule of 10% increase per annum. Based on the above principle, we fix the annual increase at 12% per annum and with that rate of increase, the market value of the appellants’ land would come to Rs.1,82,000 per acre as on the date of notification.

Constitution Bench in the case of Sunder vs. Union of India, (2001) 7 SCC 211. While considering various decisions of the High Courts and approving the decision of the Punjab and Haryana High Court rendered in State of Haryana vs. Kailashwati, AIR 1980 P&H 117, this Court held that the interest awardable under Section 28 would include within its ambit both the market value and the statutory solatium. In view of the same, it is clear that the person entitled to the compensation awarded is also entitled to get interest on the aggregate amount including solatium. The above position has been further clarified by a subsequent Constitution Bench judgment in Gurpreet Singh vs. Union of India, (2006) 8 SCC 457.


Sri Rani M. Vijayalakshmamma Rao Bahadur, Ranee of Vuyyur vs. Collector of Madras, (1969) 1 MLJ 45 (SC). In this case, this Court has held thus: “… where sale deeds pertaining to different transactions are relied on behalf of the Government, that representing the highest value should be preferred to the rest unless there are strong circumstances justifying a different course. In any case we see no reason why an average of two sale deeds should have been taken in this case.”


In State of Punjab and Another vs. Hansraj (Dead) by LRS. Sohan Singh and Others, (1994) 5 SCC 734, this Court has held that method of working out the ‘average price’ paid under different sale transactions is not proper and that one should not have, ordinarily recourse to such method. This Court further held that the bona fide sale transactions proximate to the point of acquisition of the lands situated in the neighbourhood of the acquired lands are the real basis to determine the market value.


Anjani Molu Dessai vs. State of Goa and Another, (2010) 13 SCC 710, after relying upon the earlier decisions of this Court in M.Vijayalakshmamma Rao Bahadur (supra) and Hansraj (supra) held in para 20 as under: “20. The legal position is that even where there are several exemplars with reference to similar lands, usually the highest of the exemplars, which is a bona fide transaction, will be considered.” Again, in para 23, it was held that “the averaging of the prices under the two sale deeds was not justified.”

REFERENCE UNDER SECTION 18 AND ITS LIMITATIONS AND PROCEDURE

In Bhagwan Das v. State of Uttar Pradesh (2010) 3 SCC 545, Court interpreted Section 18 and laid down the following propositions:
(i) If the award is made in the presence of the person interested (or his authorised representative), he has to make the application within six weeks from the date of the Collector's award itself.
(ii) If the award is not made in the presence of the person interested (or his authorised representative), he has to make the application seeking reference within six weeks of the receipt of the notice from the Collector under Section 12(2).
(iii) If the person interested (or his representative) was not present when the award is made, and if he does not receive the notice under Section 12(2) from the Collector, he has to make the application within six months of the date on which he actually or constructively came to know about the contents of the award.
(iv) If a person interested receives a notice under Section 12(2) of the Act, after the expiry of six weeks from the date of receipt of such notice, he cannot claim the benefit of the provision for six months for making the application on the ground that the date of receipt of notice under Section 12(2) of the Act was the date of knowledge of the contents of the award.

The Court then held: When a person interested makes an application for reference seeking the benefit of six months' period from the date of knowledge, the initial onus is on him to prove that he (or his representative) was not present when the award was made, that he did not receive any notice under Section 12(2) of the Act, and that he did not have the knowledge of the contents of the award during a period of six months prior to the filing the application for reference. This onus is discharged by asserting these facts on oath. He is not expected to prove the negative. Once the initial onus is discharged by the claimant/person interested, it is for the Land Acquisition Collector to establish that the person interested was present either in person or through his representative when the award was made, or that he had received a notice under Section 12(2) of the Act, or that he had knowledge of the contents of the award.
Actual or constructive knowledge of the contents of the award can be established by the Collector by proving that the person interested had received or drawn the compensation amount for the acquired land, or had attested the mahazar/panchnama/proceedings delivering possession of the acquired land in pursuance of the acquisition, or had filed a case challenging the award or had acknowledged the making of the award in any document or in statement on oath or evidence. The person interested, not being in possession of the acquired land and the name of the State or its transferee being entered in the revenue municipal records coupled with delay, can also lead to an inference of constructive knowledge. In the absence of any such evidence by the Collector, the claim of the person interested that he did not have knowledge earlier will be accepted, unless there are compelling circumstances not to do so.

PRINCIPLES TO BE FOLLOWED WHEN EMERGENT LAND ACQUISITION IS MADE 2011 SC

The Apex Court in the case of Radhy Shyam (dead) Through LRs and others vs. State of Uttar Pradesh and others, (2011) 5 SCC 553, has in fact culled out the principles, which are required to be followed in case of exercise of emergent powers for acquisition of the land of a citizen by the sovereign State, curtailing his right of property as enshrined under Article 300-A of the Constitution of India. The principles, which have been specifically laid-down by the Apex Court, are thus :

"(i) Eminent domain is a right inherent in every sovereign to take and appropriate property belonging to citizens for public use. To put it differently, the sovereign is entitled to reassert its dominion over any portion of the soil of the State including private property without its owner's consent provided that such assertion is on account of public exigency and for public good
(ii) The legislations which provide for compulsory acquisition of private property by the State fall in the category of expropriatory legislation and such legislation must be construed strictly
(iii) Though, in exercise of the power of eminent domain, the Government can acquire the private property for public purpose, it must be remembered that compulsory taking of one's property is a serious matter. If the property belongs to economically disadvantaged segment of the society or people suffering from other handicaps, then the court is not only entitled but is duty-bound to scrutinise the action/decision of the State with greater vigilance, care and circumspection keeping in view the fact that the landowner is likely to become landless and deprived of the only source of his livelihood and/ or shelter.
(iv) The property of a citizen cannot be acquired by the State and/or its agencies/ instrumentalities without complying with the mandate of Sections 4, 5-A and 6 of the Act. A public purpose, however, laudable it may be does not entitle the State to invoke the urgency provisions because the same have the effect of depriving the owner of his right to property without being heard. Only in a case of real urgency, the State can invoke the urgency provisions and dispense with the requirement of hearing the landowner or other interested persons.
(v) Section 17(1) read with Section 17(4) confers extraordinary power upon the State to acquire private property without complying with the mandate of Section 5-A. These provisions can be invoked only when the purpose of acquisition cannot brook the delay of even a few weeks or months. Therefore, before excluding the application of Section 5-A, the authority concerned must be fully satisfied that time of few weeks or authority concerned must be fully satisfied that time of few weeks or months likely to be taken in conducting inquiry under Section 5-A will, in all probability, frustrate the public purpose for which land is proposed to be acquired.
(vi) The satisfaction of the Government on the issue of urgency is subjective but is a condition precedent to the exercise of power under Section 17(1) and the same can be challenged on the ground that the purpose for which the private property is sought to be acquired is not a public purpose at all or that the exercise of power is vitiated due to mala fides or that the authorities concerned did not apply their mind to the relevant factors and the records.
(vii) The exercise of power by the Government under Section 17(1) does not necessarily result in exclusion of Section 5-A of the Act in terms of which any person interested in land can file objection and is entitled to be heard in support of his objection. The use of word "may" in sub- section (4) of Section 17 makes it clear that it merely enables the Government to direct that the provisions of Section 5-A would not apply to the cases covered under sub-section (1) or (2) of Section 17. In other words, invoking of Section 17(4) is not a necessary concomitant of the exercise of power under Section 17(1).
(viii) The acquisition of land for residential, commercial, industrial or institutional purposes can be treated as an acquisition for public purposes within the meaning of Section 4 but that, by itself, does not justify the exercise of power by the Government under Sections 17(1) and/or 17(4). The court can take judicial notice of the fact that planning, execution and implementation of the schemes relating to development of residential, commercial, industrial or institutional areas usually take few years. Therefore, the private property cannot be acquired for such purpose by invoking the urgency provision contained in Section 17(1). In any case, exclusion of the rule of audi alteram partem embodied in Sections 5-A(1) and (2) is not at all warranted in such matters.
(ix) If land is acquired for the benefit of private persons, the court should view the invoking of Sections 17(1) and/or 17(4) with suspicion and carefully scrutinise the relevant record before adjudicating upon the legality of such acquisition."

KIADB CANNOT ACT AS A REAL ESTATE AGENT AND ACQUIRE LAND FOR THE BENEFIT OF PRIVATE PERSONS

N.Venkatesha Gowda and Another v. State of Karnataka and Others [2011 (4) KLJ 79] andPujari Pedanna v. State of Karnataka and Others [2009 (5) KLJ 556], KIADB cannot act as a real estate agent and acquire land for the benefit of private persons de hors the object of the act. In the second case, it was held that acquisition of land for private Engineering College was not in furtherance of the objects of the KIAD Act and without authority of law. In that case, 1 Acre 35 Guntas of land was sought to be acquired for housing P.G.Block, Electrical Block, Staff Quarters and Boys Hostel, for an Engineering College.


AGRICULTURAL LAND IN TOWN BE TREATED AS URBAN LAND

THE HONOURABLE MR. JUSTICE ANAND BYRAREDDY WRIT PETITION No.34303 OF 2012 (LA-RES) in the case of Sri N V Ramesh vs The State Of Karnataka, Decided on 10 March, 2014 There is one aspect however which requires to be taken note of by this Court and which is a glaring circumstance. It is not in dispute that the lands in question are treated as agricultural lands and are referred to by their survey numbers, apparently indicating that what is sought to be acquired is agricultural. It is also not in dispute that the lands are in the middle of the Town and not on the outskirts. If this is so, even if the lands remain as agricultural lands in the revenue records, the area is entirely built up and the lands have lost their character of agricultural land and to that extent, the petitioners being deprived of just compensation, would result in grave injustice. Therefore, given the admitted circumstance that the lands in question are well within the Town limits and are surrounded by built up areas and it is evident that one of the petitioners has even obtained conversion of the land belonging to him and has constructed a shopping complex which would establish that the adjacent lands of other petitioners are equally very much inside the Town and ought to be treated as urban land.

LOCUS STANDI OF A PERSON WHO PURCHASES THE LAND SUBSEQUENT TO A NOTIFICATION BEING ISSUED UNDER SECTION 4 OF THE ACT

In Pandit Leela Ram v. Union of India AIR 1975 SC 2112, Court held that, any one who deals with the land subsequent to a Section 4 notification being issued, does so, at his own peril.
In Sneh Prabha v. State of Uttar Pradesh AIR 1996 SC 540, Court held that a Section 4 notification gives a notice to the public at large that the land in respect to which it has been issued, is needed for a public purpose, and it further points out that there will be "an impediment to any one to encumber the land acquired thereunder." The alienation thereafter does not bind the State or the beneficiary under the acquisition. The purchaser is entitled only to receive compensation.

Similarly, in U.P. Jal Nigam v. Kalra Properties Pvt. Ltd. AIR 1996 SC 1170, Court held that, purchase of land after publication of a Section 4 notification in relation to such land, is void against the State and at the most, the purchaser may be a person-interested in compensation, since he steps into the shoes of the erstwhile owner and may therefore, merely claim compensation.
In Ajay Kishan Singhal v. Union of India AIR 1996 SC 2677; Mahavir and Anr. v. Rural Institute, Amravati and Anr. (1995) 5 SCC 335; Gian Chand v. Gopala and Ors. (1995) 2 SCC 528; and Meera Sahni v. Lieutenant Governor of Delhi and Ors. (2008) 9 SCC 177, Court categorically held that, a person who purchases land after the publication of a Section 4 notification with respect to it, is not entitled to challenge the proceedings for the reason, that his title is void and he can at best claim compensation on the basis of vendor's title. In view of this, the sale of land after issuance of a Section 4 notification is void and the purchaser cannot challenge the acquisition proceedings.

CASE LAW ON LAND LAWS

KARNATAKA LAND LAWS