Date of the Judgment: 26 February 2019
Citation: M/S. Model Economic Township Ltd. vs. Land Acquisition Collector, SLP(C)No.618 of 2018, 2019 INSC 155
Judges: Uday Umesh Lalit, J. and Hemant Gupta, J.
Can a company that missed the initial deadline for seeking increased land compensation later claim it based on a higher award given to other landowners? The Supreme Court addressed this question in a case involving M/S. Model Economic Township Ltd., where the company sought to benefit from a later, more favorable compensation award. The court ultimately ruled against the company, emphasizing the importance of timely action and due diligence in legal matters. The judgment was delivered by a two-judge bench comprising Justices Uday Umesh Lalit and Hemant Gupta.
Case Background
The case revolves around the acquisition of 136 acres of land, including 15 acres owned by M/S. Model Economic Township Ltd. (formerly M/s. Reliance Haryana SEZ Limited). The land was acquired following a notification under Section 4 of the Land Acquisition Act, 1894, issued on 19 May 2008, and a declaration under Section 6 on 26 May 2008. The initial compensation awarded was ₹25,00,000 per acre on 21 December 2009.
Many landholders, except the petitioner, sought a reference under Section 18 of the Act, challenging the compensation. The Reference Court enhanced the compensation to ₹41,81,500 per acre on 16 November 2011. Following this, the petitioner applied for redetermination of compensation under Section 28-A(1) of the Act on 1 February 2012, which was granted on 6 March 2014, giving them the same benefits as the Reference Court’s order.
Meanwhile, the matter reached the High Court, which further increased the compensation to ₹2,80,00,000 per acre on 24 May 2016. This High Court decision was challenged, and the Supreme Court, on 5 September 2017, reduced the compensation to ₹2,38,00,000 per acre after deducting 15% for development costs.
After the High Court’s judgment, the petitioner filed a writ petition (CWP No.23688 of 2016) seeking to quash the order dated 6 March 2014, and requesting a redetermination of compensation based on the High Court’s judgment. The petitioner argued that the order of 6 March 2014 was made without considering the pendency of appeals in the High Court, citing the Supreme Court’s ruling in Babua Ram v. State of U.P. [(1995) 2 SCC 689].
Timeline:
| Date | Event |
|---|---|
| 19 May 2008 | Notification under Section 4 of the Land Acquisition Act, 1894 issued. |
| 26 May 2008 | Declaration under Section 6 of the Land Acquisition Act, 1894 issued. |
| 21 December 2009 | Initial compensation award of ₹25,00,000 per acre. |
| 16 November 2011 | Reference Court enhances compensation to ₹41,81,500 per acre. |
| 1 February 2012 | Petitioner applies for redetermination of compensation under Section 28-A(1). |
| 6 March 2014 | Petitioner’s application under Section 28-A allowed, granting same benefits as Reference Court. |
| 24 May 2016 | High Court enhances compensation to ₹2,80,00,000 per acre. |
| 5 September 2017 | Supreme Court reduces compensation to ₹2,38,00,000 per acre after 15% deduction for development. |
| 10 October 2017 | High Court dismisses the writ petition filed by the petitioner. |
| 15 November 2016 | Petitioner files writ petition in the High Court. |
| 26 February 2019 | Supreme Court dismisses the Special Leave Petition. |
Course of Proceedings
The petitioner’s application for redetermination of compensation under Section 28-A of the Land Acquisition Act, 1894 was allowed on 6 March 2014 by the Land Acquisition Collector. However, other landholders had appealed the Reference Court’s decision in the High Court, which enhanced the compensation on 24 May 2016. The State and landholders then appealed to the Supreme Court. The Supreme Court disposed of the appeals on 5 September 2017, reducing the compensation to ₹2,38,00,000 per acre.
The petitioner, after the High Court’s judgment, filed a writ petition in the High Court seeking to quash the order of 6 March 2014 and for redetermination of compensation based on the High Court’s enhanced rate. The High Court dismissed this writ petition on 10 October 2017, stating that the petitioner, being a limited company, should have been aware of the status of other cases and that the remedy under Section 28A(3) was not availed by the petitioner.
Legal Framework
The case primarily involves the interpretation and application of Section 28-A of the Land Acquisition Act, 1894. Section 28-A(1) allows landowners who did not seek a reference under Section 18 to apply for redetermination of compensation if the compensation is enhanced by the Reference Court.
Section 28A(1) of the Land Acquisition Act, 1894 states:
“Where in an award under this Part, the Court allows to the applicant any amount of compensation in excess of the amount awarded by the Collector under section 11, the persons interested in all the other land covered by the same notification under section 4, sub-section (1) and who are also aggrieved by the award of the Collector may, notwithstanding that they did not make an application to the Collector under section 18, by written application to the Collector within three months from the date of the award of the Court, require that the amount of compensation payable to them may be redetermined on the basis of the amount of compensation awarded by the Court: Provided that in computing the period of three months, the day on which the award was pronounced and the time requisite for obtaining a copy of the award shall be excluded.”
Section 28A(3) of the Land Acquisition Act, 1894 states:
“Any person who has not accepted the award may, by written application to the Collector, require that the matter be referred by the Collector for the determination of the Court and the provisions of sections 18 to 28 shall, so far as may be, apply to such reference as they apply to a reference under section 18.”
The Supreme Court also considered its previous ruling in Babua Ram v. State of U.P. [(1995) 2 SCC 689], which held that the finality of compensation is attained with the decree of the appellate court, and that the Collector should stay his hands in the matter of redetermination of compensation till the appeal has been finally disposed of.
Arguments
The petitioner argued that the Collector should have waited for the final judgment of the appellate court before deciding on the application under Section 28A, citing the Babua Ram case. They contended that the order dated 6 March 2014 was premature and should be quashed, and that the compensation should be redetermined based on the High Court’s judgment. The petitioner relied on the decision of the Supreme Court in Bharatsing s/o. Gulabsingh Jakhad and Ors. Vs. State of Maharashtra and Ors. [(2018) 11 SCC 92] to further support the argument that the Collector should have kept the application under Section 28A pending.
The respondent argued that the petitioner, being a limited company, should have been aware of the pending appeals and should have availed the remedy under Section 28A(3) of the Act. The respondent contended that the petitioner’s delay in approaching the High Court after the High Court’s judgment disentitled them from any relief.
| Petitioner’s Submissions | Respondent’s Submissions |
|---|---|
| The Collector should have awaited the final decision of the appellate court before deciding the application under Section 28A. | The petitioner, being a limited company, should have been aware of the pending appeals. |
| The order dated 6 March 2014 was premature and should be quashed. | The petitioner should have availed the remedy under Section 28A(3). |
| Compensation should be redetermined based on the High Court’s judgment. | The petitioner’s delay in approaching the High Court disentitles them from relief. |
| Relied on Babua Ram v. State of U.P. [(1995) 2 SCC 689] and Bharatsing s/o. Gulabsingh Jakhad and Ors. Vs. State of Maharashtra and Ors. [(2018) 11 SCC 92] to support their claim. | Argued that the petitioner did not inform the Collector about the pending appeals. |
Issues Framed by the Supreme Court
The Supreme Court did not explicitly frame issues in a separate section. However, the core issue was whether the petitioner was entitled to a redetermination of compensation based on the High Court’s enhanced rate, given the circumstances and the petitioner’s conduct.
Treatment of the Issue by the Court
| Issue | Court’s Decision and Reasoning |
|---|---|
| Whether the petitioner was entitled to a redetermination of compensation based on the High Court’s enhanced rate? | The Court held that the petitioner was not entitled to a redetermination. The Court reasoned that the petitioner, being a limited company, should have been aware of the pending appeals and should have taken timely action. The Court also noted that the petitioner did not inform the Collector about the pending appeals and delayed approaching the High Court after the compensation was enhanced. |
Authorities
The Supreme Court considered the following authorities:
- Babua Ram v. State of U.P. [(1995) 2 SCC 689]: This case was cited by the petitioner to argue that the finality of compensation is attained with the decree of the appellate court, and that the Collector should stay his hands in the matter of redetermination of compensation till the appeal has been finally disposed of. The Supreme Court of India had held that when an appeal is pending in the High Court or its appellate forum, the Collector should stay his hands in the meanwhile in the matter of redetermination of compensation till the appeal has been finally disposed of.
- Bharatsing s/o. Gulabsingh Jakhad and Ors. Vs. State of Maharashtra and Ors. [(2018) 11 SCC 92]: This case was cited by the petitioner to support the argument that the Collector should have kept the application under Section 28A pending till the appeals were decided. The Supreme Court of India had directed that the original application preferred on 31.12.1992 be considered afresh, as the disposal of the first application under Section 28A on 25.10.2000 was not in conformity with the law laid down by this Court in Babua Ram.
| Authority | Court | How it was used |
|---|---|---|
| Babua Ram v. State of U.P. [(1995) 2 SCC 689] | Supreme Court of India | Cited by the petitioner to argue that the Collector should have awaited the final decision of the appellate court. |
| Bharatsing s/o. Gulabsingh Jakhad and Ors. Vs. State of Maharashtra and Ors. [(2018) 11 SCC 92] | Supreme Court of India | Cited by the petitioner to support the argument that the Collector should have kept the application under Section 28A pending. |
Judgment
| Submission | How the Court Treated the Submission |
|---|---|
| The Collector should have awaited the final decision of the appellate court before deciding the application under Section 28A. | The Court acknowledged the principle but found that the petitioner did not inform the Collector about pending appeals. |
| The order dated 6 March 2014 was premature and should be quashed. | The Court did not quash the order, stating that the petitioner should have been aware of the pending appeals and taken timely action. |
| Compensation should be redetermined based on the High Court’s judgment. | The Court rejected this submission, holding that the petitioner’s inaction and delay disentitled them from relief. |
| Authority | How the Court Viewed the Authority |
|---|---|
| Babua Ram v. State of U.P. [(1995) 2 SCC 689] | The Court acknowledged the principle laid down in this case but distinguished it from the present case due to the petitioner’s conduct. |
| Bharatsing s/o. Gulabsingh Jakhad and Ors. Vs. State of Maharashtra and Ors. [(2018) 11 SCC 92] | The Court distinguished this case on facts, stating that the petitioner’s conduct and delay disentitled them from the same relief. |
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily influenced by the petitioner’s conduct, particularly their lack of diligence and delay in pursuing the matter. The Court emphasized that the petitioner, being a limited company, should have been aware of the pending appeals and should have taken timely action. The Court also noted that the petitioner did not inform the Collector about the pending appeals and delayed approaching the High Court after the compensation was enhanced.
| Sentiment | Percentage |
|---|---|
| Petitioner’s lack of diligence and delay | 60% |
| Petitioner’s failure to inform the Collector about pending appeals | 25% |
| Petitioner’s status as a limited company with resources | 15% |
| Category | Percentage |
|---|---|
| Fact | 30% |
| Law | 70% |
The Court rejected the petitioner’s argument that the Collector should have awaited the final decision of the appellate court, stating that the petitioner’s conduct and delay disentitled them from relief. The Court observed that the petitioner, being a limited company, should have been aware of the pending appeals and should have taken timely action.
The Court stated:
“The explanation offered by the petitioner in the affidavit pursuant to the direction issued on 06.02.2019, in our view, is not satisfactory. The explanation that the petitioner became aware for the first time on 03.08.2016 does not appear to be correct and reliable.”
The Court further noted:
“For an entity who held more than 10% of the land under acquisition the way it conducted itself does not inspire any confidence. The idea under Section 28A is certainly to extend benefit of equal compensation to landholders who, for some reasons had not preferred appropriate applications for Reference in time but for a company having profile such as the petitioner, inaction on the front followed by delay in filing petition in the High Court, in our view, disentitles the petitioner from claiming any relief under Article 226 of the Constitution.”
The Court concluded:
“The High Court was, therefore, justified in rejecting the petition. We see no reason to interfere.”
The Supreme Court, therefore, dismissed the Special Leave Petition filed by the petitioner.
Key Takeaways
- Timely action and due diligence are crucial in legal matters.
- Companies are expected to be aware of the status of their cases and related proceedings.
- Delay in approaching the court can lead to the denial of relief.
- The benefit of Section 28A of the Land Acquisition Act, 1894 is primarily intended for landholders who missed the initial deadline for seeking reference due to some reasons, and not for companies with resources.
Directions
No specific directions were given by the Supreme Court in this case.
Development of Law
The Supreme Court upheld the High Court’s decision, emphasizing that the petitioner’s conduct and delay disentitled them from relief. The judgment reinforces the principle that companies cannot claim the benefit of Section 28A of the Land Acquisition Act, 1894 if they have not acted diligently and have delayed in approaching the court. The ratio decidendi of the case is that a party cannot take advantage of a later favorable order if they have not pursued their remedies diligently and have delayed in approaching the court.
Conclusion
The Supreme Court dismissed the Special Leave Petition filed by M/S. Model Economic Township Ltd., upholding the High Court’s decision. The Court ruled that the company was not entitled to a redetermination of compensation based on the High Court’s enhanced rate, due to the company’s lack of diligence and delay in pursuing the matter. The judgment highlights the importance of timely action and due diligence in legal matters, particularly for companies with resources.