Supreme Court clarifies land acquisition timelines: State of Maharashtra vs. Moti Ratan Estate (2019)

Date of the Judgment: 04 September 2019

Citation: (2019) INSC 796

Judges: Arun Mishra, J., M.R. Shah, J., Ajay Rastogi, J.

Can a delay in declaring a land acquisition award be excused if a court order stayed proceedings for some, but not all, affected landowners? The Supreme Court of India recently tackled this question, focusing on whether a stay order for some landowners applies to all under the same acquisition scheme. This case clarifies the interpretation of Section 11A of the Land Acquisition Act, 1894, concerning the two-year deadline for declaring awards. The judgment was delivered by a three-judge bench comprising Justices Arun Mishra, M.R. Shah, and Ajay Rastogi, with the majority opinion authored by Justice M.R. Shah.

Case Background

The case involves land acquisition in the village of Asarjan, Nanded district, Maharashtra. The acquisition was initiated for a specific project, with the following key events:

• 01 March 2012: Notification under Section 4 of the Land Acquisition Act, 1894, was issued and published in the Official Gazette.
• 12 April 2012: The Section 4 notification was published at Village Chawdi Asarjan by beating of drums.
• 09 May 2012: Original land owners filed Writ Petition No. 7867 of 2012 challenging the acquisition and the notification under Section 4 of the Act.
• 07 February 2013: Notification under Section 6 of the Act was published.
• 13 February 2013: The Section 6 notification was published at Village Chawdi Asarjan by beating of drums.
• 11 October 2013: The High Court directed that the possession of the original writ petitioners in WP 7867/2012 shall not be disturbed.
• 12 November 2013: The High Court granted stay to the acquisition proceedings in Writ Petition Nos. 3051/2013 and 3159/2013 filed by other land owners.
• 20 November 2013: The High Court modified the earlier interim order and directed that till the next date, final award shall not be declared in WP 3051/2013 and 3159/2013. However, the State was permitted to move an application seeking leave of the Court to declare the award, if the award is ready.
• 08 January 2014: The High Court disposed of the aforesaid two writ petitions, while continuing the interim order dated 20.11.2013 by 12 weeks.
• 02 April 2014: The 12 weeks period got over.
• 08 May 2015: The award under Section 11 of the Act was passed.

The original landowners challenged the acquisition, and the High Court initially ordered that their possession not be disturbed. Other landowners also challenged the acquisition, leading to a stay on further proceedings. The State argued that the time during which these stays were in effect should be excluded when calculating the two-year period for declaring the award under Section 11 of the Act. The High Court, however, ruled that the acquisition had lapsed because the award was not declared within two years from the Section 6 notification.

Timeline:

Course of Proceedings

The High Court of Judicature at Bombay, Bench at Aurangabad, heard multiple writ petitions challenging the land acquisition. Initially, the High Court directed that the possession of the original writ petitioners shall not be disturbed. Subsequently, other landowners also challenged the acquisition, and the High Court granted a stay on the acquisition proceedings and against declaring the award. The High Court eventually quashed the acquisition proceedings, holding that the award under Section 11 of the Land Acquisition Act, 1894, was not declared within two years from the date of the declaration under Section 6 of the Act. The High Court rejected the State’s argument that the period of stay should be excluded, stating that the stay orders were not directly applicable to the original writ petitioners in WP 7867/2012. The High Court held against the original writ petitioners on other grounds of challenge to the acquisition.

Legal Framework

The case revolves around the interpretation of the Land Acquisition Act, 1894, particularly the following sections:

• Section 4: This section deals with the preliminary notification for land acquisition. It states that when it appears to the appropriate Government that land in any locality is needed or is likely to be needed for any public purpose, a notification to that effect shall be published in the Official Gazette.
• Section 6: This section pertains to the declaration that the land is required for a public purpose. It states that subject to the provisions of Part VII of this Act, when the appropriate Government is satisfied, after considering the report, if any, made under Section 5A, sub-section (2), that any particular land is needed for a public purpose, a declaration shall be made to that effect under the signature of a Secretary to such Government or of some officer duly authorized to certify its orders.
• Section 11: This section outlines the process for making an award by the Collector. It states that on the date so fixed, the Collector shall proceed to enquire into the objections which any person interested has stated pursuant to a notice given under Section 9 to the measurements made under Section 8, and shall make an award under his hand of—(i) the true area of the land; (ii) the compensation which in his opinion should be allowed for the land; and (iii) the apportionment of the said compensation among all the persons known or believed to be interested in the land, of whom, or of whose claims, he has information, whether or not they have respectively appeared before him.
• Section 11A: This section specifies the time limit for making an award. It states that the Collector shall make an award under Section 11 within a period of two years from the date of the publication of the declaration under Section 6. If no award is made within that period, the entire proceedings for the acquisition of the land shall lapse. The explanation to this section states that in computing the period of two years, the period during which any action or proceeding to be taken in pursuance of the declaration under Section 6 is stayed by an order of a Court shall be excluded.

Arguments

Appellants (State of Maharashtra):

• The State argued that the High Court erred in quashing the acquisition because the award under Section 11 of the Land Acquisition Act, 1894, was not declared within two years from the date of declaration under Section 6 of the Act.
• The State contended that the period during which the High Court had stayed the acquisition proceedings and the declaration of the award in Writ Petition Nos. 3051/2013 and 3159/2013 should be excluded when calculating the two-year period.
• It was argued that since the acquisition was for the same project and the same village, the stay order in other writ petitions should apply to all the acquired lands, even those not directly involved in those petitions.
• The State relied on several Supreme Court decisions, including G. Narayanaswamy Reddy v. State of Karnataka (1991) 3 SCC 261, Yusufbhai Noormohmed Nendoliya v. State of Gujarat (1991) 4 SCC 531, Gandhi Grah Nirman Sahkari Samiti Ltd. v. State of Rajasthan (1993) 2 SCC 662, Hansraj H. Jain v. State of Maharashtra (1993) 3 SCC 634, Sangappa Gurulingappa Sajjan v. State of Karnataka (1994) 4 SCC 145, Abhey Ram v. Union of India (1997) 5 SCC 421, Om Prakash v. Union of India (2010) 4 SCC 17, and Raj Kumar Gandhi v. Chandigarh Administration (2018) 7 SCC 763, to support their claim that the stay should be extended to all landowners under the same acquisition scheme.

Respondents (Original Writ Petitioners):

• The original writ petitioners argued that the High Court was correct in quashing the acquisition proceedings as the award was not declared within two years of the declaration under Section 6 of the Act, thus attracting Section 11A of the Act.
• They contended that there was no stay against declaring the award, only a stay against possession. Therefore, the authorities could have declared the award within the stipulated time.
• They further argued that the stay in Writ Petition Nos. 3051/2013 and 3159/2013 was not applicable to their case, as they were not parties to those petitions, and therefore, the period of stay in those petitions could not be excluded in their case.
• The respondents argued that the decision in Raj Kumar Gandhi (supra) was not applicable because the Land Acquisition Officer had chosen to keep the land, with respect to which stay was granted, away from the declaration of the award.

Submissions by Parties

Issues Framed by the Supreme Court

The Supreme Court framed the following issues for consideration:

1. Whether the High Court was justified in quashing the acquisition proceedings on the ground that they had lapsed under Section 11A of the Land Acquisition Act, 1894?
2. Whether the stay of action/proceedings by some of the landholders, prohibiting the State authorities from making the award under Section 11 of the Act within the statutory period of two years, would be equally extendable to other landholders under the same scheme?

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues:

Authorities

The Supreme Court relied on the following authorities:

On the Applicability of Section 11A of the Land Acquisition Act, 1894:

• G. Narayanaswamy Reddy v. State of Karnataka (1991) 3 SCC 261 (Supreme Court of India): This case was cited to support the view that a stay granted in respect of one pocket of land would operate even with respect to other pockets of land under the same scheme.
• Yusufbhai Noormohmed Nendoliya v. State of Gujarat (1991) 4 SCC 531 (Supreme Court of India): This case was cited to emphasize that the Explanation to Section 11A is in the widest possible terms and that there is no warrant for limiting the action or proceedings referred to in the Explanation to actions or proceedings preceding the making of the award under Section 11.
• Gandhi Grah Nirman Sahkari Samiti Ltd. v. State of Rajasthan (1993) 2 SCC 662 (Supreme Court of India): This case was cited to support the view that the authorities were justified in not proceeding with acquisition proceedings during the period of stay.
• Hansraj H. Jain v. State of Maharashtra (1993) 3 SCC 634 (Supreme Court of India): This case was cited to support the view that the authorities were justified in not proceeding with acquisition proceedings during the period of stay.
• Sangappa Gurulingappa Sajjan v. State of Karnataka (1994) 4 SCC 145 (Supreme Court of India): This case was cited to support the view that the period during which a stay of dispossession was in operation should be excluded in computing the period.
• Abhey Ram v. Union of India (1997) 5 SCC 421 (Supreme Court of India): This case was cited to support the view that any type of order passed by the Court would be an inhibitive action on the part of the authorities to proceed further.
• Om Prakash v. Union of India (2010) 4 SCC 17 (Supreme Court of India): This case was cited to support the view that an interim order of stay granted in one matter would put complete restraint on the authorities to proceed further.
• Raj Kumar Gandhi v. Chandigarh Administration (2018) 7 SCC 763 (Supreme Court of India): This case was relied upon to support the view that where the scheme of acquisition is one, an interim stay granted in respect of one pocket of land would operate even in respect of other pockets of land.

Authorities Considered by the Court

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The Supreme Court followed the principles laid down in G. Narayanaswamy Reddy v. State of Karnataka (1991) 3 SCC 261*, stating that a stay granted in one matter would operate even in respect of other lands under the same scheme.
• The Supreme Court reiterated the interpretation of Section 11A of the Act as explained in Yusufbhai Noormohmed Nendoliya v. State of Gujarat (1991) 4 SCC 531*, stating that the explanation to Section 11A is in the widest possible terms.
• The Supreme Court relied on Gandhi Grah Nirman Sahkari Samiti Ltd. v. State of Rajasthan (1993) 2 SCC 662* to support the view that authorities were justified in not proceeding with acquisition proceedings during the period of stay.
• The Supreme Court followed the reasoning in Hansraj H. Jain v. State of Maharashtra (1993) 3 SCC 634* to support the view that authorities were justified in not proceeding with acquisition proceedings during the period of stay.
• The Supreme Court relied on Sangappa Gurulingappa Sajjan v. State of Karnataka (1994) 4 SCC 145* to emphasize that the period during which a stay of dispossession was in operation should be excluded in computing the period.
• The Supreme Court followed the reasoning in Abhey Ram v. Union of India (1997) 5 SCC 421* to support the view that any type of order passed by the Court would be an inhibitive action on the part of the authorities to proceed further.
• The Supreme Court relied on Om Prakash v. Union of India (2010) 4 SCC 17* to support the view that an interim order of stay granted in one matter would put complete restraint on the authorities to proceed further.
• The Supreme Court applied the principles laid down in Raj Kumar Gandhi v. Chandigarh Administration (2018) 7 SCC 763* to the facts of the present case, holding that where the scheme of acquisition is one, an interim stay granted in respect of one pocket of land would operate even in respect of other pockets of land.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• The interpretation of Section 11A of the Land Acquisition Act, 1894, which states that the period during which any action or proceeding is stayed by a court order should be excluded when calculating the two-year deadline for declaring an award.
• The understanding that when the scheme of acquisition is one, a stay granted for one pocket of land extends to other pockets under the same scheme.
• The recognition that any order by the court that prevents the authorities from proceeding with the acquisition, including stay against possession, should be considered as a stay of action or proceeding.
• The need to avoid a situation where authorities are forced to proceed with acquisition proceedings in the face of a court order, which could lead to contempt of court.

The Court emphasized that the intention of Section 11A is to provide a benefit to landowners by ensuring timely awards, but this benefit should not be extended to those who have obtained court orders that delay the proceedings. The Court also noted that the authorities were justified in staying their hands when there was a stay order, and that such a stay should be considered as an impediment to the acquisition proceedings.

Sentiment Analysis of Reasons Given by the Supreme Court

Fact:Law Ratio

The Supreme Court’s decision was influenced by a combination of factual and legal considerations. The ratio of fact to law in the decision is as follows:

The court’s reasoning was primarily based on the legal interpretation of Section 11A and its explanation, along with the application of relevant precedents. The factual aspects, such as the existence of stay orders and the nature of the acquisition scheme, were also considered but were secondary to the legal analysis.

Logical Reasoning

Issue 1: Whether the High Court was justified in quashing the acquisition proceedings?

Issue 2: Whether the stay of action/proceedings by some landholders extends to others?

Final Order

The Supreme Court allowed the appeals, set aside the impugned judgment and order passed by the High Court, and remanded the matter back to the High Court to be decided afresh in accordance with the observations made in the judgment. The Court also clarified that the authorities shall be at liberty to proceed further in accordance with the law.

Dissenting Opinion

There was no dissenting opinion in this case. The judgment was authored by Justice M.R. Shah, and Justices Arun Mishra and Ajay Rastogi concurred with the same.

Implications

This judgment has significant implications for landowners, state authorities, and the interpretation of the Land Acquisition Act, 1894:

• For Landowners: It clarifies that if a stay is granted in respect of land acquisition proceedings for some landowners under a common scheme, the benefit of the stay will extend to all landowners under the same scheme. This means that the two-year period for declaring the award will be extended for all landowners affected by the same acquisition scheme, not just those who directly obtained the stay.
• For State Authorities: It provides clarity on how to interpret Section 11A of the Land Acquisition Act, 1894, particularly regarding the exclusion of stay periods. State authorities can now proceed with acquisition proceedings with the confidence that they will not be penalized for delays caused by court orders, provided they act diligently.
• For the Interpretation of the Land Acquisition Act: The judgment reinforces the view that the Explanation to Section 11A of the Act should be interpreted broadly to include all types of court orders that inhibit the authorities from proceeding further with the acquisition. It also clarifies that the benefit of the stay is not limited to the landowners who directly obtained the stay, but extends to all landowners under the same acquisition scheme.

Practical Implications

The judgment has several practical implications:

• Future Land Acquisition Cases: The judgment serves as a precedent for future land acquisition cases, clarifying that the two-year timeline for declaring an award is subject to extensions due to court-ordered stays. This provides a more realistic framework for land acquisition proceedings.
• Timely Actions: It emphasizes the importance of timely actions by state authorities. While delays caused by court orders can be excused, authorities must still act diligently and make efforts to declare the award as soon as possible after the stay is lifted.
• Legal Clarity: The judgment brings legal clarity to the interpretation of Section 11A of the Land Acquisition Act, 1894, and ensures that the benefit of the stay extends to all landowners under the same acquisition scheme.
• Consistency in Application: It promotes consistency in the application of the Land Acquisition Act, 1894, ensuring that all landowners under the same scheme are treated equally in terms of time limits and extensions.

Conclusion

The Supreme Court’s judgment in State of Maharashtra vs. Moti Ratan Estate (2019) provides a crucial clarification on the interpretation of Section 11A of the Land Acquisition Act, 1894. The Court held that the period during which a court order stays the acquisition proceedings should be excluded when calculating the two-year deadline for declaring an award. This exclusion applies not only to the specific landowners who obtained the stay but also to all landowners under the same acquisition scheme. The judgment emphasizes that any court order that prevents the authorities from proceeding with the acquisition, including stay against possession, should be considered as a stay of action or proceeding. This decision ensures a more practical and consistent application of the Land Acquisition Act, 1894, and provides a clear framework for future land acquisition cases. It also highlights the importance of timely actions by state authorities, while acknowledging the delays caused by court orders.