Supreme Court enhances land compensation for Jhajjar Thermal Power Plant: Jaspal Singh vs. State of Haryana (20 October 2022)

Introduction

Date of the Judgment: 20 October 2022
Citation: Jaspal Singh & Others vs. The State of Haryana and Others (2022) INSC 882
Judges: M.R. Shah, J. and M.M. Sundresh, J. The judgment was authored by M.R. Shah, J.

When land is acquired for public projects, how should the compensation be determined? The Supreme Court recently addressed this question in a case involving land acquisition for the Jhajjar Thermal Power Plant in Haryana. The core issue was whether landowners should receive similar compensation for land acquired for two different projects when the lands were situated in close proximity. The Supreme Court bench comprising Justices M.R. Shah and M.M. Sundresh delivered the judgment, with Justice M.R. Shah authoring the opinion.

Case Background

The case involves the acquisition of land in village Jharli, District Jhajjar, Haryana, for the Jhajjar Thermal Power Plant. The initial notification for acquisition under Section 4 of the Land Acquisition Act, 1894 was issued on April 9, 2007, followed by a declaration under Section 6 on November 13, 2007. The Land Acquisition Collector awarded compensation at Rs. 16,00,000 per acre. The Reference Court enhanced this to Rs. 17,64,350 per acre. Both the acquiring body and the landowners appealed to the High Court. The High Court, however, reduced the compensation back to Rs. 16,00,000 per acre. Simultaneously, land in the same village, but on the opposite side of Bahu Road, was acquired for Arawali Power Company Private Limited. The Supreme Court had previously determined compensation for the Arawali project at Rs. 25,00,000 per acre.

The landowners argued that since the lands were similarly situated, they should receive the same compensation as the Arawali project landowners. The High Court rejected this argument, citing that the Supreme Court’s decision in the Arawali case was specific to its facts and not a precedent. The landowners then appealed to the Supreme Court.

Timeline

Course of Proceedings

The Land Acquisition Collector initially awarded compensation of Rs. 16,00,000 per acre for the land acquired for the Jhajjar Thermal Power Plant. Dissatisfied, the landowners sought a reference to the Reference Court, which enhanced the compensation to Rs. 17,64,350 per acre. Both the landowners and the acquiring body then appealed to the High Court. The High Court allowed the appeal of the acquiring body and reduced the compensation back to the original amount of Rs. 16,00,000 per acre. The High Court distinguished the case from the Arawali Power Company Private Limited case, where the Supreme Court had awarded Rs. 25,00,000 per acre, stating that the Arawali decision was specific to its facts and not a precedent. The landowners then appealed to the Supreme Court.

Legal Framework

The case is governed by the Land Acquisition Act, 1894. The relevant provisions are:

• Section 4: This section deals with the publication of a preliminary notification for the acquisition of land. The notification is the starting point of the acquisition process.
• Section 6: This section deals with the declaration that the land is required for a public purpose. This declaration follows the preliminary notification and signifies the government’s intention to acquire the land.
• Section 11: This section deals with the Land Acquisition Collector’s award. The Collector determines the compensation to be paid to the landowners based on the market value of the land.

The Act aims to balance the need for public projects with the rights of landowners to receive fair compensation. The determination of “just compensation” is a key aspect of the legal framework.

Arguments

Appellants (Landowners):

• The lands acquired for the Jhajjar Thermal Power Plant and the Arawali Power Company Private Limited are similarly situated, with only Bahu Road separating them.
• The landowners are entitled to just compensation, and there is no significant difference between the two sets of lands.
• The compensation should be the same as that awarded in the Arawali case, i.e., Rs. 25,00,000 per acre.
• It is unfair that one part of the same survey number (73) receives a compensation of Rs. 16,00,000 per acre and another part receives Rs. 25,00,000 per acre.

Respondents (State of Haryana and Jhajjar Thermal Power Plant):

• The Supreme Court’s decision in the Arawali case was specific to its facts and should not be treated as a precedent.
• The landowners relied on sale deeds from 2010, which were executed after the Section 4 notification and one sale deed/sale exemplar dated 16.05.2007 was with respect to small parcel of land.
• The High Court rightly did not rely on sale deeds post the Section 4 notification and rightly determined compensation at Rs. 16,00,000 per acre.
• The landowners did not provide sufficient evidence to prove the comparability of the sale instances.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issue can be summarized as:

1. Whether the landowners whose lands were acquired for the Jhajjar Thermal Power Plant are entitled to the same compensation as the landowners whose lands were acquired for the Arawali Power Company Private Limited, considering that the lands are similarly situated.

Treatment of the Issue by the Court

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

Authorities

The Supreme Court considered the following authorities:

Judgment

How each authority was viewed by the Court?

• Arawali Power Company Private Limited (supra): The Supreme Court considered the compensation awarded in this case, but clarified that the previous judgment was based on specific facts and not to be treated as precedent. The Court stated that the words “in the peculiar facts of the case and not to be treated as precedent” are to be considered in the context in which the same are used. The court clarified that the said words were with respect to consideration of the sale deeds which were executed in the year 2010 (post section 4 notification). As per the settled position of law, normally the sale deeds/sale exemplars post section 4 notification may not be taken into consideration. However, as it was agreed between the parties that the subsequent sale deeds were bona fide and could be taken into consideration, to that and in the peculiar facts of the case and not to be treated as precedent, this Court had taken into consideration the subsequent sale deeds and determined compensation at Rs. 25,00,000/- per acre after giving a reasonable deduction, i.e., 15% deduction.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the principle of just and reasonable compensation. The Court emphasized that the lands acquired for both the Jhajjar Thermal Power Plant and the Arawali Power Company Private Limited were similarly situated, being in the same village and separated only by a road. The court found it unjust to award significantly different compensation rates for these lands. The Court also took into account that the Arawali case had awarded a higher compensation and that there was no significant difference in the lands acquired for the two projects. The court also considered that the landowners are entitled to just compensation.

Logical Reasoning:

The Court stated:

“Once the landowners whose lands have been acquired for Arawali Power Project are held to be entitled to compensation at Rs. 25,00,000/- per acre, the landowners whose lands have been acquired for Jhajjar Thermal Power Plant cannot be denied the just and reasonable compensation.”

“There will be a vast difference in amount of compensation for the lands acquired for Jhajjar Thermal Power Plant and the Arawali Power Project, which as observed hereinabove can be said to be similarly situated.”

“However, at the same time, considering the evidence on record and the sale instances which were relied upon on behalf of the landowners and while considering the fact that the landowners shall be entitled to just and reasonable compensation for the lands acquired and taking into consideration the decision of this Court in the case of Arawali Power Company Private Limited (supra) , we are of the opinion that if the landowners in the present case are awarded compensation at the rate of Rs. 22,00,000/- per acre, the same can be said to be just and reasonable compensation.”

The Court rejected the argument that the Arawali decision was not a precedent, clarifying that the “peculiar facts” mentioned in the Arawali case related to the consideration of post-notification sale deeds. The court decided to award compensation at the rate of Rs. 22,00,000 per acre, considering the need for just and reasonable compensation and the fact that the lands were similarly situated.

Key Takeaways

• Landowners whose lands are acquired for public projects are entitled to just and reasonable compensation.
• Lands that are similarly situated should receive similar compensation, even if acquired for different projects.
• The principle of just compensation is paramount in land acquisition cases.
• The court clarified that the words “in the peculiar facts of the case and not to be treated as precedent” are to be considered in the context in which the same are used.
• The court considered that the landowners are entitled to just compensation and that the lands were similarly situated.

Directions

The Supreme Court directed that the landowners whose lands were acquired for the Jhajjar Thermal Power Plant shall be entitled to compensation at the rate of Rs. 22,00,000 per acre. The landowners shall also be entitled to all the statutory benefits including interest which may be available under the Land Acquisition Act, 1894. However, the landowners in the appeals arising out of RFA Nos. 4322/2016, 4682/2016, 804/2017 and 805/2017 are not entitled to any interest on the enhanced amount of compensation for the period of delay in filing/refiling the appeals before the High Court.

Development of Law

The ratio decidendi of this case is that similarly situated lands acquired for different public projects should receive similar compensation. This judgment clarifies that the phrase “peculiar facts” in previous judgments should be interpreted in the context of the specific issues addressed in those cases. This case reinforces the principle of just compensation in land acquisition cases and ensures that landowners are not unfairly disadvantaged due to the timing of acquisition or the specific project for which their land is acquired.

Conclusion

The Supreme Court allowed the appeals of the landowners, enhancing the compensation for land acquired for the Jhajjar Thermal Power Plant to Rs. 22,00,000 per acre. The Court emphasized the principle of just compensation and the need for parity when lands are similarly situated. This decision ensures that landowners receive fair compensation and clarifies the interpretation of previous judgments.