Supreme Court Orders Additional Compensation for Land Acquisition Delay: Subodh Singh vs. Union of India (2024)

Date of the Judgment: May 16, 2024
Citation: 2024 INSC 458
Judges: Hima Kohli, J. and Ahsanuddin Amanullah, J.
Can the government arbitrarily limit compensation for land acquisition delays? The Supreme Court recently addressed this question in a case involving land acquired for railway infrastructure. The Court ruled that landowners are entitled to additional compensation for delays in payment, calculated at a minimum of 5% per month, and clarified that this compensation cannot be arbitrarily limited. This judgment, delivered by a bench of Justices Hima Kohli and Ahsanuddin Amanullah, emphasizes the importance of fair compensation and timely payments in land acquisition cases.

Case Background

The case revolves around land acquisition in Village Kakrahi, Uttar Pradesh, for a railway project. The initial notifications for acquisition were issued on June 10, 2008, and December 16, 2008, under Section 20(E)(1) of the Indian Railways Act, 1989. An award was declared on February 8, 2010, but it excluded a small portion of land (0.0624 Hectare). This led to a series of legal challenges.

The petitioner, Subodh Singh, initially filed a writ petition challenging the exclusion of his land from the award. The High Court ruled in his favor on May 12, 2010. However, the Union of India appealed to the Supreme Court. On March 30, 2011, the Supreme Court overturned the High Court’s decision, stating that the acquisition had not lapsed. The Supreme Court also directed that the landowner was entitled to additional compensation for the delay in making the payment, as per the second proviso to Section 20F(2) of the Indian Railways Act, 1989, at a rate not less than 5% per month of the award value for each month of delay.

Following the Supreme Court’s order, the authorities issued another certificate on December 12, 2008, again excluding the same 0.0624 Hectare of land. This led to another writ petition by the appellant. The High Court again ruled in favor of the appellant on September 20, 2016, ordering compensation for the left-out land along with additional compensation. The respondents then issued a bank draft on November 19, 2016, but limited the additional compensation to a period of two months, which the appellant contested.

Timeline

Course of Proceedings

Initially, the appellant challenged the exclusion of his land from the acquisition award in a writ petition before the High Court of Judicature at Allahabad. The High Court allowed the petition, but this was overturned by the Supreme Court in an appeal. The Supreme Court clarified that the acquisition had not lapsed and directed additional compensation as per Section 20F(2) of the Indian Railways Act, 1989. Despite this, the authorities again excluded the same portion of land, leading to another writ petition. The High Court ruled in favor of the appellant again, directing compensation for the left-out land. However, when the respondents limited the additional compensation to two months, the appellant filed another petition, which was dismissed, and the appellant was directed to approach the arbitrator. This led to the current appeal before the Supreme Court.

Legal Framework

The core legal provision at the heart of this case is Section 20F(2) of the Indian Railways Act, 1989. This section deals with compensation for land acquired under the Act. The second proviso to Section 20F(2) specifically addresses delays in making the award. It states:

“Provided further that the competent authority or the arbitrator, as the case may be, shall, while determining the amount of compensation under sub-section (1) or sub-section (2), also award an amount calculated at the rate of not less than five per cent of such amount for each month of delay in making the award.”

This provision mandates that if there is a delay in making the compensation award, the landowner is entitled to additional compensation at a rate not less than 5% of the award amount for each month of delay. The Supreme Court interpreted this provision to mean that additional compensation for delays must be paid, and that the authorities cannot arbitrarily limit the period for which this compensation is paid.

Arguments

Appellant’s Arguments:

• The appellant argued that the respondents had adopted a “pick and choose” policy. While other similarly situated landowners (Smt. Kamla Devi & Ors.) received additional compensation for a delay of 66 months, the appellant’s compensation was limited to only two months, despite the delay being 84 months.
• The appellant contended that the High Court’s order of September 20, 2016, only specified a two-month period for making the payment, not for limiting the additional compensation.
• The appellant relied on the Supreme Court’s order of March 30, 2011, which clearly stated that additional compensation should be paid for the delay in making the award at a rate not less than 5% per month, as per the second proviso to Section 20F(2) of the Indian Railways Act, 1989.

Respondents’ Arguments:

• The respondents argued that the High Court’s order of September 20, 2016, limited the additional compensation to two months.
• They contended that there was no specific direction from either the Supreme Court or the High Court to pay compensation for a delay period beyond two months.

Issues Framed by the Supreme Court

The Supreme Court addressed the following issue:

1. Whether the appellant was entitled to additional compensation for the delay in making the award for the left out portion of land, and if so, for what period?

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

• The second proviso to Section 20F (2) of the Indian Railways Act, 1989.
• Dedicated Freight Corridor Corporation of India Vs. Subodh Singh, (2011) 11 SCC 100, Supreme Court of India.

Judgment

How each authority was viewed by the Court?

• The second proviso to Section 20F (2) of the Indian Railways Act, 1989 was the basis for the Court’s decision. The Court relied on the provision to determine the minimum rate of additional compensation for the delay in making the award.
• The Supreme Court in Dedicated Freight Corridor Corporation of India Vs. Subodh Singh, (2011) 11 SCC 100* was followed. The Court referred to its previous order in this case, which had already clarified that the landowner was entitled to additional compensation for the delay in making the award as per Section 20F(2) of the Indian Railways Act, 1989.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need for fairness and consistency in applying the law. The Court noted that the respondents had arbitrarily limited the additional compensation for the appellant to two months, while other similarly situated landowners received compensation for a delay of 66 months. This differential treatment was a major factor in the Court’s decision.

The Court also emphasized the clear mandate of the second proviso to Section 20F(2) of the Indian Railways Act, 1989, which requires payment of additional compensation for delays in making the award at a rate not less than 5% per month. The Court clarified that this provision does not allow for arbitrary limitations on the period for which such compensation is paid.

The Supreme Court held that the High Court’s order of September 20, 2016, only specified a time period for payment and not for limiting the additional compensation. The Court also reiterated its previous order of March 30, 2011, which had clarified that the landowner was entitled to additional compensation for the delay in making the award as per the second proviso to Section 20F(2) of the Indian Railways Act, 1989. The Court stated,

“It is apparent from the above that the appellant would be entitled to additional compensation for the delay in making the award @ not less than 5% of the value of the award for each month’s delay.”

The Court emphasized that there was no reason to relegate the appellant to arbitration proceedings when the manner of calculating compensation was already clarified by the Supreme Court’s earlier order.

The Court also noted,

“In our opinion, there was no reason for the High Court to have relegated the appellant to initiate any arbitration proceedings for determining the additional compensation when the order passed by this Court had clarified the manner in which compensation would be calculated and paid for the delay in making the award for the left out parcel of land.”

The Court further stated,

“The period of two months referred to by the High Court in its order dated 20th September, 2016 was only for making payment of the amount. Not that any direction was issued to the respondents to confine the payment of additional compensation only to a period of two months.”

The Court found no dissenting opinions. The bench comprised of Justices Hima Kohli and Ahsanuddin Amanullah.

Key Takeaways

• Landowners are entitled to additional compensation for delays in land acquisition payments, at a rate not less than 5% per month, as per the second proviso to Section 20F(2) of the Indian Railways Act, 1989.
• Government authorities cannot arbitrarily limit the period for which additional compensation is paid.
• Courts will ensure fairness and consistency in the application of compensation laws.

Directions

The Supreme Court directed the respondents to:

• Pay additional compensation to the appellant for the left-out portion of land at a rate of at least 5% of the value of the award for a period of 84 months.
• Adjust the amount already paid by the respondents towards the delay (i.e., for a period of two months).
• Release the remaining amount within eight weeks from the date of the order.
• Pay simple interest on the outstanding amount calculated at 7% per annum from the date the said amount became due and payable, till the same is realized.

Development of Law

The ratio decidendi of this case is that the second proviso to Section 20F(2) of the Indian Railways Act, 1989, mandates that landowners are entitled to additional compensation for delays in making the award, at a rate not less than 5% of the award value for each month of delay, and that this compensation cannot be arbitrarily limited by the authorities. This judgment reinforces the principle of fair compensation and timely payments in land acquisition cases, and clarifies that the authorities must adhere to the statutory provisions and cannot adopt a pick and choose policy. There is no change in the previous position of law, but it reinforces the existing position.

Conclusion

In conclusion, the Supreme Court allowed the appeal, holding that the appellant was entitled to additional compensation for the left-out portion of land at a rate of at least 5% of the value of the award for a period of 84 months. The Court emphasized that the authorities cannot arbitrarily limit the period for which additional compensation is paid and directed the respondents to make the necessary payments within eight weeks, along with interest on the outstanding amount. This judgment reinforces the importance of fair and timely compensation in land acquisition cases.

Category

• Land Acquisition
• Compensation for Land Acquisition
• Delay in Compensation
• Section 20F, Indian Railways Act, 1989
• Indian Railways Act, 1989
• Section 20F, Indian Railways Act, 1989

FAQ

Q: What is the main issue in the Subodh Singh vs. Union of India case?

A: The main issue was whether the government could arbitrarily limit the additional compensation for delays in land acquisition payments.

Q: What did the Supreme Court decide about additional compensation for land acquisition delays?

A: The Supreme Court ruled that landowners are entitled to additional compensation for delays in land acquisition payments, calculated at a minimum of 5% per month, as per Section 20F(2) of the Indian Railways Act, 1989, and that this compensation cannot be arbitrarily limited.

Q: What is Section 20F(2) of the Indian Railways Act, 1989?

A: Section 20F(2) of the Indian Railways Act, 1989, deals with compensation for land acquired under the Act. The second proviso to this section mandates that if there is a delay in making the compensation award, the landowner is entitled to additional compensation at a rate not less than 5% of the award amount for each month of delay.

Q: What does this ruling mean for landowners whose land is acquired by the government?

A: This ruling means that landowners are entitled to fair and timely compensation for their land, and if there are delays in payment, they are entitled to additional compensation at a rate not less than 5% per month, and that this compensation cannot be arbitrarily limited by the government.

Q: What should I do if I am facing delays in receiving compensation for my land acquired by the government?

A: You should consult with a legal professional to understand your rights and options. This ruling provides a legal basis for claiming additional compensation for delays in payment.