Supreme Court Relieves Landowners from Returning Excess Compensation in Haryana Land Acquisition Case (2021)

Date of the Judgment: 8 April 2021
Citation:
Judges: Uday Umesh Lalit, J., Dr. Dhananjaya Y Chandrachud, J.

Can landowners be compelled to return compensation that they received based on earlier court orders, if the final compensation amount is less? The Supreme Court addressed this issue in a case concerning land acquisition in Haryana. The court considered whether landowners who had already received compensation based on previous court orders should be required to return the excess amount after the final compensation was reduced. The judgment was delivered by a two-judge bench comprising Justice Uday Umesh Lalit and Justice Dr. Dhananjaya Y Chandrachud.

Case Background

The case involves land acquisition for industrial development in Haryana. The initial notifications for land acquisition were issued in 2002 for different phases of the Industrial Model Township, Manesar, Gurgaon. The Land Acquisition Collector made awards in 2003 and 2004. The Reference Court, dealing with objections, enhanced the compensation in 2009 and 2010. Subsequently, the High Court further increased the compensation, relying on a previous Supreme Court decision. However, the Supreme Court later remanded the matter back to the High Court, which again increased the compensation. Ultimately, the Supreme Court in *Wazir vs. State of Haryana* (2019) fixed different compensation rates for different villages. This led to the current issue of whether landowners should return the excess amount they had received based on earlier, higher rates.

Timeline

Course of Proceedings

Initially, the Reference Court enhanced compensation based on Section 18 of The Land Acquisition Act, 1894. The High Court further increased it, relying on the Supreme Court’s decision in *Pran Sukh*. However, the Supreme Court in *Haryana State Industrial Development Corporation Limited vs. UDAL and Others* (2013) set aside the High Court’s decision and remanded the matter. Post-remand, the High Court again increased the compensation, which was challenged before the Supreme Court. The Supreme Court in *Wazir vs. State of Haryana* (2019) fixed different compensation rates for different villages. This led to the issue of excess compensation paid to landowners from the villages of Bas Kusla, Bas Haria, and Dhana, as the compensation was reduced for these villages in the final judgment.

Legal Framework

The case primarily revolves around the interpretation and application of The Land Acquisition Act, 1894, specifically Section 4, which deals with preliminary notification for land acquisition, and Section 18, which allows landowners to seek a reference to the court for determination of compensation. The Supreme Court also invoked Article 142 of the Constitution of India, which grants the court the power to pass orders necessary for doing complete justice in any cause or matter pending before it.


The relevant sections of The Land Acquisition Act, 1894 are:

• Section 4: “Publication of preliminary notification and powers of officers thereupon.—(1) Whenever 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, and the Collector shall cause public notice of the substance of such notification to be given at convenient places in the said locality.”
• Section 18: “Reference to Court.—(1) Any person interested 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, whether his objection be to the measurement of the land, the amount of the compensation, the persons to whom it is payable, or the apportionment of the compensation among the persons interested.”

Arguments

Landowners’ Arguments:

• The lands from all villages were always considered without any distinction by the Reference Court and the High Court.
• The decision in *HSIDC vs. UDAL* contemplated a minimum compensation of Rs. 37,40,000/- per acre.
• After *HSIDC vs. UDAL*, the only issue was whether landholders were entitled to increased compensation, not decreased compensation.
• Landholders had already received compensation at Rs. 28,15,356/- per acre with statutory benefits, and additional compensation at Rs. 9,24,644/- per acre, totaling Rs. 37,40,000/- per acre.
• The landholders have already spent the compensation money and cannot repay the difference as directed by the Supreme Court in *Wazir vs. State of Haryana*.
• The burden of additional compensation was passed on to subsequent allottees.

HSIIDC’s Submissions:

• The extent of land from the three villages (Bas Haria, Bas Khusla, and Dhana) is 980.70625 acres.
• Enhanced compensation of Rs. 925.26 crores was paid to the landowners.
• The entire saleable land has been allotted at an average rate of Rs. 2784 per sq. meter.
• A sum of Rs. 1057.40 crores has been collected from allottees as additional compensation.

Analysis of Arguments:
The landowners argued that the previous decisions of the court had established a minimum compensation which could not be reduced. They also contended that they had already spent the money and it would be impossible for them to return the excess. HSIIDC, on the other hand, provided data on land area, compensation paid, and the amount recovered from subsequent allottees. The innovativeness of the argument is that the landowners are seeking to retain the compensation already paid to them, based on the principle of equity, as they had already spent the money and the burden had been passed on to the allottees.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in this order. However, the core issue was:

1. Whether the landowners should be required to return the excess compensation received due to prior court orders, when the final compensation was reduced.

Treatment of the Issue by the Court

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

Authorities

The court considered the following authorities:

Judgment

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

How each authority was viewed by the Court?

• Haryana State Industrial Development Corporation vs. Pran Sukh & Ors. [(2010) 11 SCC 175]:* The court noted that this case was initially relied upon by the Reference Court to enhance compensation but was later distinguished.
• Haryana State Industrial Development Corporation Limited vs. UDAL and Others [(2013) 14 SCC 506]:* The court clarified that this judgment did not establish a minimum compensation, and all points were to be decided afresh.
• Satish Kumar Gupta and Others Vs. State of Haryana and Others [(2017) 4 SCC 760]:* This case was relied upon to set aside the High Court’s decision in *Madan Pal (II)*.
• Wazir vs. State of Haryana [(2019) 13 SCC 101]:* The court acknowledged that this judgment fixed the final compensation rates, which led to the issue of excess compensation.
• Article 142 of the Constitution of India: The court invoked this article to do complete justice and relieve the landowners from returning the excess compensation.

What weighed in the mind of the Court?

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

• The landowners had already received and spent the compensation based on previous court orders.
• The burden of additional compensation had been passed on to subsequent allottees.
• Requiring the landowners to return the excess amount would cause hardship and entail revenue recovery proceedings.
• The court invoked Article 142 of the Constitution to do complete justice and prevent further complications.

The court’s sentiment was that it would be unjust to require the landowners to return the money, especially since the authorities had already recovered the excess from the allottees. The court aimed to achieve a balance between the legal requirements and the practical realities of the situation.

Logical Reasoning:

Judgment

The Supreme Court allowed the applications, modifying its earlier direction in *Wazir vs. State of Haryana*. The court held that while the compensation fixed at Rs. 29,77,333/- per acre for the concerned villages remained unchanged, the landowners who had already received compensation at the rate of Rs. 37,40,000/- per acre were not required to return the excess amount. The court invoked Article 142 of the Constitution to ensure complete justice. The court also clarified that the subsequent allottees could not maintain any action for refund based on this order.

The court stated:

• “The amount of compensation fixed at Rs.29,77,333/ – per acre in respect of lands from the concerned villages as held in the Judgment in Wazir vs. State of Haryana remains unchanged.”
• “As the compensation at the rate of Rs.37,40,000/ – per acre has been received by the landholders from the concerned villages in the circumstances stated hereinabove, such landholders need not return the amounts over and above what has been found due to them.”
• “To the extent as indicated above, direction (e) in the Judgment in Wazir vs. State of Haryana, stands modified.”

Key Takeaways

• Landowners from the villages of Bas Kusla, Bas Haria, and Dhana are not required to return the excess compensation they received.
• The Supreme Court can use its powers under Article 142 of the Constitution to ensure complete justice and address unique situations.
• Subsequent allottees of the land cannot claim refunds based on this order.
• This case highlights the complexities of land acquisition and compensation processes in India.

Directions

The Supreme Court directed that the landowners from the concerned villages were not required to return the excess compensation they had received. The direction in *Wazir vs. State of Haryana* requiring the return of excess compensation was modified to this extent.

Development of Law

The ratio decidendi of this case is that the Supreme Court, in exercise of its powers under Article 142 of the Constitution, can relieve landowners from returning excess compensation when the circumstances warrant it, particularly when the landowners have already spent the money and the burden has been passed on to subsequent allottees. This decision does not change the law on land acquisition or compensation, but it provides an exception based on the unique facts of the case. The court has essentially carved out an exception to the rule of restitution, where the excess compensation is not required to be returned by the landowners.

Conclusion

In conclusion, the Supreme Court’s decision in this case provided relief to landowners from the villages of Bas Kusla, Bas Haria, and Dhana, who were not required to return the excess compensation they had received. The court exercised its powers under Article 142 of the Constitution to ensure complete justice, considering the unique circumstances of the case. This decision highlights the court’s willingness to address practical realities and prevent undue hardship.

Category

Parent Category: Land Acquisition Law
Child Categories:

• Compensation
• Article 142, Constitution of India
• The Land Acquisition Act, 1894
• Section 4, The Land Acquisition Act, 1894
• Section 18, The Land Acquisition Act, 1894

FAQ

Q: What was the main issue in this case?
A: The main issue was whether landowners should be required to return excess compensation they had received based on earlier court orders, after the final compensation was reduced.

Q: What did the Supreme Court decide?
A: The Supreme Court decided that the landowners were not required to return the excess compensation.

Q: Why did the Supreme Court make this decision?
A: The court considered that the landowners had already spent the money, the burden had been passed on to subsequent allottees, and requiring a refund would cause hardship. The court used its powers under Article 142 of the Constitution to do complete justice.

Q: What is Article 142 of the Constitution?
A: Article 142 of the Constitution gives the Supreme Court the power to pass orders necessary for doing complete justice in any cause or matter pending before it.

Q: What does this mean for future land acquisition cases?
A: This case provides an exception based on the unique facts of this case. It does not change the law on land acquisition or compensation. However, it shows that the Supreme Court is willing to consider practical realities and prevent undue hardship.

Q: Can subsequent allottees seek a refund based on this order?
A: No, the Supreme Court specifically clarified that subsequent allottees cannot maintain any action for refund based on this order.