Supreme Court Rules Against State in Land Acquisition Case: D.B. Basnett vs. The Collector (2020) INSC 178 (2 March 2020)

Date of the Judgment: 2 March 2020
Citation: (2020) INSC 178
Judges: Sanjay Kishan Kaul, J., K.M. Joseph, J.
Can a state government claim ownership of land without following due process of law and providing fair compensation? The Supreme Court of India recently addressed this critical question in a land acquisition dispute, emphasizing the importance of adhering to legal procedures and protecting citizens’ property rights. The Court ruled in favor of the original landowner’s family, stating that the State had failed to prove lawful acquisition. The judgment was delivered by a division bench comprising Justice Sanjay Kishan Kaul and Justice K.M. Joseph.

Case Background

In 1980, the Agriculture Department of the Government of Sikkim (respondent No. 2) sought to acquire 8.36 acres of land in Dundung Block, Sang, East Sikkim, to build the Progeny Orchard Regional Centre. The land was recorded under two names: 1.29 acres in the name of the Maharaja of Sikkim and 7.07 acres in the name of Man Bahadur Basnett, the father of the original appellant. The dispute concerns the 7.07 acres of land owned by Man Bahadur Basnett. Man Bahadur Basnett passed away in 1991, and the property was inherited by his son, D.B. Basnett (now represented by his two sons). In March 2002, D.B. Basnett discovered that the respondents had allegedly encroached upon his land and were using it as an agricultural farm. He served a notice under Section 80 of the Code of Civil Procedure, 1908, on April 5, 2002, seeking possession of the land. When no response was received, he filed a suit before the Court of District Judge (E&N), Gangtok, Sikkim, on December 9, 2002.

Timeline:

Course of Proceedings

The trial court dismissed the suit on October 31, 2006, citing both limitation and substantive merits. The court noted that stamped receipts of compensation payment were mentioned in the record, though the actual receipt was not available. The court also considered correspondence and a letter from Man Bahadur Basnett consenting to the transfer of the property upon payment of compensation. On appeal, the High Court of Sikkim dismissed the appeal on May 29, 2008. While the High Court disagreed with the trial court on the issue of limitation, it agreed with the trial court on the substantive merits. The High Court noted that no notification under the Sikkim Land (Requisition and Acquisition) Act, 1977, was produced, nor were the signed and stamped receipts. The High Court also noted the inconsistent stand of the government in claiming acquisition while still collecting land revenue. Despite these observations, the High Court relied on a letter from Man Bahadur Basnett consenting to the acquisition if compensation was paid and a letter from the Land Revenue Department forwarding the compensation. The High Court directed the government to refund the land revenue if claimed by the appellant. The Supreme Court granted leave to appeal on January 7, 2011.

Legal Framework

The case revolves around the Sikkim Land (Requisition and Acquisition) Act, 1977, which is similar to the Land Acquisition Act, 1894. The Act requires a notification under Section 4 for acquisition of land, an opportunity for interested persons to file claims under Section 5, and determination of compensation under Section 7. The Supreme Court noted that the procedure under Section 4(1) of the Land Acquisition Act, 1894, which is akin to Section 5(1) of the Sikkim Land (Requisition and Acquisition) Act, 1977, is mandatory. The Court also referred to Article 300A of the Constitution of India, which states that no person shall be deprived of their property save by authority of law.

The relevant provisions of the Sikkim Land (Requisition and Acquisition) Act, 1977 are:

• Section 4: Notification for acquisition of land.
• Section 5: Opportunity to interested persons to file claims.
• Section 7: Determination of the amount of compensation.

The relevant provision of the Land Acquisition Act, 1894 is:

• Section 4(1): Publication of Preliminary Notification and Powers of Officers thereupon.

The relevant provision of the Constitution of India is:

• Article 300A: No person shall be deprived of his property save by authority of law.

Arguments

The appellant argued that the respondents had trespassed on his land as the procedure under the Sikkim Land (Requisition and Acquisition) Act, 1977, was not followed. Specifically, no notification of acquisition was published, and no process for acquisition was followed. The respondents argued that the Agriculture Department had followed due process in 1980, paying Rs. 62,645 as compensation to Man Bahadur Basnett through the Land Revenue Department. They claimed peaceful possession of the land as a result. They also stated that they had no knowledge of the rent being paid to the government by the appellant.

The arguments can be summarized as follows:

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was whether the process of acquisition of land had been followed in accordance with law.

Treatment of the Issue by the Court

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

Authorities

The following authorities were considered by the court:

The following legal provisions were considered by the court:

Judgment

The Supreme Court held that the respondents failed to establish that they had acquired the land in accordance with law and paid due compensation. The Court noted that no notification of intent to acquire land was produced, nor were any records of the acquisition process available. The Court found that the State’s reliance on a consent letter from Man Bahadur Basnett and a covering letter for payment of compensation was insufficient without proof of the acquisition process.

The following authorities were viewed by the Court as follows:

• N. Padmamma & Ors. v. S. Ramakrishna Reddy &Ors. (2008) 15 SCC 517* was used to emphasize that the provisions of any Act seeking to divest a person of their property rights must be strictly followed.
• Narinderjit Singh & Ranjit Singh & Ors. v. State of U.P . &Ors., Etc. (1973) 1 SCC 157* was used to support the view that failing to give notice as per Section 4(1) of the Land Acquisition Act, 1894, would render the acquisition proceedings invalid.
• Vidya Devi v. State of Himachal Pradesh (2020) 2 SCC 569* was used to discuss the evolution of the right to property, emphasizing that while it is no longer a fundamental right, it remains a constitutional right under Article 300A.
• The State of West Bengal v. Subodh Gopal Bose and Ors. AIR 1954 SC 92* was used to highlight that Article 31 of the Constitution guaranteed the right to private property, which could not be deprived without due process of law and just compensation.
• Tukaram Kana Joshi & Ors. v. M.I.D.C. & Ors. (2013) 1 SCC 353* was used to emphasize that the right to property remains a human right in a welfare state and a constitutional right under Article 300A.
• K T Plantation Pvt. Ltd. v. State of Karnataka (2011) 9 SCC 1* was used to support the view that the obligation to pay compensation can be inferred in Article 300A.
• Hindustan Petroleum Corporation Ltd. v. Darius Shapur Chennai (2005) 7 SCC 627* was used to emphasize that the State’s power of “eminent domain” must be exercised for a public purpose with reasonable compensation.
• Delhi Airtech Services Pvt. Ltd. & Ors. v. State of U.P .& Ors. (2011) 9 SCC 354* was used to recognize the right to property as a basic human right and an indispensable safeguard against tyranny.
• Jilubhai Nanbhai Khachar v. State of Gujarat, (1995) Supp. 1 SCC 596* was used to highlight that Article 300A limits the State’s powers and that deprivation of property must be done by authority of law.
• P.S. Sadasivaswamy v. State of T.N. (1975) 1 SCC 152* was used to emphasize that a constitutional court would exercise its jurisdiction to promote justice, not defeat it.
• LAO v. M. Ramakrishna Reddy, (2011) 11 SCC 648* was used to support the view that the owner can be entitled to damages for wrongful use and possession of land in respect of which no notification is issued under Section 4 of the Land Acquisition Act.

What weighed in the mind of the Court?

The Court was primarily influenced by the lack of evidence from the State regarding the acquisition process. The absence of a notification under Section 4 of the Sikkim Land (Requisition and Acquisition) Act, 1977, and the failure to provide proof of compensation payment were critical factors. The Court emphasized that while the right to property is no longer a fundamental right, it remains a constitutional right under Article 300A, and the State must follow due process of law when acquiring property. The Court also considered the fact that the State was collecting land revenue from the appellant while claiming to have acquired the land, which was an inconsistent stand.

The Court’s reasoning can be summarized in the following logical flowchart:

The Court stated:

“There cannot be a presumption of acquisition without following the due process as envisaged under Sections 3(1), 4(2), 5(1) and 7(2) of the said Act.”

“The burden was on the State to prove that the process as envisaged under the said Act was followed and the compensation paid.”

“To forcibly dispossess a person of his private property, without following due process of law, would be violative of a human right, as also the constitutional right under Article 300 A of the Constitution.”

There were no dissenting opinions in this case.

Key Takeaways

• The State must strictly adhere to the legal procedures for land acquisition.
• The State must provide clear evidence of following due process, including notifications and proof of compensation payment.
• The right to property, though not a fundamental right, is a constitutional right under Article 300A, and cannot be taken away without due process of law.
• Citizens are entitled to damages for illegal use and occupation of their land by the State.

Directions

The Supreme Court directed that the appellant would be entitled to the possession of the land. The Court also directed that the appellant would be entitled to damages for illegal use and occupation of the same by the respondents, at least, for a period of three (3) years prior to the notice having been served upon them. The Court also gave three months’ time to the respondent-State to decide whether to acquire the land through a proper notification or surrender possession. The Court also directed that mesne profits would be determined by a Court Commissioner.

Development of Law

The ratio decidendi of the case is that the State cannot claim ownership of land without following the due process of law as prescribed under the relevant statute, and without providing proof of compensation. This judgment reinforces the importance of Article 300A of the Constitution of India, which protects the right to property. The judgment also clarifies that the State cannot rely on a consent letter for acquisition without following the due process of law.

Conclusion

The Supreme Court’s judgment in D.B. Basnett vs. The Collector underscores the importance of adhering to legal procedures in land acquisition cases. The Court ruled in favor of the appellant, emphasizing the State’s failure to provide evidence of due process and compensation. This decision reinforces the constitutional right to property and serves as a reminder that the State must act within the bounds of law when acquiring private land.