Supreme Court settles locus standi of subsequent purchasers in land acquisition challenges: Government of NCT of Delhi vs. M/s. Beads Properties Pvt. Ltd. (13 March 2023)

Date of the Judgment: 13 March 2023
Citation: 2023 INSC 213
Judges: M.R. Shah, J. and C.T. Ravikumar, J.

Can a person who buys land after the government has already started the process of acquiring it challenge that acquisition? The Supreme Court of India recently addressed this question, clarifying that such subsequent purchasers do not have the right to contest the acquisition. This judgment clarifies the legal standing of those who purchase land after the initial steps of acquisition have been taken by the government. The bench comprised Justices M.R. Shah and C.T. Ravikumar, with the judgment authored by Justice M.R. Shah.

Case Background

The case revolves around a piece of land that the Government of NCT of Delhi sought to acquire. The initial notification for acquisition under Section 4 of the Land Acquisition Act, 1894 was issued on November 25, 1980. Following this, a declaration under Section 6 was made on June 7, 1985, and the award under Section 11 was published on July 9, 1987. M/s. Beads Properties Pvt. Ltd., the original writ petitioner and respondent in this appeal, purchased the land in 1990, after all these acquisition proceedings had already taken place. The original owners of the land, Parvati Jain, Lajja Ram, and D.L. Parti, never challenged the acquisition.

Timeline

Course of Proceedings

The High Court of Delhi had previously ruled in favor of M/s. Beads Properties Pvt. Ltd., stating that the acquisition of the land had lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The High Court did not address the issue of whether a subsequent purchaser had the right to challenge the acquisition. This decision was appealed by the Government of NCT of Delhi to the Supreme Court.

Legal Framework

The case primarily involves the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which deals with the lapsing of land acquisition proceedings. However, the Supreme Court’s judgment focuses on the legal principle of locus standi, specifically whether a subsequent purchaser of land has the right to challenge acquisition proceedings initiated before their purchase. The Land Acquisition Act, 1894 was also relevant as the acquisition proceedings were initiated under this Act.

Arguments

The appellants, the Government of NCT of Delhi, argued that:

• The original owners of the land (Parvati Jain, Lajja Ram, and D.L. Parti) never challenged the acquisition proceedings.
• M/s. Beads Properties Pvt. Ltd. purchased the land after the notification under Section 4 of the Land Acquisition Act, 1894 was issued.
• As a subsequent purchaser, M/s. Beads Properties Pvt. Ltd. had no legal standing (locus standi) to challenge the acquisition or its lapsing.

The respondent, M/s. Beads Properties Pvt. Ltd., contended that the acquisition had lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. However, the Supreme Court did not delve into the merits of this argument, focusing instead on the question of locus standi.

Innovativeness of the argument: The argument by the Government of NCT of Delhi was based on the established principle of locus standi, which was upheld by the Supreme Court. The argument by M/s. Beads Properties Pvt. Ltd. was innovative as it sought to take advantage of the lapsing clause under the 2013 Act, but the court did not consider this argument because of the lack of locus standi.

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was:

1. Whether a subsequent purchaser has the legal standing (locus standi) to challenge the acquisition of land or the lapsing of acquisition proceedings.

Treatment of the Issue by the Court

Authorities

The Supreme Court relied on the following cases:

• Shiv Kumar & Anr. Vs. Union of India & Ors., (2019) 10 SCC 229: The Supreme Court cited this case to support its view that a subsequent purchaser does not have the right to challenge the acquisition of land.
• Delhi Development Authority Vs. Godfrey Phillips (I) Ltd. & Ors., Civil Appeal No. 3073 of 2022: This case was also cited to reinforce the principle that a subsequent purchaser lacks locus standi in acquisition challenges.

Judgment

The Supreme Court, citing Shiv Kumar & Anr. Vs. Union of India & Ors., (2019) 10 SCC 229 and Delhi Development Authority Vs. Godfrey Phillips (I) Ltd. & Ors., Civil Appeal No. 3073 of 2022, held that a subsequent purchaser does not have the locus standi to challenge the acquisition or its lapsing. The Court emphasized that the original owners did not challenge the acquisition proceedings, and therefore, the subsequent purchaser could not do so either. The High Court’s decision was quashed, and the acquisition proceedings were upheld.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily driven by the principle of locus standi, which dictates that only a party with a direct and substantial interest in a matter can bring a legal challenge. The Court emphasized that the original owners, who had a direct interest in the land at the time of acquisition, did not challenge the proceedings. Therefore, the subsequent purchaser, who acquired the land after the acquisition process had begun, did not have the right to challenge the acquisition. The court’s reasoning was based on the following points:

• The original owners did not challenge the acquisition, indicating their acceptance or lack of objection to the proceedings.
• The subsequent purchaser acquired the land with full knowledge of the ongoing acquisition proceedings, thus assuming the risk associated with it.
• Allowing subsequent purchasers to challenge acquisitions would create uncertainty and disrupt the land acquisition process.

The Court’s reasoning was primarily based on legal principles and precedents, with a lesser emphasis on the specific factual aspects of the case.

The Supreme Court did not consider any alternative interpretations, as the legal position on locus standi for subsequent purchasers was clear based on previous judgments. The Court’s decision was based on established legal principles and precedents.

The Supreme Court held that the High Court erred in entertaining the writ petition filed by the subsequent purchaser. The Court quashed the High Court’s order and held that there would be no deemed lapse of the acquisition proceedings.

The Court’s decision was unanimous, with both judges agreeing on the outcome and reasoning.

“In the aforesaid decisions and the other subsequent decisions, it is specifically observed and held that the subsequent purchaser has no locus to challenge the acquisition / lapsing of the acquisition.”

“From the averments in the writ petition (paragraph 3), the original writ petitioner purchased the lands thereafter, i.e., in the year 1990.”

“Therefore, it was the case on behalf of the appellant before the High Court that the original writ petitioner being the subsequent purchaser had no locus to challenge the acquisition / lapsing of the acquisition.”

Key Takeaways

• Subsequent purchasers of land cannot challenge land acquisition proceedings that were initiated before their purchase.
• The principle of locus standi prevents those who acquire land after the start of acquisition from contesting it.
• This ruling reinforces the finality of land acquisition proceedings and prevents disruptions by subsequent purchasers.

Directions

The Supreme Court did not issue any specific directions, other than quashing the High Court’s order and upholding the acquisition proceedings.

Development of Law

The ratio decidendi of this case is that a subsequent purchaser of land does not have the locus standi to challenge the acquisition of that land or the lapsing of the acquisition proceedings. This judgment reinforces the position of law established in previous Supreme Court decisions, thus solidifying the legal principle regarding the rights of subsequent purchasers in land acquisition cases.

Conclusion

The Supreme Court’s judgment in Government of NCT of Delhi vs. M/s. Beads Properties Pvt. Ltd. clarifies that individuals or entities who purchase land after the initiation of acquisition proceedings do not have the legal standing to challenge those proceedings. This decision upholds the principle of locus standi and ensures that land acquisition processes are not disrupted by subsequent purchasers.

Category

Parent category: Land Acquisition Law

Child categories: Locus Standi, Subsequent Purchaser, Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, Section 24(2), Land Acquisition Act, 1894

FAQ

Q: What does “locus standi” mean in this context?

A: “Locus standi” refers to the right or capacity to bring a legal action or to appear in a court. In this case, it refers to whether a person has the right to challenge the acquisition of land.

Q: If I buy land after the government has started acquiring it, can I challenge the acquisition?

A: According to this Supreme Court judgment, you cannot challenge the acquisition if you purchase the land after the acquisition process has begun.

Q: What should I do if I am planning to buy land that might be under acquisition?

A: It is crucial to conduct thorough due diligence to check if any acquisition proceedings have been initiated before purchasing any land. If proceedings have started, you should be aware that you will likely not be able to challenge them.

Q: What is the significance of this judgment?

A: This judgment clarifies the legal position of subsequent purchasers in land acquisition cases, ensuring that the process is not disrupted by those who buy land after acquisition proceedings have commenced. It reinforces the principle that only those with a direct interest at the time of acquisition can challenge it.