Supreme Court settles the applicability of Section 28A of the Land Acquisition Act: New Okhla Industrial Development Authority (NOIDA) vs. Yunus & Ors. (03 February 2022)

Introduction

Date of the Judgment: 03 February 2022

Citation: (2022) INSC 111

Judges: K.M. Joseph, J. and Pamidighantam Sri Narasimha, J.

Can a settlement reached in a Lok Adalat be used to claim higher compensation for land acquisition, even if the original claim was not pursued? The Supreme Court of India recently addressed this crucial question, clarifying the scope of Section 28A of the Land Acquisition Act, 1894. This judgment clarifies whether an award passed by a Lok Adalat can be the basis for redetermining compensation for land acquisition. The court held that awards passed by Lok Adalats cannot be used as a basis for claiming higher compensation under Section 28A of the Land Acquisition Act.

The bench comprised Justices K.M. Joseph and Pamidighantam Sri Narasimha. The judgment was authored by Justice K.M. Joseph.

Case Background

The case revolves around land acquired by the New Okhla Industrial Development Authority (NOIDA) in villages within Tehsil Dadri, District Ghaziabad. The acquisition was initiated through a notification under Section 4(1) of the Land Acquisition Act, 1894, issued on March 21, 1983, for planned industrial development.

The Land Acquisition Officer passed an award on November 28, 1984, fixing compensation for the acquired lands at Rs. 24,033 per bigha. The respondents in this case did not seek enhancement of this compensation under Section 18 of the Act. However, one Fateh Mohammed filed a reference against the award, which was later referred to a Lok Adalat.

On March 12, 2016, the Lok Adalat passed an award, increasing the compensation to Rs. 297 per square yard. This award was based on a settlement agreement between the parties, referencing a High Court order that had determined compensation at this rate in a related case.

Following this, the respondents filed applications before the Additional District Magistrate under Section 28A of the Land Acquisition Act, seeking redetermination of their compensation based on the Lok Adalat award. The Additional District Magistrate rejected these applications, stating that the Lok Adalat award was based on a compromise. This rejection led the respondents to file writ petitions before the High Court. The High Court ruled in favor of the respondents, stating that the Lok Adalat award was equivalent to a decree of a Civil Court and could be used to invoke Section 28A of the Land Acquisition Act.

Timeline:

Legal Framework

The case primarily involves the interpretation of Section 28A of the Land Acquisition Act, 1894, which allows for the re-determination of compensation for landowners who did not initially seek an enhancement, based on a court award that has enhanced compensation for other similarly situated landowners.

The Supreme Court also examined the Legal Services Authorities Act, 1987, particularly Section 20, which deals with the cognizance of cases by Lok Adalats, and Section 21, which states that every award of a Lok Adalat is deemed to be a decree of a civil court.

The relevant provisions are:

• Section 28A of the Land Acquisition Act, 1894:
  “Re-determination of the amount of compensation on the basis of the award of the Court. – (1) where in an award under this part, the court allows to the applicant any amount of compensation in excess of the amount awarded by the collector under section 11, the persons interested in all the other land covered by the same notification under section 4, sub-section (1) and who are also aggrieved by the award of the Collector may, notwithstanding that they had not made an application to the Collector under section 18, by written application to the Collector within three months from the date of the award of the Court require that the amount of compensation payable to them may be re-determined on the basis of the amount of compensation awarded by the court…”
• Section 20 of the Legal Services Authorities Act, 1987:
  “Cognizance of Cases by Lok Adalats (1) Where in any case referred to in clause (i) of sub-section (5) of Section 19-(i) (a) The parties thereof agree or (i) (b) One of the parties thereof makes an application to the court, for referring the case to the Lok Adalat for settlement and if such court is prima facie satisfied that there are chances of such settlement or (ii) The court is satisfied that the matter is an appropriate one to be taken cognizance of by the Lok Adalat, the court shall refer the case to the Lok Adalat: Provided that no case shall be referred to the Lok Adalat under sub-clause (b) of clause (i) or clause (ii) by such court except after giving a reasonable opportunity of being heard to the parties.”
• Section 21 of the Legal Services Authorities Act, 1987:
  “Award of Lok Adalat (1) Every award of the Lok Adalat shall be deemed to be a decree of a civil court or, as the case may be, an order of any other court and where a compromise or settlement has been arrived at, by a Lok Adalat in a case referred to under sub-section (1) of Section 20, the court-fee paid in such case shall be refunded in the manner provided under the Court Fees Act, 1870 (7 of 1870). (2) Every award made by a Lok Adalat shall be final and binding on all the parties to the dispute, and no appeal shall lie to any court against the award.”

Arguments

Appellant’s Arguments (NOIDA):

• The appellant argued that Section 28A of the Land Acquisition Act, 1894, requires a determination by a “Court” as defined under the Act. They contended that Lok Adalats, constituted under Section 19 of the Legal Services Authorities Act, 1987, do not have adjudicatory powers and their primary function is to facilitate compromise.
• The appellant submitted that a Lok Adalat award is merely a record of a compromise between parties and not an award by a court under the Land Acquisition Act.
• The appellant argued that the deeming fiction under Section 21 of the Legal Services Authorities Act, 1987, which treats a Lok Adalat award as a decree, should be limited to the purpose of enforceability and not extended to Section 28A of the Land Acquisition Act.
• The appellant relied on judgments such as State of Punjab and Another. v. Jalour Singh and Others, Government of India v. Vedanta Limited and Others and Attar Singh and Another v. Union of India and Anr. to support their contention that a Lok Adalat award cannot be the basis for Section 28A.
• The appellant also highlighted a divergence of opinion among High Courts and supported the view taken by the Bombay High Court in Umadevi Rajkumar Jeure and Others v. District Collector and Others, which held that a Lok Adalat award cannot form the basis for Section 28A.
• The appellant argued that the High Court’s decision in Mangu and others v. State of U.P., which fixed compensation at Rs. 297 per square yard, was based on a notification from 1991, whereas the current case pertains to a notification from 1983. They also mentioned that a review petition against the Mangu decision was pending.

Respondents’ Arguments:

• The respondents contended that the Lok Adalat award was based on the High Court’s decision in Mangu and Others, and it would be unfair for the appellant to avoid the rate fixed in the award.
• The respondents argued that full effect should be given to the legal fiction under Section 21 of the Legal Services Authorities Act, 1987, which treats a Lok Adalat award as a decree of a civil court. They stated that since it is a decree, the process through which the award was arrived at is irrelevant.
• The respondents argued that the deeming provision in Section 21 of the Legal Services Authorities Act, 1987, is wide enough to include the Lok Adalat award as an order of the court under Section 18 of the Land Acquisition Act.
• The respondents emphasized the purpose of Section 28A, which is to ensure just compensation for those who did not pursue remedies due to ignorance, poverty, or backwardness.
• The respondents contended that since their lands were acquired under the same notification as Fateh Mohammed, they should receive the same compensation.
• The respondents relied on the decision of the Supreme Court in Tahera Khatoon (D) by LRs. v. Salambin Mohammad, arguing that the Court should not exercise its discretionary jurisdiction in favor of the appellant under Article 136 of the Constitution.

Sub-Submissions by Parties:

Issues Framed by the Supreme Court

The Supreme Court framed the following issue for consideration:

1. Whether an award passed by a Lok Adalat under Section 20 of the Legal Services Authorities Act, 1987, can form the basis for redetermination of compensation under Section 28A of the Land Acquisition Act, 1894.

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:

Cases:

Legal Provisions:

• Section 2(a) of the Legal Services Authorities Act, 1987: Defines ‘case’.
• Section 2(aaa) of the Legal Services Authorities Act, 1987: Defines ‘Court’.
• Section 2(d) of the Legal Services Authorities Act, 1987: Defines Lok Adalat.
• Section 19 of the Legal Services Authorities Act, 1987: Provides for the organization of Lok Adalats.
• Section 22 of the Legal Services Authorities Act, 1987: Specifies the powers of Lok Adalat.
• Section 23 of the Land Acquisition Act, 1894: Deals with matters to be considered in determining compensation.
• Section 24 of the Land Acquisition Act, 1894: Declares matters to be neglected in determining compensation.
• Section 26 of the Land Acquisition Act, 1894: Deals with the form of the award.

Judgment

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

How each authority was viewed by the Court?

The Court relied on Umadevi Rajkumar Jeure and Others v. District Collector and Others [2021 SCC OnLine Bom 917]* and Thomas Job v. Thomas [2003 (3) KLT 936]*, which held that a Lok Adalat award cannot be the basis for Section 28A of the Land Acquisition Act. The Court distinguished the case of Singirkonda Surekha v. G. V. Sharma and Others [2003 SCC Online AP 21]* on the basis that, in the said case, the Reference Court had passed an Award based on a compromise arrived at between the parties before the Lok Adalat and it was, therefore, a case of an Award made by the Reference Court under Part III of the Act. The Court cited State of Punjab and Another v. Jalour Singh and Others [(2008) 2 SCC 660]*, Government of India v. Vedanta Limited and Others [(2020) 10 SCC 13]* and Attar Singh and Another v. Union of India and Anr. [(2009) 9 SCC 289]* to support the argument that a Lok Adalat award cannot be treated as an award by a Court under the Land Acquisition Act. The Court also cited K.N. Govindan Kutty Menon v. C. D. Shaji [(2012) 2 SCC 511]* to explain the purpose of the legal fiction in Section 21 of the Legal Services Authorities Act, 1987.

What weighed in the mind of the Court?

The Supreme Court emphasized several key points in its reasoning:

• The primary function of a Lok Adalat is to facilitate a compromise or settlement between parties and not to adjudicate disputes.
• Section 28A of the Land Acquisition Act, 1894, specifically requires an award passed by a “Court” as defined in the Act, which does not include a Lok Adalat.
• The deeming fiction in Section 21 of the Legal Services Authorities Act, 1987, which treats a Lok Adalat award as a decree of a civil court, is limited to the purpose of enforceability and cannot be extended to other contexts, such as Section 28A of the Land Acquisition Act.
• The Court highlighted that the award of the Lok Adalat was not a result of an adjudication by a court but a compromise between the parties.
• The Court also emphasized the importance of adhering to the plain language of the statute and the legislative intent behind Section 28A of the Land Acquisition Act.

Sentiment Analysis of Reasons Given by the Supreme Court:

Fact:Law Ratio:

Logical Reasoning:

Final Verdict

The Supreme Court allowed the appeal filed by NOIDA and set aside the judgment of the High Court. The Court held that an award passed by a Lok Adalat under Section 20 of the Legal Services Authorities Act, 1987 cannot be the basis for redetermination of compensation under Section 28A of the Land Acquisition Act, 1894.

The Court clarified that the deeming provision under Section 21 of the Legal Services Authorities Act, 1987, which treats a Lok Adalat award as a decree of a civil court, is limited to the purpose of enforceability and does not extend to Section 28A of the Land Acquisition Act.

Key Takeaways

The Supreme Court’s judgment in New Okhla Industrial Development Authority (NOIDA) vs. Yunus & Ors. has significant implications for land acquisition cases in India:

• Lok Adalat Awards and Section 28A: Awards passed by Lok Adalats cannot be used as a basis for claiming higher compensation under Section 28A of the Land Acquisition Act, 1894. This clarifies the scope of Section 28A and limits its applicability to awards passed by a court of law.
• Deeming Fiction: The deeming fiction under Section 21 of the Legal Services Authorities Act, 1987, is limited to the purpose of enforceability and does not extend to other contexts, such as Section 28A of the Land Acquisition Act.
• Compromise vs. Adjudication: The Court emphasized that a Lok Adalat’s role is to facilitate compromise and settlement, not to adjudicate disputes. Awards based on compromise cannot be treated as court adjudications for the purpose of Section 28A.
• Statutory Interpretation: The judgment reinforces the principle of strict interpretation of statutes and the importance of adhering to the plain language of the law.
• Impact on Landowners: Landowners who have not sought enhancement of compensation under Section 18 of the Land Acquisition Act will not be able to rely on Lok Adalat awards to seek redetermination of compensation under Section 28A.

Author of the Judgment

The judgment was authored by Justice K.M. Joseph, with the bench also comprising Justice Pamidighantam Sri Narasimha.