Supreme Court Upholds Compensation for Landowners in Noida Land Acquisition Case

Date of the Judgment: March 5, 2019

Citation: 2019 INSC 207

Judges: A.K. Sikri, S. Abdul Nazeer, and M.R. Shah, JJ.

Can a development authority proceed with construction on land that was initially notified for acquisition but the acquisition process was later deemed illegal? The Supreme Court of India recently addressed this question, involving the New Okhla Industrial Development Authority (NOIDA) and landowners whose land was subject to a flawed acquisition process. The Court examined the legality of the acquisition and the subsequent actions of the development authority. The judgment, delivered by a three-judge bench comprising Justices A.K. Sikri, S. Abdul Nazeer, and M.R. Shah, delves into the rights of landowners when the state fails to follow due process in land acquisition.

Case Background

The case revolves around land in Village Bhagel Begumpur, District Ghaziabad (now Gautam Budh Nagar), which the New Okhla Industrial Development Authority (NOIDA) sought to acquire. The State Government issued a preliminary notification on November 30, 1989, under Section 4(1) of the Land Acquisition Act, 1894, proposing to acquire 91-11-0 bighas (57.218 acres) of land. This was followed by a final notification on June 16, 1990, under Section 6(1) of the Land Acquisition Act, 1894. The government also invoked Sections 17(1) and (4) of the Land Acquisition Act, 1894, dispensing with the inquiry under Section 5A of the Land Acquisition Act, 1894, which allows landowners to raise objections.

The private respondents, the landowners, were served with a notice under Section 9 of the Land Acquisition Act, 1894, on August 18, 1990. They challenged the acquisition in the High Court of Judicature at Allahabad, which issued an interim order on October 10, 1990, directing the authorities not to dispossess the landowners if they had not already been dispossessed and also directed the landowners not to change the nature of the land. The award under Section 11 of the Land Acquisition Act, 1894, was made on July 31, 1992, excluding the disputed land. Possession of plot Nos. 136M and 137M was taken by the Collector and transferred to the appellant on September 10, 1999. The initial writ petition was dismissed for want of prosecution on December 5, 1997, but was later restored on May 1, 2007. The landowners contended that despite the interim order, NOIDA began construction of a City Bus Terminal on the disputed land in January 2015.

Timeline

Course of Proceedings

The private respondents initially filed a writ petition challenging the land acquisition. The High Court of Judicature at Allahabad initially passed an interim order on October 10, 1990, directing that the landowners should not be dispossessed. The first writ petition was dismissed for want of prosecution on December 5, 1997, but was restored on May 1, 2007. The matter was then referred to a larger bench. Another set of writ petitions came before the Full Bench on May 14, 2012, where the Court directed the Collector to measure the plots. The matter was then referred to a Division Bench on May 9, 2013. The High Court noted that similar notifications were quashed by the Supreme Court in the case of Daya Ram Tyagi (D) through LRS. and others v. State of UP and others. Therefore, the High Court quashed the notifications related to the private respondents’ lands and directed compensation at twice the market value.

Legal Framework

The case primarily involves the interpretation and application of the following provisions of the Land Acquisition Act, 1894:

• Section 4(1): This section deals with the publication of a preliminary notification for the proposed acquisition of land. The notification is the first step in the land acquisition process, informing landowners that their land may be acquired for a public purpose.
• Section 5A: This section provides the landowners with the right to file objections to the proposed acquisition. The inquiry under this section allows landowners to present their case against the acquisition, which the government must consider before proceeding further.
• Section 6(1): This section deals with the declaration of the government’s intention to acquire the land after considering the objections under Section 5A. The declaration is the final step in the acquisition process, committing the government to acquire the land.
• Section 9: This section deals with the notice to persons interested in the land. The notice informs the landowners about the government’s intention to take possession of the land and invites them to claim compensation for their land.
• Section 11: This section deals with the determination of compensation. The Collector makes an award determining the compensation to be paid to the landowners.
• Section 17(1) and (4): These sections provide for the government to take possession of the land in cases of urgency, dispensing with the inquiry under Section 5A. This power is to be exercised in cases of genuine urgency, and the Supreme Court has held that it should not be used routinely.

Arguments

Appellant’s Arguments (New Okhla Industrial Development Authority):

• The appellant contended that the writ petitioners had no right to challenge the notification issued under Section 4(1) read with Section 17 of the Land Acquisition Act, 1894.
• The land was acquired for public purposes, including residential complexes for industrial laborers, roads, a bus depot, and a green belt.
• The appellant stated that the land was lying vacant and denied that there was no scheme or plan.
• The appellant argued that the writ petitioners had failed to establish their right and title to the acquired land, and therefore, they were not entitled to compensation.
• The appellant also argued that the High Court was not justified in directing compensation at twice the market value.

Respondent’s Arguments (Landowners):

• The respondents argued that the construction of the City Bus Terminal on the disputed land was unauthorized and illegal, as it was done without the leave of the Court and despite the interim order passed by the High Court.
• The respondents contended that the possession of the disputed land should be restored to them.
• The respondents produced documentary evidence to support their claim that they were the owners of the land.
• The respondents contended that the acquisition notifications were illegal, as the inquiry under Section 5A of the Land Acquisition Act, 1894, was dispensed with without proper justification.

The innovativeness of the argument by the respondents was that despite the dismissal of the writ petition, the interim order of the High Court was still in force and the construction was done in violation of the court order.

Submissions of Parties

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issues addressed by the Court were:

1. Whether the High Court was correct in quashing the acquisition notifications in light of the Supreme Court’s judgment in Daya Ram Tyagi (D) through LRS. and others v. State of UP and others.
2. Whether the High Court was justified in directing the determination of compensation at twice the market value.
3. Whether the writ petitioners had established their right and title to the land acquired.

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 in its judgment:

Judgment

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

How each authority was viewed by the Court?

• The Supreme Court followed the ratio of Daya Ram Tyagi (D) through LRS. and others v. State of UP and others [CITATION], where similar acquisition notifications were quashed. The Court held that the High Court was bound by this judgment and could not take a different view.

What weighed in the mind of the Court?

The Supreme Court was influenced by several factors in reaching its decision. The Court emphasized the illegal construction by the appellant despite the High Court’s interim order and the Supreme Court’s previous judgment in Daya Ram Tyagi (D) through LRS. and others v. State of UP and others, which had quashed similar notifications. The Court also considered the fact that the appellant had not produced any evidence to refute the landowners’ claims of title, whereas the landowners had produced their title deeds. The Court also took into account the fact that the land had been notified for acquisition almost 28 years prior, and the construction had put the public exchequer at risk. The Court also noted that the High Court had passed the order directing determination of compensation on the peculiar facts and circumstances of the case.

Fact:Law Ratio

The Court’s reasoning was a blend of factual analysis and legal interpretation. The factual aspects, such as the illegal construction and the appellant’s failure to produce evidence, played a significant role. The legal aspects included the binding nature of the Supreme Court’s judgment in Daya Ram Tyagi (D) through LRS. and others v. State of UP and others and the interpretation of the Land Acquisition Act, 1894.

Logical Reasoning

The Court considered the argument that the landowners had not established their title but rejected it, noting that the appellant had not produced any evidence to refute the landowners’ claims. The Court also considered the argument that the High Court was not justified in directing compensation at twice the market value but rejected it, holding that the appellant’s conduct warranted such a direction. The final decision was reached after considering all the facts and circumstances of the case and applying the relevant legal principles.

The Court’s decision was based on the following reasons:

• The acquisition notifications were quashed due to the illegal dispensation of inquiry under Section 5A of the Land Acquisition Act, 1894, as held in Daya Ram Tyagi (D) through LRS. and others v. State of UP and others.
• The appellant had constructed on the land without legally acquiring it, despite knowing that the acquisition notifications were set aside in the Daya Ram Tyagi (D) through LRS. and others v. State of UP and others case.
• The appellant had not produced any evidence to refute the landowners’ claims of title, whereas the landowners had produced their title deeds.

The Court did not have any dissenting opinions. The judgment was unanimous.

The decision has implications for future cases involving land acquisition, particularly where the government fails to follow due process. It underscores the importance of adhering to legal procedures in land acquisition and the consequences of acting in violation of court orders. The decision also reinforces the principle that landowners are entitled to fair compensation when their land is acquired by the state.

Key Takeaways

• Land acquisition must follow due process as outlined in the Land Acquisition Act, 1894.
• The government cannot dispense with the inquiry under Section 5A of the Land Acquisition Act, 1894, without proper justification.
• Construction on land without proper acquisition is illegal and can lead to compensation being awarded to the landowners.
• Landowners are entitled to fair compensation for their land, especially when the acquisition process is flawed.
• Interim orders of the court must be respected and cannot be violated.

This judgment may lead to more scrutiny of land acquisition processes and greater protection of landowners’ rights. It also serves as a reminder to development authorities to adhere to legal procedures and not proceed with construction without proper acquisition.

Directions

The High Court directed the following:

• Acquisition notifications dated November 30, 1989, and June 16, 1990, were quashed in so far as they related to the petitioners’ land.
• The respondents were directed to determine compensation for the disputed land at twice the market value, in accordance with the provisions of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
• The compensation was to be paid to the petitioners within three months from the date of the judgment, failing which the respondents were to restore possession of the disputed land to the petitioners by removing any constructions.
• The petitioners were also entitled to costs of Rs. 5,00,000 in each set of writ petitions.

Development of Law

The ratio decidendi of this case is that the State must adhere to the procedures established under the Land Acquisition Act, 1894, and that any deviation from these procedures, especially the dispensation of inquiry under Section 5A, makes the acquisition illegal. This decision also clarifies that authorities cannot construct on land without proper acquisition, especially when the acquisition process has been deemed illegal. This case reinforces the principle that landowners are entitled to compensation for the illegal acquisition of their land.

Conclusion

The Supreme Court dismissed the appeals filed by the New Okhla Industrial Development Authority (NOIDA), upholding the High Court’s decision to quash the acquisition notifications and direct compensation at twice the market value for the landowners. The Court emphasized the illegal construction by the appellant and the failure to follow due process in the land acquisition. This judgment reinforces the importance of adhering to legal procedures in land acquisition and the rights of landowners to fair compensation.