Supreme Court Upholds Land Acquisition for Scheme No. 97: Indore Development Authority vs. Burhani Grih Nirman (2023)

Introduction

Date of the Judgment: March 03, 2023

Citation: 2023 INSC 177

Judges: M.R. Shah, J. and B.V. Nagarathna, J.

Can a development authority’s scheme be considered lapsed if it doesn’t fully implement the scheme within a stipulated time, even if it has taken substantial steps? The Supreme Court of India recently addressed this question in a case involving the Indore Development Authority (IDA) and several landowners. The core issue revolved around the validity of land acquisition for Scheme No. 97, specifically whether the scheme had lapsed under the Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973, and whether the land acquisition process was legally sound. The judgment was delivered by a bench comprising Justice M.R. Shah and Justice B.V. Nagarathna.

Case Background

The Indore Development Authority (IDA) initiated Scheme No. 97, a residential scheme with connected land uses, on March 13, 1981, by passing a resolution under Section 50(1) of the Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973 (the Adhiniyam). The scheme was divided into four parts. A public notice of the scheme was published on July 10, 1981. The State Government authorized Collectors and Divisional Commissioners to act as ex-officio Deputy Secretaries and Secretaries for cases under Sections 4, 5, 6 & 17 of the Land Acquisition Act, 1894 (the Act, 1894) on December 24, 1983. Scheme No. 97 was published on June 8, 1984, as per Section 50(7) of the Adhiniyam.

The State Government, under Article 166(2) & (3) of the Constitution of India, delegated power to the District Collector to act as Under Secretary, Revenue Department. On March 6, 1987, Deputy Collectors were empowered to exercise the functions of Collectors for land acquisition. The IDA began negotiations with landowners for land procurement under Section 56 of the Adhiniyam. When negotiations failed, the IDA requested the Collector to acquire the land on June 4, 1987.

A notification under Section 4 of the Act, 1894 was published in the Official Gazette and in two daily Hindi newspapers on August 14, 1987. The Deputy Collector filed a report under Section 5A of the Act, 1894 and submitted the notification under Section 6 for the Collector’s approval. The Collector approved the same. A declaration under Section 6 of the Act, 1894 was published on October 7, 1988. The Collector submitted a report to the Commissioner to reject objections under Section 5A, which was approved on December 6, 1988.

Some landowners filed writ petitions against the acquisition. The Collector made an award on March 6, 1991. The original writ petitioners challenged the notifications under Sections 4 & 6 of the Act, 1894 and Scheme No. 97. In 1997, some lands were released from Scheme No. 97. The IDA clarified the land release, justifying the same. The challenge to Scheme No. 97 was on the grounds that the scheme was not implemented within three years and that the notification under Section 6 was not in accordance with law.

Timeline:

Course of Proceedings

The learned Single Judge of the High Court allowed the writ petitions on December 10, 1998, quashing Scheme No. 97 and the land acquisition proceedings. The Single Judge held that:

• The objections under Section 5A of the Land Acquisition Act, 1894, were not decided by the competent authority (i.e., the State Government).
• There was hostile discrimination against the respondents as other lands were released from the scheme.
• The scheme had lapsed under Section 54 of the Adhiniyam as it was not implemented within three years.

The IDA appealed to the Division Bench of the High Court, which dismissed the appeals on August 28, 2014, upholding the Single Judge’s decision. This led to the present appeals before the Supreme Court.

Legal Framework

The case primarily involves the interpretation of the following legal provisions:

• Section 50 of the Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973 (the Adhiniyam): This section outlines the procedure for preparing town development schemes. It includes the declaration of intention to prepare a scheme, publication of the scheme, inviting objections, and final approval of the scheme.

“50. Preparation of Town Development Schemes. – (1) The Town and Country Development Authority may, at any time, declare its intention to prepare a town development scheme.”

• Section 54 of the Adhiniyam: This section deals with the lapse of a scheme if the Town and Country Development Authority fails to commence implementation within a specified period.

“54. Lapse of scheme – If the Town and Country Development Authority fails to commence implementation of the town development scheme within a period of two years or complete its implementation within a period of five years from the date of notification of the final scheme under Section 50, it shall, on expiration of the said period of two years or five years, as the case may be, lapse”

• Section 56 of the Adhiniyam: This section allows the Authority to acquire land for the scheme by agreement within three years of the final scheme publication. If that fails, the State Government may acquire the land under the Land Acquisition Act, 1894.

“56. Acquisition of land for Town and Country Development Authority. – The Town and Country Development Authority may at any time after the date of publication of the final town development scheme under Section 50 but not later than three years therefrom, proceed to acquire by agreement the land required for the implementation of the scheme and, on its failure so to acquire, the State Government may, at the request of the Town and Country Development Authority, proceed to acquire such land under the provisions of the Land Acquisition Act, 1894 (No. 1 of 1894) and on the payment of compensation awarded under that Act and any other charges incurred by the State Government in connection with the acquisition, the land shall vest in the Town and Country Development Authority subject to such terms and conditions as may be prescribed.”

• Sections 4, 5A, and 6 of the Land Acquisition Act, 1894 (the Act, 1894): These sections pertain to the land acquisition process, including the notification of intention to acquire land, hearing of objections, and declaration of acquisition.
• Rule 19 of the M.P. Nagar Tatha Gram Nivesh Niyam, 1975: This rule specifies the procedure for land acquisition under Section 56 of the Adhiniyam.

Arguments

Arguments by the Indore Development Authority (IDA):

• The IDA argued that the High Court erred in quashing the acquisition proceedings and Scheme No. 97.
• The IDA contended that the Collector was delegated the power to decide objections under Section 5A of the Act, 1894. The State Government’s letter dated March 22, 1985, delegated powers to the District Collector to act as Deputy Secretary of the Revenue Department, and to the Commissioner to act as Secretary of the Revenue Department, to adjudicate matters related to land acquisition under Sections 4, 5, 6, and 17 of the Act, 1894.
• The IDA submitted that Section 5A of the Act, 1894, does not require any further delegation of power and the decision on the report is taken under Section 6 of the Act, 1894.
• The IDA argued that it took substantial steps to implement the scheme within three years of its final publication on June 8, 1984. These steps included mutual negotiations with landowners, preparing the final sanction scheme, and requesting the State Government to acquire the land on June 4, 1987.
• The IDA contended that the term “commence implementation” in Section 54 of the Adhiniyam does not mean complete implementation but rather taking substantial steps towards implementation.
• The IDA also argued that the release of some lands from the scheme was justified and did not violate Article 14 of the Constitution of India. The released lands were either for housing societies with similar objectives or for agricultural or regional park purposes.

Arguments by the Landowners:

• The landowners argued that the scheme had lapsed under Section 54 of the Adhiniyam because the IDA failed to implement it within three years of its final publication.
• They contended that the term “implement” in Section 54 should be narrowly interpreted to mean full or substantial implementation.
• The landowners submitted that the request for land acquisition four days before the deadline did not amount to substantial implementation.
• They argued that the Collector was not the competent authority to decide objections under Section 5A of the Act, 1894, as there was no specific delegation of power for this purpose.
• The landowners also argued that the release of a substantial portion of the land from the scheme was discriminatory and violated Article 14 of the Constitution of India.
• They contended that the statutory fiction under section 55 of the Adhiniyam also comes to an end if the scheme lapses under section 54.

Submissions of the Parties

Issues Framed by the Supreme Court

The Supreme Court considered the following issues:

1. Whether Scheme No. 97 had lapsed under Section 54 of the Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973.
2. Whether the land acquisition process was valid, particularly concerning the delegation of power under Section 5A of the Land Acquisition Act, 1894.
3. Whether the release of some lands from the scheme amounted to hostile discrimination.

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:

On the Interpretation of “Commence Implementation” under Section 54 of the Adhiniyam:

• Sanjai Gandhi Grah Nirman Sahkari Sanstha Maryadit v. State of M.P. & Others, AIR 1991 MP 72 – Madhya Pradesh High Court: The court held that “implementation” does not mean completion, and substantial steps are sufficient.
• Laxmichand v. The Indore Development Authority, Indore – Madhya Pradesh High Court: The Court held that Section 54 does not apply when substantial steps have been taken within three years.

On Delegation of Power under Section 5A of the Land Acquisition Act, 1894:

• Adarsh Nagar Grih Nirman Sahkari Sansthan Maryadit, Bhopal v. State of M.P. and Others, 2004 (1) M.P.L.J. 539 – Madhya Pradesh High Court: The court held that the Collector could exercise the power of the appropriate government.
• Gajanan v. State of M.P., AIR 2000 MP 2 – Madhya Pradesh High Court: The Court held that the power to deal with land acquisition subject flowed down to Secretary/Deputy Secretary of the Revenue Department.

On Release of Land and Hostile Discrimination:

• Rajasthan State Industrial Development and Investment Corporation v. Subhash Sindhi Cooperative Housing Society, Jaipur, (2013) 5 SCC 427 – Supreme Court of India: The Court discussed the principles for releasing land from acquisition.
• Union of India v. Bal Ram Singh, 1992 Supp (2) SCC 136 – Supreme Court of India: The Court discussed the principles for releasing land from acquisition.
• Sube Singh v. State of Haryana, (2001) 7 SCC 545 – Supreme Court of India: The Court discussed the principles for releasing land from acquisition.
• Jagdish Chand v. State of Haryana, (2005) 10 SCC 162 – Supreme Court of India: The Court discussed the principles for releasing land from acquisition.
• Dharam Pal v. State of Haryana, (2009) 2 SCC 397 – Supreme Court of India: The Court discussed the principles for releasing land from acquisition.

Legal Provisions Considered:

• Section 50 of the Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973: Pertaining to the preparation of town development schemes.
• Section 54 of the Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973: Pertaining to the lapse of a scheme.
• Section 56 of the Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973: Pertaining to the acquisition of land for the scheme.
• Sections 4, 5A, and 6 of the Land Acquisition Act, 1894: Pertaining to the land acquisition process.
• Rule 19 of the M.P. Nagar Tatha Gram Nivesh Niyam, 1975: Pertaining to the procedure for land acquisition.
• Article 14 of the Constitution of India: Pertaining to equality before law.
• Article 166(2) & (3) of the Constitution of India: Pertaining to the conduct of business of the Government of a State.

Judgment

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

How each authority was viewed by the Court?

• Sanjai Gandhi Grah Nirman Sahkari Sanstha Maryadit v. State of M.P. & Others, AIR 1991 MP 72*: The Court agreed with the view of the Madhya Pradesh High Court that “implementation” does not mean completion, and substantial steps are sufficient.
• Adarsh Nagar Grih Nirman Sahkari Sansthan Maryadit, Bhopal v. State of M.P. and Others, 2004 (1) M.P.L.J. 539*: The Court agreed with the view of the Madhya Pradesh High Court that the Collector could exercise the power of the appropriate government.
• Rajasthan State Industrial Development and Investment Corporation v. Subhash Sindhi Cooperative Housing Society, Jaipur, (2013) 5 SCC 427*: The Court relied on the principles for releasing land from acquisition.
• Union of India v. Bal Ram Singh, 1992 Supp (2) SCC 136*: The Court relied on the principles for releasing land from acquisition.
• Sube Singh v. State of Haryana, (2001) 7 SCC 545*: The Court relied on the principles for releasing land from acquisition.
• Jagdish Chand v. State of Haryana, (2005) 10 SCC 162*: The Court relied on the principles for releasing land from acquisition.
• Dharam Pal v. State of Haryana, (2009) 2 SCC 397*: The Court relied on the principles for releasing land from acquisition.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the interpretation of the term “commence implementation” in Section 54 of the Adhiniyam. The Court emphasized that the term does not mean complete implementation of the scheme but rather taking substantial steps towards it. The Court also considered the fact that the IDA had initiated negotiations with landowners, prepared the final scheme, and requested the State Government to acquire the land within the stipulated time. The Court also found that the Collector was indeed delegated the power to decide objections under Section 5A of the Land Acquisition Act, 1894. The Court further held that the release of some lands was justified and did not affect the integrity of the scheme. The Court also relied on the previous decisions of the Madhya Pradesh High Court and the Supreme Court of India.

Sentiment Analysis of Reasons Given by the Supreme Court:

Fact:Law Ratio:

Logical Reasoning:

The Court rejected the narrow interpretation of “implementation” as complete implementation, and held that the term “commence implementation” under Section 54 of the Adhiniyam means taking substantial steps towards implementation. The Court also rejected the argument that the Collector was not the competent authority to decide objections under Section 5A, and that the release of land was discriminatory. The Court relied on the previous rulings of the Madhya Pradesh High Court and the Supreme Court of India to come to its decision.

The Court observed that the High Court had adopted a too narrow meaning while interpreting and/or considering Section 54 of the Adhiniyam. The Court stated that the words used in Section 54 are “fails to commence implementation,” which does not mean that there must be implementation of the scheme within the time stipulated. The Court further observed that there is a clear distinction between the words “implementation” of the scheme and “to commence implementation.”

The Court also observed that the High Court had erred in quashing the entire acquisition proceedings on the ground that there was no proper delegation of power to the Collector with regard to Section 5A of the Act, 1894. The Court stated that the State Government had delegated its power to the District Collector as Deputy Secretary of the Revenue Department and to the Commissioner of the division to act as Secretary of the Revenue Department and to adjudicate matters related to land acquisition by exercising powers given under Sections 4, 5, 6, and 17 of the Act, 1894. The Court held that merely because Section 5A was not mentioned in the said order, the entire acquisition proceedings could not be declared illegal.

The Court further observed that the High Court had erred in quashing the acquisition proceedings on the ground that there was hostile discrimination. The Court stated that the release of some land was justified and did not violate Article 14 of the Constitution of India. The Court held that the released lands were either for housing societies with similar objectives or for agricultural or regional park purposes.

Final Decision

The Supreme Court allowed the appeals, setting aside the judgment of the High Court. The Court held that:

• Scheme No. 97 had not lapsed under Section 54 of the Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973.
• The land acquisition process was valid, and the Collector was competent to decide objections under Section 5A of the Land Acquisition Act, 1894.
• The release of some lands from the scheme did not amount to hostile discrimination.

The Supreme Court’s decision clarifies the interpretation of “commence implementation” under Section 54 of the Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973, emphasizing that it does not mean complete implementation but rather taking substantial steps towards it. This judgment also upholds the delegation of power to the Collector for land acquisition matters and provides guidelines for releasing land from development schemes without violating Article 14 of the Constitution of India.

Conclusion

The Supreme Court’s judgment in Indore Development Authority vs. Burhani Grih Nirman Sahakari Sanstha Maryadit Sneh Nagar and Others (2023) is a significant ruling on land acquisition and town planning laws in India. The Court’s interpretation of “commence implementation” provides clarity on the responsibilities of development authorities in implementing town planning schemes. The ruling also reinforces the validity of delegation of powers to district-level officers in land acquisition matters. This judgment ensures that schemes are not automatically deemed lapsed due to delays, provided substantial steps have been taken towards their implementation. It also provides guidelines for releasing land from development schemes without violating the principles of equality and fairness.

Key Takeaways:

• “Commence implementation” under Section 54 of the Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973, does not mean complete implementation.
• Substantial steps towards implementation within the stipulated time are sufficient to avoid the lapse of a scheme.
• Collectors can be delegated the power to decide objections under Section 5A of the Land Acquisition Act, 1894.
• Release of land from a scheme is permissible if justified and does not violate Article 14 of the Constitution of India.