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

Date of the Judgment: 03 March 2023
Citation: 2023 INSC 200
Judges: M.R. Shah, J. and B.V. Nagarathna, J.
Can a development scheme be invalidated if not fully implemented within three years? The Supreme Court of India recently addressed this question in a case concerning the Indore Development Authority’s Scheme No. 97. The court overturned the High Court’s decision, ruling that the scheme had not lapsed and the land acquisition was valid. This case clarifies the interpretation of “commence implementation” under the Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973. The judgment was delivered by a two-judge bench comprising Justice M.R. Shah and Justice B.V. Nagarathna, with Justice M.R. Shah authoring the opinion.

Case Background

The Indore Development Authority (IDA) initiated Scheme No. 97, a residential scheme, 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 intention to frame the scheme was published on July 10, 1981. The scheme was divided into four parts (I, II, III, & IV). On December 24, 1983, the State Government authorized Collectors and Divisional Commissioners to act as ex-officio Deputy Secretaries and Secretaries for land acquisition cases under Sections 4, 5, 6 & 17 of the Land Acquisition Act, 1894 (the Act, 1894). Scheme No. 97 was published on June 8, 1984, as per Section 50(7) of the Adhiniyam.

The IDA began negotiations with landowners for land procurement under Section 56 of the Adhiniyam. When negotiations failed, the IDA requested the Collector on June 4, 1987, to initiate land acquisition. A notification under Section 4 of the Act, 1894, was published on August 14, 1987, in the Official Gazette and two daily Hindi newspapers. The Deputy Collector submitted a report under Section 5A of the Act, 1894, to the Collector, who approved the notification under Section 6 of the Act, 1894. The declaration under Section 6 was published on October 7, 1988.

Some landowners filed writ petitions challenging the acquisition, obtaining interim orders against dispossession. 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, seeking their land’s release. In 1997, some lands were released from Scheme No. 97. The IDA clarified these releases, which were challenged on grounds that the scheme had lapsed under Section 54 of the Adhiniyam and that the Section 6 notification was not in accordance with the law.

Timeline:

Course of Proceedings

The original writ petitioners challenged the land acquisition and Scheme No. 97 before the High Court of Madhya Pradesh. The learned Single Judge allowed the writ petitions on December 10, 1998, quashing the scheme and acquisition proceedings. The Single Judge held that:
✓ Objections under Section 5A of the Land Acquisition Act were not decided by the Competent Authority (State Government).
✓ There was hostile discrimination as some lands were released from the scheme.
✓ The scheme lapsed under Section 54 of the Adhiniyam for not being implemented within three years.

The Indore Development Authority (IDA) appealed to the Division Bench of the High Court, which dismissed the appeals on August 28, 2014, upholding the Single Judge’s decision. The IDA then appealed to the Supreme Court of India.

Legal Framework

The case revolves around 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 process for preparing a town development scheme.
✓ Section 54 of the Adhiniyam: This section states that a scheme lapses if the Town and Country Development Authority fails to commence implementation within two years or complete it within five years from the date of notification of the final scheme. The relevant part of the provision states:
“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 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. The relevant part of the provision states:
“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)…”
✓ Sections 4, 5A, and 6 of the Land Acquisition Act, 1894 (the Act, 1894): These sections deal with the process of land acquisition, including the notification of intent to acquire, hearing of objections, and declaration of acquisition.

Arguments

Arguments by the Indore Development Authority (IDA):

• On Delegation of Power:

  • The State Government had delegated powers to the District Collector to act as Deputy Secretary of the Revenue Department vide its letter dated 22.03.1985, for matters related to land acquisition under Sections 4, 5, 6 and 17 of the Act, 1894.
  • Section 5A of the Act, 1894, does not require a separate delegation of power as it only provides for inviting and hearing objections and preparing a report. The decision on the report is taken under Section 6.
  • The Collector, being the Collector of the District, is competent to consider objections under Section 5A of the Act, 1894.

• On Lapse of Scheme:

  • The IDA took substantial steps to implement the scheme within three years, including negotiations with landowners and requesting the State Government to acquire land when negotiations failed.
  • The term “commence implementation” in Section 54 of the Adhiniyam does not mean completion of the scheme, but rather taking substantial steps towards implementation.
  • The IDA referred to the timeline of actions taken which included mutual negotiations, preparation of final scheme, request to Collector to send Patwari for preparation of proposal of land acquisition, and request to State Government to acquire the land.

• On Hostile Discrimination:

  • The release of land was based on valid reasons, such as the land being used for the same purpose as the scheme or having existing houses, religious places, or different land use.
  • The release of land did not affect the integrity of the scheme, only reduced its total area.
  • The IDA clarified that the land was released to societies that had either developed or started development of colony or had acquired the title to the land or had obtained exemption under Section 20 of the Urban Land (Ceiling & Regulation) Act, 1976 before publication of final scheme.

Arguments by the Original Writ Petitioners:

• On Lapse of Scheme:

  • The word “implement” in Section 54 of the Adhiniyam should be interpreted narrowly to mean full and complete implementation or at least “substantial implementation.”
  • The IDA’s actions, such as sending a request for land acquisition four days before the deadline, did not satisfy the “substantial implementation” test.
  • Section 54 is a time-cap for the restriction on land owners under section 53 of the Adhiniyam.
  • The Authority must reach a stage where the position becomes “irreversible” or “substantially irreversible” for the land owner.
  • Taking steps for acquisition by agreement cannot be said to amount to “taking steps” to implement the scheme.

• On Delegation of Power:

  • The power to take a decision under Section 5A of the Act, 1894, lies with the “appropriate government,” which is the State Government.
  • The State Government did not delegate its powers under Section 5A to the Collector.
  • The declarations under Section 6 were issued by the Collector as Deputy Secretary, who did not have the necessary powers.

• On Hostile Discrimination:

  • A substantial portion of the land was released, making the continuation of the scheme and acquisition of the remaining land discriminatory.
  • The schemes as originally envisaged cannot be implemented.

• On Amendment of Section 50 of the Adhiniyam:

  • The appeals filed by IDA have since been rendered infructuous in view of the amendment in Section 50 of the Adhiniyam by 2019 Amendment Act.
  • As per amended section 50(1)(b) of the Act, where a town development scheme has been notified under the repealed provisions of the Act, but development has either not started or not been taken up for any reason, the same shall lapse.

Issues Framed by the Supreme Court

The Supreme Court addressed the following issues:

1. Whether the scheme had lapsed under Section 54 of the Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973.
2. Whether there was proper delegation of power to the Collector regarding Section 5A of the Land Acquisition Act, 1894.
3. Whether the release of a substantial portion of land amounted to hostile discrimination.

Treatment of the Issue by the Court

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] – High Court of Madhya Pradesh: The court held that “implementation” does not mean completion of the scheme but taking substantial steps. The Supreme Court agreed with this view.

  Ratio: The word ‘implementation’ occurring in Section 54 of the Adhiniyam cannot be construed to mean that even after substantial steps have been taken by the authority towards the implementation of the scheme, the scheme shall lapse after the expiry of three years because of its non-completion within that period.

On Delegation of Power to the Collector:

• Adarsh Nagar Grih Nirman Sahkari Sansthan Maryadit, Bhopal v. State of M.P. and Others [2004 (1) M.P.L.J. 539] – High Court of Madhya Pradesh: The court held that the Collector can exercise the power of the appropriate government, and the Deputy Collector can submit reports to the Collector. The Supreme Court agreed with this view.

  Ratio: In the instant case Collector has exercised the power of appropriate Government and Deputy Collector has forwarded the objections and submitted the report to the Collector and Collector has exercised the power under section 6, I find no impropriety in the same.

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 of land release in the context of development schemes.

• Union of India v. Bal Ram Singh [1992 Supp (2) SCC 136] – Supreme Court of India: The Court discussed the principles of land release in the context of development schemes.

• Sube Singh v. State of Haryana [(2001) 7 SCC 545] – Supreme Court of India: The Court discussed the principles of land release in the context of development schemes.

• Jagdish Chand v. State of Haryana [(2005) 10 SCC 162] – Supreme Court of India: The Court discussed the principles of land release in the context of development schemes.

• Dharam Pal v. State of Haryana [(2009) 2 SCC 397] – Supreme Court of India: The Court discussed the principles of land release in the context of development schemes.

Judgment

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

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 High Court of Madhya Pradesh’s view on the interpretation of “implementation” was followed.
• Adarsh Nagar Grih Nirman Sahkari Sansthan Maryadit, Bhopal v. State of M.P. and Others [2004 (1) M.P.L.J. 539] – The High Court of Madhya Pradesh’s view on the delegation of power was followed.
• Rajasthan State Industrial Development and Investment Corporation v. Subhash Sindhi Cooperative Housing Society, Jaipur [(2013) 5 SCC 427] – Referred to understand the principles of land release.
• Union of India v. Bal Ram Singh [1992 Supp (2) SCC 136] – Referred to understand the principles of land release.
• Sube Singh v. State of Haryana [(2001) 7 SCC 545] – Referred to understand the principles of land release.
• Jagdish Chand v. State of Haryana [(2005) 10 SCC 162] – Referred to understand the principles of land release.
• Dharam Pal v. State of Haryana [(2009) 2 SCC 397] – Referred to understand the principles of land release.

The Court emphasized that the words “commence implementation” in Section 54 of the Adhiniyam do not mean full implementation of the scheme but rather taking substantial steps towards its implementation. The Court noted that the IDA had taken various steps within three years, including negotiations and requesting the State Government to acquire the land. The Court also held that the Collector was competent to consider objections under Section 5A of the Act, 1894, and that the release of land was based on valid reasons.

The Supreme Court quoted the following from the Madhya Pradesh High Court’s decision in Sanjai Gandhi Grah Nirman Sahkari Sanstha Maryadit v. State of M.P. & Others [AIR 1991 MP 72]:
“S. 54 does not appear to apply when substantial steps have been taken within three years to implement the scheme. The Court had also taken into consideration Ss. 56, 57 and 58 of the Adhiniyam and has taken a view that the words ‘fails to implement’ would means failure to take any substantial steps for the implementation of the scheme and if no such step is taken within three years the scheme will lapse…”

The Supreme Court also quoted the following from the Madhya Pradesh High Court’s decision in Adarsh Nagar Grih Nirman Sahkari Sansthan Maryadit, Bhopal v. State of M.P. and Others [2004 (1) M.P.L.J. 539]:
“In the instant case Collector has exercised the power of appropriate Government and Deputy Collector has forwarded the objections and submitted the report to the Collector and Collector has exercised the power under section 6, I find no impropriety in the same.”

The Court reasoned that a narrow interpretation of “implementation” would frustrate the purpose of development schemes. The court noted that the scheme was for residential, park, and industrial purposes, and a broader interpretation would better serve the public interest.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• The interpretation of “commence implementation” in Section 54 of the Adhiniyam, which the Court held to mean taking substantial steps, not full implementation.
• The need to give effect to the purpose of development schemes, which are for public benefit.
• The fact that the IDA had taken various steps within three years, including negotiations and requesting the State Government to acquire the land.
• The validity of the delegation of power to the Collector, which the Court upheld.
• The valid reasons for release of land from the scheme, which the Court found did not amount to hostile discrimination.

The Court’s emphasis on the legal interpretation of “commence implementation” and the need to uphold the purpose of development schemes indicates a strong leaning towards legal principles, with a moderate consideration of the factual aspects of the case.

Implications

This judgment has significant implications for future cases involving land acquisition and development schemes under the Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973, and similar legislation. The key implications include:

• Interpretation of “Commence Implementation”: The Supreme Court’s interpretation of “commence implementation” as taking substantial steps rather than full implementation provides clarity on the requirements for a scheme to avoid lapsing under Section 54 of the Adhiniyam. This interpretation is likely to be followed in similar cases, allowing authorities more flexibility in the initial stages of scheme implementation.
• Delegation of Power: The Court’s ruling on the delegation of power to the Collector clarifies the authority’s competence in taking decisions under Section 5A of the Land Acquisition Act, 1894. This will help streamline the land acquisition process.
• Land Release: The judgment reinforces the principle that the release of land from a scheme must be based on valid reasons and should not affect the overall integrity of the scheme. This provides guidance for authorities when considering requests for land release.
• Public Interest: The Court’s emphasis on the public interest served by development schemes indicates a judicial leaning towards upholding such schemes, provided that the authorities have taken substantial steps towards implementation.

The judgment also reinforces the importance of taking substantial steps towards implementing a scheme within the prescribed time frame. It highlights that the authorities need not complete the scheme in its entirety within the time limit for the scheme to not lapse.

Conclusion

The Supreme Court’s judgment in Indore Development Authority vs. Burhani Grih Nirman Sahakari Sanstha Maryadit (2023) provides crucial clarifications on the interpretation of “commence implementation” under the Madhya Pradesh Nagar Tatha Gram Nivesh Adhiniyam, 1973. The Court’s ruling upholds the land acquisition for Scheme No. 97, emphasizing that taking substantial steps towards implementation is sufficient to prevent a scheme from lapsing. The decision also confirms the validity of the delegation of power to the Collector and the principles governing the release of land from development schemes.

This judgment serves as a significant precedent for future cases involving land acquisition and development schemes, particularly in the context of the Adhiniyam, and provides a balanced approach between the need for timely implementation and the practical challenges faced by development authorities. It underscores the importance of legal interpretation in ensuring the effective implementation of development schemes while safeguarding the interests of landowners.