Case: Laxami Devi Vs. State Of Bihar

1. The legal nodus that we are called upon to unravel in this Appeal is whether the Land Acquisition Act, 1894 (L.A. Act for brevity) as amended from time to time, requires an Award to be passed even in respect of lands expropriated by the State pursuant to the exercise of special powers in cases of urgency contained in Section 17 thereof. It is indeed ironical that what was, as far back as in 1987, perceived as an imperative, urgent and exigent necessity, justifying the steamrolling of the rights of citizens, has proved substantially to be a fallow and ill-conceived requirement even after the passage of three decades; till date, tracts of the acquired land remain unutilized; the initially declared purpose of construction of residential quarters for State officials having novated to portions of the land being used as helipads for ‘StateWe must not forget that even though ownership of property has ceased to be conceived of as a Fundamental Right, it continues to receive Constitutional protection. It is also the regrettable reality that Governments are increasingly relying on rulings of this Court to the effect that even if the public purpose providing the predication for the compulsory acquisition of aland has proved to be an illusion or misconception, another purpose can conveniently be discovered or devised by the State for retention by it of the expropriated land. Our opinion intends to insulate genuinely urgent projects from lapsing and not to annihilate the constitutional rights of the individual from the might of the State even though it transgresses the essence of the statute. It has become alarmingly commonplace for lands to be expropriated under the banner of urgency or even under the normal procedure, only to be followed by a withdrawal or retraction from this exercise enabling a favoured few to harvest the ill-begotten windfall. The ambivalence or cleavage of opinion of this Court in Delhi Airtech Services (P) Ltd. vs. State of U.P. (2011) 9 SCC 354  on the necessity to pay the erstwhile owners of land of even its unilaterally assessed value has emboldened and spurred the State into contending before us that no sooner the urgency mantra is mouthed, no other provision of the L.A. Act has any relevance or efficacy, including the legal necessity of passing an Award.2. We shall succinctly narrate the salient facts of the Appeal before us. The State Government had by means of Notification No.2/86-87 dated 18.11.1987 and 3/86-87 dated 18.11.1987 initiated steps for acquiring tracts of lands in Mouza Sansarpur and in Hardas Chak. These Notifications had simultaneously excluded the provisions of Section 5A of the L.A. Act from applying to the acquired lands, which, because of the significance of its language, is reproducedThis first Notification under Section 4 came to be followed by subsequent Notifications, lucidly illustrating the understanding of the Respondent State that the preceding Notification had lapsed by operation of the statute. The Respondent State issued a Notification under Section 4 of the L.A. Act on 16.9.1999 in respect of which the Appellants filed Objections under Section 5A on a consideration of which the Land Acquisition Officer had opined that the Notification issued in 1987 could not be continued with as the Award had not been passed within the stipulated time period thereby making it necessary to issue the 1999 Notification. This Notification also expired because a Declaration under Section 6 had not been promulgated within one year. Hence yet another Notification was published on 13.8.2001, for which the Appellants filed their Objections under Section 5A yet again. This Notification also lapsed, since the sequence of events as contemplated in the L.A. Act had not been duly completed. Once again, in 2004, fresh steps were initiated for acquisition which also expired for the same reason. The Respondent State now vainly essays to take unfair and ill-founded advantage of decisions and opinions of this Court to contend that the subject acquisition stands completed in all respects, thereby endeavouring, illegally in our considered opinion, to avoid performance of their statutory obligations of computing compensation and then paying it.4. The Impugned Order accepts the version of the Respondent that large parcels of these lands have been utilized for constructing residential quarters for senior Officers of the State, and that the Appellant has been paid eighty per cent of the compensation, although twenty per cent supposedly still remains outstanding. Per contra, it is the contention of the Appellant that the incontrovertible position that portions of the land have remained unutilized for decades is clearly indicative of the fact that they are not required by the State any more. Within a week of the publication of the Section 4 Notification, that is on 24.11.1987, notices under Section 17(1) of the L.A. Act were also issued, which resulted in the filing of writ petitions in the following year, in which it was contended that resort to Section 17 of the L.A. Act was mala fide, and that compensation, as envisaged in the statute itself, had not even been tendered to the owners. It is significant that in CWJC No.4007 of 1988, a Division Bench of the High Court of Judicature at Patna had directed on 12.7.1988 that the Award for compensation must be made within four months. It is not in dispute that an Award has, till date, not been passed even though that direction has attained finality. The Writ Petition was disposed of observing - (i) possession of the land had already been taken by the State; (ii) eighty per cent compensation had been paid to the Appellants; (iii) the remainder twenty per cent along with interest would be paid to the owners on their appearance before the Land Acquisition Officer; (iv) they would be entitled to raise the claim of higher interest considering that the land had been acquired in 1987; and (v) Appellant was entitled to raise objections with respect to the value of the land. In view of these directions, it was palpably clear to all the parties, especially the State Government, that the entitlement to raise objections with respect to the value of the land was possible only once proceedings connected with and preparatory to passing an Award on Section 11 reached its culmination. It seems facially obvious to us that since the State has not assailed these directions it ought not to be permitted to canvas in this Appeal that the passing of an award is unnecessary in cases where the State has taken recourse to the urgency provisions contained in Section 17 of the Act. A perusal of the Counter Affidavit filed on behalf of the State of Bihar makes it patently evident that an award as contemplated in Section 11 of the L.A. Act has not been passed; and that Notifications under Section 4 have again been passed subsequent to the two Notifications detailed above.5. An overview of the L.A. Act discloses that it is divided into VIII Parts/Chapters. Part II commences with Section 4, which postulates the publication of a preliminary notification, whereupon Officers of the State are authorized to enter and survey the lands proposed to be acquired and carry out activities ancillary to that purpose; and Section 5 obligates the Officials to compensate for damages caused as a consequence thereof. The right to file Objections to the Section 4 Notification, recognized by Section 5A, was introduced into the L.A. Act by Act 38 of 1923, and this provision was again amended by Act 68 of 1984 to mandate that Objection must be filed within thirty days of the issuance of the Notification. Section 5A further obligates the Collector to submit a Report to the Government in respect of the Objections preferred by persons interested in the land, as well as pertaining to any aspect of the nature of the land proposed to be acquired.6. The insertion of Section 5A seems to have been spurred on by the decision of the Division Bench of the Calcutta High Court in J.E.D. Ezra vs. The Secretary of State for India (1902-1903) 7 CWN 249. In that case, the properties of Ezra were sought to be acquired under the pre-amended provision for expansion of the offices of the Bank of Bengal. In the challenge to the said acquisition, it was argued that the person whose property was going to be taken away should be allowed a hearing on the principles of natural justice. However the Court held that it could not grant relief in the absence of any provision in the Act enabling or envisaging or mandating that such an opportunity should be made available to the landowners. In order to remedy this shortcoming in Act of 1894, an amendment by way of incorporation of Section 5A was introduced on 11th July, 1923. The Statement of Objects and Reasons for the said Amendment is asLand Acquisition Act 1 of 1894 does not provide that person having an interest in land which it is proposed to acquire, shall have the right of objecting to such acquisition; nor is Government bound to enquire into and consider any objections that may reach them. The object of this Bill is to provide that a Local Government shall not declare, under section 6 of the Act, that any land is needed for a public purpose unless time has been allowed after the notification under section 4 for persons interested in the land to put in objections and for such objections to be considered by the Local(Gazette of India, Pt. V, dated 14th July, 1923, pageimportance of Section 5A cannot be overemphasised. It is conceived from natural justice and has matured into manhood in the maxim of audi alteram partem, i.e. every person likely to be adversely affected by a decision must be granted a meaningful opportunity of being heard. This right cannot be taken away by a side wind, as so powerfully and pellucidly stated in Nandeshwar Prasad vs. State of U.P., AIR 1964 SC 1217 . So stringent is this right that it mandates that the person who heard and considered the Objections can alone decide them; and not even his successor is competent to do so even on the basis of the materials collected by his predecessor. Furthermore, the decision on the Objections should be available in a self contained, speaking and reasoned order; reasons cannot be added to it later as that would be akin to putting old wine in new bottles. We can do no better than commend a careful perusal of Union of India vs. Shiv Raj (2014) 6 SCC 564 , on these as well as cognate considerations.

Court's reasoning:
8. Section 11A has been introduced by Act 68 of 1984 prescribing a limitation of two years for the making of an Award by the Collector. It is only post this event that Section 16 empowers the Collector to take possession of the land which thereupon vests absolutely in the Government, free from all encumbrances. We may clarify that the wordhas two connotations – the first and primary one relates to possession of land; and the second, an adjunctory one, pertains additionally to the title of that land. But this distinction has not been drawn in India since this Court has held in several cases thatin the circumstances with which we are presently concerned, covers and encompasses the possession as well as the title of the land.The salient concomitants of Section 17(1) deserve enumeration. Firstly, the Section is attracted even though an Award has not been made which, it appears to us, clearly indicates that the completion of this exercise has not been obliterated or dispensed with but has been merely deferred. An unambiguous and unequivocal statement could have been made excluding the requirement of publishing an Award. Secondly, it is available only on the expiration of fifteen days from the issuance of the Section 9 notice. This hiatus of fifteen days must be honoured as its purpose appears to be to enable the affected or aggrieved parties to seek appropriate remedy before they are divested of the possession and the title over their land. The Government shall perforce have to invite and then consider Objections preferred under Section 5A, which procedure as painstakingly and steadfastly observed by this Court constitutes the Constitutional right to property of every citizen; inasmuch as Section 17(4) enables the obliteration of this valuable right, this Court has repeatedly restated that valid and pressing reasons must be present to justify the invocation of these provisions by the Government. Thirdly, possession of the land can be taken only if it is needed for public purpose, which term stands defined in the preceding Section 3(f).A conjoint reading of Sections 17 and 3(f) makes it apparent to us that urgency provisions cannot be pressed into service or resorted to if the acquisition of land is for Companies; however we must be quick to add that this question does not arise before us. Fourthly, possession of such lands would vest in the Government only when the foregoing factors have been formally and strictly complied with. This Section enables the curtailment of aConstitutional right to property and can be resorted to only if the provisions and preconditions are punctiliously and meticulously adhered to, lest the vesting be struck down and set aside by the Court in its writ jurisdiction, on the application of the Taylor vs. Taylor (1875) 1 Ch D 426 and several judgments of this Court which has followed this decisionion (4) sounds the death knell to the arguments put forward for the Respondent State, inasmuch as it allows the option to the appropriate Government to make the provisions of Section 5A inapplicable. Paraphrased differently, even where the urgency provisions contained in Section 17 are resorted to, ordinarily the provisions of Section 5A have to be adhered to, i.e. inviting and then deciding the Objections filed by the landowners. Significantly,(4) of Section 17 does not, as it very easily could have, exempt compliance with the publication of the Declaration under Section 6 and the hearing of parties preparatory to the passing of an Award under Sections 9 to 11 of the Act. There is, therefore, not even an iota of doubt that remains pertaining to the absolute necessity of the passing of an Award under Section 11 of the L.A. Act. We are in no manner of doubt, and we reiterate, that the tender of the estimated compensation is the precondition, the sine qua non, enabling the Government to take possession of land under the foregoing subsections; and must be followed by the exercise of computation of compensation in a procedure corresponding to that in Section 11. We shall revert to the question of whether the constraints contained in Section 11A will also apply to acquisitions in which Section 17 has been resorted to.The plea before us from the Appellants is that the land should revert to them under Section 11A, since an Award under Section 11 has still not been made despite the passage of almost three decades from the date of the subject Notification. This Court has continuously held that once land has vested in the State, the question ofits possession in the erstwhile landowners is no longer available as an option to the State. This legal position was enunciated close to a half century ago in Avinash Sharma and has been subsequently reiterated in numerous judgments.The scenario before us depicts the carelessness and the callousness of the State, quite different from the situation in Satendra Prasad Jain and Avinash Sharma. The Appellants herein are being denied just and fair compensation for their land in proceedings which commenced in 1987, despite the directions of the High Court passed as early as in 1988 to pass an award within four months. The raisonbehind the introduction of Section 11A was for the landowners to have a remedy in the event of an award not being passed expeditiously. If Satendra Prasad Jain is interpreted to mean that Section 11A will not apply to any acquisition under the urgency provisions, landowners such as the Appellants before us will have no protection, even if they are not paid full compensation for their land for decades. This cannot be in keeping with the legislative intent behind this Section. Furthermore, keeping empirical evidence in sight, we make bold to opine that circumstances require this Court to reconsider its view that even if the stated public interest or cause has ceased to exist, any other cause can substitute it, especially where the urgency provisions have been invoked.25. We feel it imperative to distinguish between the setting aside of an acquisition and the reversion of possession to the erstwhile landowners. While the L.A. Act and the judgments discussed above do not allow for the latter, we are of the considered opinion that this does not necessarily imply that the former is also not an option. Both the abovementioned cases dealt with a factual situation in which the Government was attempting to set the acquisition of the land at naught so that they would not have to pay compensation to acquire it. Setting aside of the acquisition in those cases was tantamount to reverting the possession to the original owners. In this scenario, however, the two do not have to go hand in hand. In allowing the acquisition of land that the Government finds necessary to be set aside, we would not necessarily be holding that the land revert to the Appellants, as the alternative of permitting the Government to keep possession provided itthe land with a new Section 4 notification exists. This option, particularly in the present factual matrix, does the least violence to the intent and content of the L.A. Act, in that it upholds Section 11A even in cases of acquisition under Section 17 while preserving the requirement of Section 17 that the unencumbered possession of the land remain vested in the Government. It also protects the rights of the landowners, thus fulfilling the intent of Section 11A, while allowing the Government to acquire land in cases of emergencies without its title being challenged, which is the avowed intention of Section 17. Any other interpretation of the law would serve to protect only those landowners who had approached the Court to stop the Government from undoing an emergency acquisition, while leaving in the cold equally aggrieved landowners seeking to enforce their right to fair compensation for their land. Even equity demands that the party bearing the consequence of the delay in the Award ought not to be the innocent landowner, but the errant State.