M/S DELHI AIRTECH SERVICES PVT. LTD & ANR. versus STATE OF U.P. & ANR on 14 October 2022

[2022] 19 S.C.R. 757

M/S DELHI AIRTECH SERVICES PVT. LTD & ANR.

v.

STATE OF U.P. & ANR.

(Civil Appeal No. 24 of 2009)

OCTOBER 14, 2022

[S. ABDUL NAZEER, A. S. BOPANNA AND

V. RAMASUBRAMANIAN, JJ.]

Land Acquisition Act, 1894 – ss.11A, 17(3A) – Is therequirement to tender payment of 80% of the estimated compensationas contemplated under sub-section(3A) to s.17 of, 1894 Act,mandatory to ensure absolute vesting of the notified land; Whetherthe requirement to pass the award within the time frame contemplatedu/s.11A applicable to the acquisition notified u/s.17 of 1894 Act –Held: Provision contained in s.11 of 1894 Act, shall be applicableto cases in which the acquiring authority has not complied with therequirement of sub-section (3A) to s.17 of 1894 Act by tenderingand paying eighty per centum of the estimated compensation beforetaking possession since possession in such cases cannot beconsidered to be taken in accordance with law and the vesting isnot absolute – If the requirement is complied and possession is takenafter tendering and paying eighty per centum, though there is needto pass an award and pay the balance compensation within areasonable time, the rigour of s.11A of 1894 Act will not apply soas to render the entire proceedings for acquisition to lapse in thecontext of absolute vesting – The right of land loser in such case isto enforce passing of the award and recover the compensation.

Land Acquisition Act, 1894 – s.17(1), (3A) – “shall”, “beforetaking possession”, “thereupon” – Purport of – Held: The wordemployed in sub-section (3A) of s.17 of 1894 Act is “shall” and itis to be tendered and paid “before taking possession” – Hence itcannot be understood as providing any discretion to the acquiringauthority – In fact, the last sentence of sub-section (1) of s.17 usesthe word “thereupon” with respect to vesting – This word “thereupon”is correlated to taking possession and payment in terms of sub-section (3A) is a sine qua non for taking possession – Therefore, (1)payment of 80% (2) taking over possession thereafter and (3) vestingof land in the government take place in a sequence.

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AInterpretation of Statutes – Held: If the plain meaning of theprovision does not admit of any ambiguity no other external aidwill be necessary to interpret the provision except to give it the plainmeaning.

Constitution of India – Articles 300A, 31A – Held: In view ofBArticles 300A and 31A of the Constitution, the owner of land canbe divested only in accordance with law after appropriatelycompensating if such land is required by the State for public purpose.

Disposing of the appeal, the Court

HELD: 1.1 If the plain meaning of the provision does notCadmit of any ambiguity no other external aid will be necessary tointerpret the provision except to give it the plain meaning. [Para9][767-B-C]

Conclusion

1.2 In the normal circumstance, the process for acquisitionwould commence with the notification under Section 4, after whichDthe procedure under Section 5A is complied. The declarationunder Section 6 is thereafter made, when the requirement of theland for public purpose is confirmed. Thereafter, the process fordetermining the compensation and taking possession throughSection 11 and Section 16 of Act, 1894 is contemplated, which isEundertaken after issue of notice under Section 9 of Act, 1894. Inso far as the said process, in order to protect the interest of theland loser to be compensated within a time frame, failing which,to give him benefit of his own land, Section 11A was inserted byAct 68 of 1984, w.e.f 24.09.1984. The said provision leaves noambiguity whatsoever that if the award is not made within theFperiod of two years from the date of publication of the declarationunder Section 6 of Act, 1894, the entire proceedings will standlapsed. The only option for the acquiring authority if the land isstill required for the public purpose is to notify afresh from thestage of issuing notification under Section 4 of Act, 1894. TheGcomputation of two years would however exclude the period ifthe process was stayed by an order of the Court. [Para 11][769-F-H; 770-A-B]

1.3 So far so good, the question however is as to whetherthe rigour of Section 11A of Act, 1894 will apply when theappropriate Government exercises its special power in cases ofH

urgency, which does not contemplate the same procedure as inthe normal acquisition process noted above. In this regard alsothis Court in Yusufbhai Noormohmed Nandoliya has held Section11A is applicable to acquisition under Section 17, though withoutdetailed discussion. From the provision of Section 17 reproducedsupra, it is seen that the acquiring authority will be entitled totake possession without taking recourse to the procedure whichis otherwise provided under Section 16 of Act, 1894 wherein itcontemplates the passing of an award before taking possession.But under Section 17 of Act, 1894, possession is permitted to betaken even before the award is passed. Though such power wasabsolute earlier, sub--section (3A) was inserted by Act 68 of 1984,w.e.f 24.09.1984 whereby the pre- condition imposed before takingpossession is that 80% of the estimated compensation is to betendered and paid to the persons interested in the land. Thetendered amount should be paid unless prevented by one or moreof the contingencies mentioned in Section 31(2) of Act, 1894. Itwould necessarily mean that Section 31 will come into play andthe 80% of the estimated compensation amount, though no awardis passed, will have to be tendered and paid to the personsinterested. If tendered, but not able to pay due to valid reasons,it is to be deposited in Court. The word employed in sub-section(3A) of Section 17 of the Act, 1894 is “shall” and it is to betendered and paid “before taking possession”. Hence it cannotbe understood as providing any discretion to the acquiringauthority. In fact, the last sentence of sub-section (1) of Section17 uses the word “thereupon” with respect to vesting. This word“thereupon” is correlated to taking possession and payment interms of sub-section (3A) is a sine qua non for taking possession.Therefore (1) payment of 80% (2) taking over possessionthereafter and (3) vesting of land in the government take placein a sequence. Absent anyone of these in the sequence, theemergency provision fails. It is a pre- requisite condition toacquire and take possession of the land since such acquisition ispermitted by exempting the requirement of the procedure underSection 5A and possession is permitted to be taken prior to anaward being passed under Section 11 of Act, 1894. [Para 12][770-C-H; 771-A-B]

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A1.4 That apart, sub-section (4) to Section 17 of Act, 1894provides the discretion to the appropriate Government to waivethe application of the provisions of Section 5A and make thedeclaration under Section 6 in respect of the land at any timeafter the initial publication of the notification under Section 4 ofAct, 1894. This makes it clear that even in a case where theBappropriate Government exercises its power to invoke thespecial power in case of urgency, all other procedure contemplatedunder the Act except the requirement under Section 5A of Act,1894 is to be complied. Therefore, after issue of the initialnotification under Section 4 read with Section 17(1) and on takingCpossession after issue of notice under Section 9, the declarationunder Section 6 of Act, 1894 is to be made so as to complete theprocess of acquisition, which indicates that the objection toacquisition of land shall alone stand muted and not the right tocompensation which is to be paid in strict compliance of therequirement in that regard. Hence, insofar as payment ofDcompensation for the acquired land even if it is acquired underSection 17 of Act, 1894, it is evident that an award as contemplatedunder Section 11 of Act, 1894 is required to be passed so as todetermine the compensation payable. Since sub--section (3A) toSection 17 mandates payment of 80% of the estimatedEcompensation, such amount paid would get included in the amountto be determined and offered through the award. In that contextit is clear that Section 17(4) contemplates, that the declaration isto be made under Section 6 even when an urgency provision isinvoked and an award under Section 11 is to be passed todetermine the compensation. However, on a careful compositeFperusal of all the provisions noted above, it is evident that therequirement to tender and pay 80% of the estimatedcompensation before taking possession assumes significance soas to carve out an exception for non--applicability of ‘lapsing’ ascontemplated under Section 11A of Act, 1894. This is so, sinceGthe terms “vesting absolutely” and “lapsing” cannot co-exist andcannot go hand in hand. Post amendment w.e.f 24.09.1984, twoelements have been inserted in Section 17 for the land to vestabsolutely in the Government for public purpose even beforethe award is passed. One, is that possession should be taken.The other is, by inserting sub-section (3A) it has been madeH

mandatory to tender payment of 80% of estimated compensationbefore taking possession. Therefore, 80% of the estimatedcompensation, the payment of which only if tendered and paid,the vesting would become absolute and in such event theconsequence of lapsing in respect of absolutely vested land cannotoccur and as such, in that circumstance alone Section 11A houghapplicable will not take effect. The right of the land loser wouldbe to enforce passing of award which will include the balance20% of compensation even if it is beyond two years and getadequately compensated in terms of Section 23 and 34 of Act,1894 for the delay if any. [Paras 13-15][771-B-H; 772-A-C]

1.5 Section 11A though applicable to the cases ofacquisition initiated under Section 17(1) of Act, 1894 theconsequence of it will not affect the case where the land hasabsolutely vested on compliance of sub-section (3A) to Section17 of Act, 1894 and 80% of estimated compensation is tenderedand paid. Hence, when there is a challenge by the land loser,each case will have to be considered on its own merits todetermine whether the pre-requisite condition to tender and payas contemplated under sub-section (3A) is made beforepossession is taken. If in the case concerned the mandatoryprerequisite is not complied, such acquisition will loose itscharacter as being under Section 17 and if the award is not passedwithin two years from the date of the declaration, it will lapse andnot otherwise. The benefit of said provision is available only tobe invoked by the land loser and cannot be invoked by theacquiring authority to claim lapse by pointing to non- compliancesince the ‘vice’ of non-compliance cannot be permitted to beconverted into a ‘virtue’. The acquiring authority and/orbeneficiary cannot derive benefit of non-compliance ofrequirement of Section 17(3A) and take benefit of Section 11A ofAct, 1894. The benefit of the provision is for the land loser. InSatendra Prasad Jain also this Court was of the opinion that itwas not open for the acquiring authority or the beneficiary totake benefit of Section 11A and Section 17(3A) which is intendedto benefit the land owner to ensure that award be made withintime. Hence it is clear that Satendra Prasad Jain does not laydown the ratio that the acquisition does not lapse under any A

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Acircumstance if the urgency provision under Section 17 of Act,1894 is invoked but it only disapproved applying it against theland loser. [Paras 17, 20][772-H; 777-F-H]

Satendra Prasad Jain vs. State of U.P (1993) 4 SCC369 : [1993] Supp 2 SCR 336 – clarified.B1.6 The decision in this case based on the principle of lawsettled herein, if it arises for consideration in any other case underAct, 1894 or any other enactment relating to land acquisitioncontaining pari materia provisions shall be applied onlyprospectively and cases which have attained finality shall not beCreopened. The provision contained in Section 11A of Act, 1894shall be applicable to cases in which the acquiring authority hasnot complied with the requirement of sub-section (3A) to Section17 of Act, 1894 by tendering and paying eighty per centum of theestimated compensation before taking possession sincepossession in such cases cannot be considered to be taken inDaccordance with law and the vesting is not absolute. If therequirement is complied and possession is taken after tenderingand paying eighty per centum, though there is need to pass anaward and pay the balance compensation within a reasonable time,the rigour of Section 11A of Act, 1894 will not apply so as to renderEthe entire proceedings for acquisition to lapse in the context ofabsolute vesting. The right of land loser in such case is to enforcepassing of the award and recover the compensation. In the instantcase though Section 11A of Act, 1894 has become applicable, inthe changed circumstance we deem it proper to mould the reliefinstead of holding the acquisition to have lapsed. Hence for theFreasons stated above, it is directed as follows: The respondentsshall construe 09.06.2008 as the relevant date and determinethe market value prevailing as on that date applying the yardstickunder Act, 1894 in respect of the acquired land. To calculate thestatutory benefits on such amount including interest, the sameGshall be determined by taking into consideration the date of theSection 4 notification dated 17.04.2002 since the appellant wasdispossessed on 04.02.2003 pursuant to the same. The date onwhich the fresh award is passed pursuant to this judgment andcommunicated shall be the date of cause of action for seekingenhancement of compensation if the appellant is dissatisfied withH

the quantum of compensation offered. The compensationdetermined in this case shall not give the cause of action to anyother land loser whose land is acquired under the samenotification to seek re-determination of compensation. [Paras 25and 26][779-D-H; 780-A-F]

Coffee Board, Karnataka, Bangalore vs. Commissionerof Commercial Taxes, Karnataka and Others (1988) 3SCC 263 : [1988] 1 Suppl. SCR 348; YusufbhaiNoormohmed Nandoliya vs. State of Gujarat and Anr.(1991) 4 SCC 531 : [1991] 1 Suppl. SCR 158; IndoreDevelopment Authority vs. Manoharlal & Others (2020)8 SCC 129 : [2020] 3 SCR 1; Laxmi Devi vs. State ofBihar (2015) 10 SCC 241 : [2015] 11 SCR 179;Allahabad Development Authority vs. Nasiruzzaman &Ors (1996) 6 SCC 424 : [1996] 5 Suppl. SCR 435;Deptt. of Telecommunications vs. Madan MohanPradhan (1995) 4 Suppl. SCC 268 : [1995] 5 Suppl.SCR 1; Banda Development Authority vs. Moti LalAgarwal (2011) 5 SCC 394 : [2011] 7 SCR 435 -referred to.

Case Law Reference

From the Judgment and Order dated 28.08.2006 of the High Courtof Judicature at Allahabad in Civil Misc. Writ Petition No.22251 of 2006.

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ASudhir Chandra, Sr. Adv., Rakesh Singh, Arun K. Sinha, BhagabatiPrasad Padhy, Achintya Dvivedi, Advs. for the Appellants.

Ravindra Raizada, ASG, Ravindra Kumar, Sr. Adv., Binay KumarDas, Ms. Priyanka Das, Ms. Neha Das, Ajai Kumar, Ms. Saloni Sharan,Rajeev Kumar Dubey, Ashiwan Mishra, Ms. Vaidruti Mishra, KamlendraBMishra, Dinesh Kumar Garg, Dhananjay Garg, Abhishek Garg, IshaanTiwari, Advs. for the Respondents.

The Judgment of the Court was delivered by

A. S. BOPANNA, J.

1. This appeal has a chequered history.The appeal was heard byCa Bench consisting of two Hon’ble Judges (Justice A.K. Ganguly andJustice Swatanter Kumar) and was decided by the Judgment dated18.08.2011 with divergent opinion. In the process, after consideration,Hon’ble Justice A.K. Ganguly arrived at the conclusion that taking overpossession of the land without complying the requirement under SectionD17(3A) of the Land Acquisition Act, 1894 (for short ‘Act, 1894’) is clearlyillegal and in violation of the statutory provision which automaticallyviolates the constitutional guarantee under Article 300A of theConstitution. However, on taking note that the land had been utilised anddeveloped by the beneficiary of the acquisition, had allowed the retentionof the land by directing to pass an award by construing the date of filingEthe writ petition i.e. 01.03.2006 as the date of Section 4 notification toreckon the market value as against the actual date of notification. Henceallowed the appeal in those terms.

2. On the other hand, Hon’ble Justice Swatanter Kumar, however,disagreed with the said conclusion and for the separate reasons assignedFby the learned Judge, arrived at the conclusion that Section 11A of Act,1894 has no application to acquisition under Section 17 of Act, 1894. Itwas further held that the default in complying with Section 17(3A) ofAct, 1894 does not invalidate or vitiate the entire acquisition proceedings.The learned Judge while deciding so had however misconstrued that80% of the estimated value in terms of sub-section (3A) of Section 17Ghad been paid to the land loser and in that context held that the interestprovided in terms of Section 34 will be payable. In that view, the learnedJudge ordered dismissal of the appeal in terms of the directions issued.

3. In that backdrop, in view of the divergence of opinion betweenthe learned Judges, they had ordered the matter to be placed beforeHHon’ble the Chief Justice of India for reference to a larger Bench to resolve the conflict. It is in that circumstance Hon’ble the Chief Justicehas ordered the matter to be placed before a Bench consisting of threeJudges. However, no specific question has been formulated and referredfor decision by a three-member Bench. Hence, we have heard the matterbased on the factual aspects involved in this case de-novo, so as todetermine the legal aspects which touch upon the same.

4. It would therefore be necessary for us to at the outset takenote of the factual matrix involved in this case. The New Okhla IndustrialDevelopment Authority (NOIDA) – Respondent No.2 was to implementa planned Industrial layout in Gautam Budh Nagar District for whichpurpose the requisite land was to be acquired. The project was envisagedby the State of U.P–Respondent No.1 as a part of planned IndustrialDevelopment. Hence, Respondent No.1 being the appropriateGovernment, issued the Notification dated 17.04.2002 invoking the specialpower due to urgency. The Notification was therefore issued underSection 4(1) read with Section 17(1) and (4) of Act, 1894, whereby therequirement of procedure under Section 5A of the Act, 1894 wasdispensed. Pursuant thereto, the declaration under Section 6 of the Act,1894 was notified and published on 22.08.2002 declaring that the areawas required by the Government for planned industrial development. Itwas also stated that after the expiry of 15 days from the date of publicationof notification under sub-section (1) of Section 9 of the Act, 1894,possession of the acquired land will be taken.

5. In the large extents of land that was notified, an extent measuring2-06-1/3-0 Bighas situated in village Haldauni, Tehsil and Pargana Dadri,District Gautam Budh Nagar, an ‘Abadi’ land was also included. TheAppellant, a company incorporated under the provisions of the CompaniesAct, 1956 claims to be the owner of the said small extent of land. TheAppellant alleges that they were not served with the notice contemplatedunder Section 9(1) of Act, 1894. However, it is not disputed that possessionwas nevertheless taken on 04.02.2003. But the grievance raised by theAppellant is that neither the initial requirement of tendering and paying80% of the estimated compensation contemplated under sub-section (3A)to Section 17 of Act, 1894 was complied nor was the requirement ofSection 11A of the Act, 1894 to pass the award within two years fromthe date of declaration under Section 6 of Act, 1894 complied. In thatview, the Appellant filed the writ petition on 01.03.2006 since more thanthree and half years had elapsed and neither of the provisions had been A

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Acomplied. The appellant therefore contended that the acquisition in sofar as the land belonging to the Appellant has lapsed and the same shouldrevert to the Appellant.

6. The High Court having considered the matter was of the opinionthat Section 11A of Act, 1894 is not attracted to the proceedings forBacquisition in exercise of the power under Section 17 of Act, 1894. Inthat regard, the High Court relied on the decision of this Court in SatendraPrasad Jain Vs. State of U.P (1993) 4 SCC 369 and dismissed the writpetition by order dated 28.08.2006, which has given rise to the aboveappeal which was earlier heard by a Bench consisting of two Hon’bleJudges who have differed as noted supra. While taking note of the decisionCin Satendra Prasad Jain, rendered by a Bench of three Hon’ble Judges,Justice A.K. Ganguly has found it to be sub-silentio and per incuriamin the face of the provision contained in the statute. Justice SwatanterKumar, the other Hon’ble Judge however relied on the decision inSatendra Prasad Jain (supra) holding that compliance with Section17(3A) of the Act, 1894 is not mandatory. Hence even in the circumstanceDof non- compliance, the benefit of interest as provided in Section 34 ofthe Act, 1894 was held as the entitlement. Section 11A of Act, 1894 wasalso held not applicable to the acquisition under Section 17 of Act, 1894.Though detailed reasons have been tendered by both the learned Judgesfor their respective opinion and has also been referred to by the learnedESenior Counsel for the parties, we do not propose to go into the samesince the entire matter has been placed before us and the case put forthby the parties is to be independently examined by us.

7. In the above background we have heard Shri Sudhir Chandra,learned senior counsel for the appellant, Shri Ravindra Kumar, learnedsenior counsel for the Respondent No.1, Shri Ravindra Raizada, learnedFsenior counsel for Respondent No.2, exhaustively and have perused theappeal papers.

8. In the light of the contentions urged, the following questionsarise for our consideration.

a.Is the requirement to tender payment of 80% of theGestimated compensation as contemplated undersub-section(3A) to Section 17 of Act, 1894, mandatory toensure absolute vesting of the notified land.

b.Whether the requirement to pass the award within the timeframe contemplated under Section 11A applicable to theHacquisition notified under Section 17 of Act, 1894.

c.Can the case in Satendra Prasad Jain (supra) beconsidered as a decision laying down ratio decidendi onthe above questions?

9. In order to decide the scope and ambit of the provisions underconsideration it would be appropriate to reproduce Section 11A andSection 17 of the Act, 1894 in its entirety and keep the same inperspective. Needless to mention that if the plain meaning of the provisiondoes not admit of any ambiguity no other external aid will be necessaryto interpret the provision except to give it the plain meaning. The relevantprovision read as hereunder:

“Section 11A- Period within which an award shall be made-(1) The Collector shall make an award under section 11 within aperiod of two years from the date of the publication of thedeclaration and if no award is made within that period, the entireproceeding for the acquisition of the land shall lapse:

Provided that in a case where the said declaration has beenpublished before the commencement of the Land Acquisition(Amendment) Act, 1984, the award shall be made within a periodof two years from such commencement.

Explanation - In computing the period of two years referred to inthis section, the period during which any action or proceeding tobe taken in pursuance of the said declaration is stayed by an orderof a Court shall be excluded.”

“Section 17- Special powers in case of urgency – (1) In casesof urgency whenever the [appropriate Government], so directs,the Collector, though no such award has been made, may, on theexpiration of fifteen days from the publication of the noticementioned in section 9, sub-section (1), [take possession of anyland needed for a public purpose]. Such land shall thereupon [vestabsolutely in the [Government], free from all encumbrances.

(2) Whenever, owing to any sudden change in the channel ofany navigable river or other unforeseen emergency, it becomesnecessary for any Railway Administration to acquire the immediatepossession of any land for the maintenance of their traffic or forthe purpose of making thereon a river-side or ghat station, or ofproviding convenient connection with or accesses to any suchstation, [or the appropriate Government considers it necessary to A

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acquire the immediate possession of any land for the purpose ofmaintaining any structure or system pertaining to irrigation, watersupply, drainage, road communication or electricity,] the Collectormay, immediately after the publication of the notice mentioned insub-section (1) and with the previous sanction of the [appropriateGovernment], enter upon and take possession of such land, whichshall thereupon [vest absolutely in the [Government]] free fromall encumbrances:

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Provided that the Collector shall not take possession of anybuilding or part of a building under this sub-section without givingto the occupier thereof at least forty-eight hours’ notice of hisintention so to do, or such longer notice as may be reasonablysufficient to enable such occupier to remove his movable propertyfrom such building without unnecessary inconvenience.

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(3) In every case under either of the preceding sub-sections theCollector shall at that time of taking possession offer to the personsDinterested compensation for the standing crops and trees (if any)on such land and from any other damage sustained by them causedby such sudden dispossession and not excepted in section 24;and, in case such offer is not accepted, the value of such cropsand trees and the amount of such other damage shall be allowedEfor in awarding compensation for the land under the provisionsherein contained.

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[(3A) Before taking possession of any land undersub-section (1) or sub-section (2), the Collector shall, withoutprejudice to the provisions of sub-section (3)- F

(a) tender payment of eighty per centum of the compensationfor such land as estimated by him to the persons interestedentitled thereto, and (b) pay it to them, unless prevented by some one or more ofthe contingencies mentioned in section 31, sub-section (2), andwhere the Collector is so prevented, the provisions of section31, sub-section (2) (except the second proviso thereto), shallapply as they apply to the payment of compensation under thatsection.

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(3B) The amount paid or deposited under section (3A), shallbe taken into account for determining the amount of H

compensation required to be tendered under section 31, andwhere the amount so paid or deposited exceeds thecompensation awarded by the Collector under section 11, theexcess may, unless refunded within three months from the dateof Collector’s award, be recovered as an arrear of landrevenue].

[(4) In the case of any land to which, in the opinion of the[appropriate Government], the provisions of sub-section (1) orsub- section (2) are applicable, the [appropriate Government]may direct that the provisions of section 5A shall not apply,and, if it does so direct, a declaration may be made under section6 in respect of the land at any time [after the date of thepublication of the notification] under section 4, sub-section (1).”

10. At the outset, the learned senior counsel for Respondent No.1,in an attempt to sustain the acquisition strenuously contended with regardto eminent domain of the State in the matter of acquisition of land forpublic purpose and relied upon the case in Coffee Board, Karnataka,Bangalore Vs. Commissioner of Commercial Taxes, Karnataka andOthers (1988) 3 SCC 263. To be fair to him, though we have noted, weare however clear on that aspect that the State has the power. But theposition of law is also well established that in view of Articles 300A and31A of the Constitution, the owner of land can be divested only inaccordance with law after appropriately compensating if such land isrequired by the State for public purpose. Since such power of eminentdomain is not in dispute, we need not advert to the decision referred indetail.

11. In the normal circumstance, the process for acquisition wouldcommence with the notification under Section 4, after which theprocedure under Section 5A is complied. The declaration under Section6 is thereafter made, when the requirement of the land for public purposeis confirmed. Thereafter, the process for determining the compensationand taking possession through Section 11 and Section 16 of Act, 1894 iscontemplated, which is undertaken after issue of notice under Section 9of Act, 1894. In so far as the said process, in order to protect the interestof the land loser to be compensated within a time frame, failing which, togive him benefit of his own land, Section 11A was inserted by Act 68 of1984, w.e.f 24.09.1984. The said provision leaves no ambiguitywhatsoever that if the award is not made within the period of two years A

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Afrom the date of publication of the declaration under Section 6 of Act,1894, the entire proceedings will stand lapsed. The only option for theacquiring authority if the land is still required for the public purpose is tonotify afresh from the stage of issuing notification under Section 4 ofAct, 1894. The computation of two years would however exclude theperiod if the process was stayed by an order of the Court. This aspectBhas been clarified by this Court in Yusufbhai Noormohmed NandoliyaVs. State of Gujarat and Anr. (1991) 4 SCC 531, placed for ourconsideration by the learned senior counsel for the appellant.

12. So far so good, the question however is as to whether therigour of Section 11A of Act, 1894 will apply when the appropriateCGovernment exercises its special power in cases of urgency, which doesnot contemplate the same procedure as in the normal acquisition processnoted above. In this regard also this Court in Yusufbhai NoormohmedNandoliya (supra) has held Section 11A is applicable to acquisition underSection 17, though without detailed discussion. From the provision ofDSection 17 reproduced supra, it is seen that the acquiring authority willbe entitled to take possession without taking recourse to the procedurewhich is otherwise provided under Section 16 of Act, 1894 wherein itcontemplates the passing of an award before taking possession. Butunder Section 17 of Act, 1894, possession is permitted to be taken evenbefore the award is passed. Though such power was absolute earlier,Esub-section (3A) was inserted by Act 68 of 1984, w.e.f 24.09.1984whereby the pre-condition imposed before taking possession is that 80%of the estimated compensation is to be tendered and paid to the personsinterested in the land. The tendered amount should be paid unlessprevented by one or more of the contingencies mentioned in SectionF31(2) of Act, 1894. It would necessarily mean that Section 31 will comeinto play and the 80% of the estimated compensation amount, though noaward is passed, will have to be tendered and paid to the personsinterested. If tendered, but not able to pay due to valid reasons, it is to bedeposited in Court. The word employed in sub-section (3A) of Section 17 of the Act, 1894 is “shall” and it is to be tendered and paid “beforeGtaking possession”. Hence it cannot be understood as providing anydiscretion to the acquiring authority. In fact, the last sentence ofsub-section (1) of Section 17 uses the word “thereupon” with respect tovesting. This word “thereupon” is correlated to taking possession andpayment in terms of sub-section (3A) is a sine qua non for takingHpossession. Therefore (1) payment of 80% (2) taking over possession thereafter and (3) vesting of land in the government take place in asequence. Absent anyone of these in the sequence, the emergencyprovision fails. It is a pre- requisite condition to acquire and takepossession of the land since such acquisition is permitted by exemptingthe requirement of the procedure under Section 5A and possession ispermitted to be taken prior to an award being passed under Section 11 ofAct, 1894.

13. That apart, sub-section (4) to Section 17 of Act, 1894 providesthe discretion to the appropriate Government to waive the application ofthe provisions of Section 5A and make the declaration under Section 6 inrespect of the land at any time after the initial publication of the notificationunder Section 4 of Act, 1894. This makes it clear that even in a casewhere the appropriate Government exercises its power to invoke thespecial power in case of urgency, all other procedure contemplated underthe Act except the requirement under Section 5A of Act, 1894 is to becomplied. Therefore, after issue of the initial notification under Section 4read with Section 17(1) and on taking possession after issue of noticeunder Section 9, the declaration under Section 6 of Act, 1894 is to bemade so as to complete the process of acquisition, which indicates thatthe objection to acquisition of land shall alone stand muted and not theright to compensation which is to be paid in strict compliance of therequirement in that regard.

14. Hence, insofar as payment of compensation for the acquiredland even if it is acquired under Section 17 of Act, 1894, it is evident thatan award as contemplated under Section 11 of Act, 1894 is required tobe passed so as to determine the compensation payable. Since sub-section(3A) to Section 17 mandates payment of 80% of the estimatedcompensation, such amount paid would get included in the amount to bedetermined and offered through the award. In that context it is clear thatSection 17(4) contemplates, that the declaration is to be made underSection 6 even when an urgency provision is invoked and an awardunder Section 11 is to be passed to determine the compensation.

15. However, on a careful composite perusal of all the provisionsnoted above, it is evident that the requirement to tender and pay 80% ofthe estimated compensation before taking possession assumes significanceso as to carve out an exception for non-applicability of ‘lapsing’ ascontemplated under Section 11A of Act, 1894. This is so, since the terms“vesting absolutely” and “lapsing” cannot co-exist and cannot go hand AB

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Ain hand. Post amendment w.e.f 24.09.1984, two elements have beeninserted in Section 17 for the land to vest absolutely in the Governmentfor public purpose even before the award is passed. One, is that possessionshould be taken. The other is, by inserting sub-section (3A) it has beenmade mandatory to tender payment of 80% of estimated compensationbefore taking possession. Therefore, 80% of the estimated compensation,Bthe payment of which only if tendered and paid, the vesting would becomeabsolute and in such event the consequence of lapsing in respect ofabsolutely vested land cannot occur and as such, in that circumstancealone Section 11A though applicable will not take effect. The right of theland loser would be to enforce passing of award which will include theCbalance 20% of compensation even if it is beyond two years and getadequately compensated in terms of Section 23 and 34 of Act, 1894 forthe delay if any.

16. But it is a different matter altogether, when Section 17(1) isinvoked but the requirement thereunder which is a pre-requisite conditionDis not complied. As noted, sub-section (3A) has been inserted w.e.f.24.09.1984, whereunder it is made mandatory to tender and pay 80% ofthe estimated compensation before taking possession. Therefore, evenif possession is taken, such possession cannot be considered as legal soas to vest the land absolutely if the pre-requisite condition for paymentof 80% before taking possession is not complied. In such circumstance,Eby legal fiction it looses its character as an acquisition under Section 17and since the absolute vesting does not take place, it will lapse if thefurther process is not complied and the award is not passed within twoyears from the date of declaration. However, even when the pre-conditionis not complied, if the land loser does not challenge the acquisition and/orFtaking of possession as illegal, but concedes to the position, the possessiontaken does not become per-se illegal and the vesting will be absolute andin such event it cannot be considered to have lapsed until the land loserexercises the right. We consider it so, since, both Section 11A andsub-section (3A) to Section 17 of Act, 1894 were inserted in Act,1894 to enable the land losers to exercise their right conferred on them. As such,Gthe said right is to be exercised by the land loser and none other, noteven the acquiring authority or beneficiary nor would the said provisionbecome automatically applicable unless it is triggered by the land loser.17. Therefore, we are of the considered view that Section 11Athough applicable to the cases of acquisition initiated under Section 17(1)H

of Act, 1894 the consequence of it will not affect the case where theland has absolutely vested on compliance of sub-section (3A) to Section17 of Act, 1894 and 80% of estimated compensation is tendered andpaid. Hence, when there is a challenge by the land loser, each case willhave to be considered on its own merits to determine whether thepre-requisite condition to tender and pay as contemplated undersub-section (3A) is made before possession is taken. If in the caseconcerned the mandatory prerequisite is not complied, such acquisitionwill loose its character as being under Section 17 and if the award is notpassed within two years from the date of the declaration, it will lapseand not otherwise. The benefit of said provision is available only to beinvoked by the land loser and cannot be invoked by the acquiring authorityto claim lapse by pointing to non- compliance since the ‘vice’ ofnon-compliance cannot be permitted to be converted into a ‘virtue’.

18. Though the learned counsel for the beneficiary- RespondentNo.2 placed reliance on the decision in Indore Development AuthorityVs. Manoharlal & Others (2020) 8 SCC 129 rendered by the ConstitutionBench to contend that it has been held therein that “paid” as containedin Section 24(2) of RFCTLARR Act, 2013 does not include deposit ofcompensation in Court, we are of the considered opinion that the samewill not be applicable to the question under consideration before us inthis case. In the instant case, the requirement to tender and pay 80% ofthe estimated compensation and the consequent lapsing as consideredabove is in the context of exercise of urgency provision which permits adeviation from the normal process of acquisition and the paymentenvisaged is to take benefit of the said provision. In contradistinction,the consideration in the cited case is about the effect of Section 24 (2) ofAct, 2013 in the circumstance contemplated therein.

19. In considering the effect of Satendra Prasad Jain (supra) itwould be appropriate to take note of the decision relied on by the learnedsenior counsel for the appellant in Laxmi Devi Vs. State of Bihar (2015)10 SCC 241 wherein it is analysed as hereunder:

“26. This is also in line with a plain reading of Section 17(1),which states that “once possession of the land is taken by theGovernment under Section 17, the land vests absolutely in theGovernment, free from all encumbrances”. In Section 48(1) thetaking over of the possession of the land is of seminal significancein that the provision succinctly states that “the Government shall A

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be at liberty to withdraw from the acquisition of any land thepossession of which has not been taken”. The next sub-sectioncovers calculation of compensation for the aborted occupation.

26.1. The same position came to be reiterated in Satendra PrasadJain by a three-Judge Bench of this Court. The acquisitionproceedings including the exclusion of Section 5-A had obtainedthe imprimatur of the Allahabad High Court; the urgency and publicpurpose had received curial concurrence. Possession of the landwas taken by the State from the landowners. Previously, the specialleave petition filed by the landowners had been dismissed by thisCourt. Ironically, the subsequent stance of the State was that theacquisition of land under the urgency provisions was required tobe set aside for the reason that the State had failed to pass anaward under Section 11 within two years and had also failed topay eighty per cent of the estimated compensation required underSection 17(3-A). Whilst the State endeavoured to withdraw fromthe acquisition, the erstwhile landowners opposed it. This Courtdirected the State “to make and publish an award in respect ofthe said land within twelve weeks from today”. Theabovementioned discussion bears out that this Court wasconcerned only with the issue of the land being returned by theState to the erstwhile owner. It does not go so far as to limit orrestrict the rights of landowners to fair compensation for theirexpropriated property, as that is a constitutional right which cannotbe nullified, neutralised or diluted.

26.2. We think it justified to again refer to the opinion in SatendraPrasad Jain that : (SCC p. 374, para 16)

“16. … Section 11-A cannot be so construed as to leave theGovernment holding title to the land without the obligation todetermine compensation, make an award and pay to the ownerthe difference between the amount of the award and the amountof eighty per cent of the estimated compensation.”

26.3. The second issue, one that we feel must be kept in mind inthe interpretation in the law laid down by this Court, is the factualmatrices involved in both Satendra Prasad Jain and AvinashSharma. In both these precedents, as well as in innumerable othersthat have relied upon them, the Government’s attempt was tomisuse its own omissions to achieve its own oblique purposes. It was in this context that this Court declined to accede to the pleasof the Government. This Court poignantly repelled the State’sattempt to nullify the acquisition on the predication of its non-compliance with Sections 16 and 17(3-A). The judicial intent wasnot to cause any loss to landowners, but to protect them. Thepernicious practice that was becoming rampant, that is to makepartial compliance with the statute and to follow the acquisitionprocedure in a piecemeal manner, and then to argue that its ownlapses rendered its acquisition illegal, was roundly repulsed.Although this strictly constitutes obiter, we think it appropriate toclarify that where the landowners do not assail the acquisition, itmay be open to them to seek a mandamus for payment to them,after a reasonable period, of the remaining compensation, whichwill thereupon metamorphose from a mere estimation to the actualcompensation for the expropriation.

28. We do, however, recognise that Satendra Prasad Jain hasbeen interpreted more broadly in the past. In AllahabadDevelopment Authority v. Nasiruzzaman, Deptt. ofTelecommunications v. Madan Mohan Pradhan and BandaDevelopment Authority v. Moti Lal Agarwal, this Court hasdismissed the landowners’ challenges to the respective acquisitionson the basis of Avinash Sharma and Satendra Prasad Jain. Itis pertinent to note that all three of these cases were brief in theirexplanations of Avinash Sharma and Satendra Prasad Jain anddid not examine their rationes decidendi, their innate contradictions,their intentions or their consequences at any length. We thus feelit appropriate to rely on our own detailed exploration of thesecases, as opposed to simply placing reliance on the largelycontradictory case law that has developed over the years. It wasfor this reason that we had revisited the curial concept of ratiodecidendi.

29. The scenario before us depicts the carelessness and thecallousness of the State, quite different from the situation inSatendra Prasad Jain and Avinash Sharma. The appellantsherein are being denied just and fair compensation for their landin proceedings which commenced in 1987, despite the directionsof the High Court passed as early as in 1988 to pass an awardwithin four months. The raison d’être behind the introduction of A

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Section 11-A was for the landowners to have a remedy in theevent of an award not being passed expeditiously. If SatendraPrasad Jain is interpreted to mean that Section 11-A will notapply to any acquisition under the urgency provisions, landownerssuch as the appellants before us will have no protection, even ifthey are not paid full compensation for their land for decades.This cannot be in keeping with the legislative intent behind thissection. Furthermore, keeping empirical evidence in sight, we makebold to opine that circumstances require this Court to reconsiderits view that even if the stated public interest or cause has ceasedto exist, any other cause can substitute it, especially where theurgency provisions have been invoked.

30. We feel it imperative to distinguish between the setting asideof an acquisition and the reversion of possession to the erstwhilelandowners. While the LA Act and the judgments discussed abovedo not allow for the latter, we are of the considered opinion thatthis does not necessarily imply that the former is also not an option.Both the abovementioned cases dealt with a factual situation inwhich the Government was attempting to set the acquisition ofthe land at naught so that they would not have to pay compensationto acquire it. Setting aside of the acquisition in those cases wastantamount to reverting the possession to the original owners. Inthis scenario, however, the two do not have to go hand in hand. Inallowing the acquisition of land that the Government findsnecessary to be set aside, we would not necessarily be holdingthat the land revert to the appellants, as the alternative of permittingthe Government to keep possession provided it reacquires theland with a new Section 4 notification exists. This option, particularlyin the present factual matrix, does the least violence to the intentand content of the LA Act, in that it upholds Section 11-A even incases of acquisition under Section 17 while preserving therequirement of Section 17 that the unencumbered possession ofthe land remain vested in the Government. It also protects therights of the landowners, thus fulfilling the intent of Section 11-A,while allowing the Government to acquire land in cases ofemergencies without its title being challenged, which is the avowedintention of Section 17. Any other interpretation of the law wouldserve to protect only those landowners who had approached the

court to stop the Government from undoing an emergencyacquisition, while leaving in the cold equally aggrieved landownersseeking to enforce their right to fair compensation for their land.Even equity demands that the party bearing the consequence ofthe delay in the award ought not to be the innocent landowner, butthe errant State.”

20. We are in agreement with the opinion expressed in LaxmiDevi (supra) by a Bench of two Hon’ble Judges. In our opinion also thephilosophy based on which the decision in Satendra Prasad Jain (supra)was rendered is as contained in para-17, which reads as hereunder:

“17. In the instant case, even that 80 per cent of the estimatedcompensation was not paid to the appellants although Section 17(3-A) required that it should have been paid before possession ofthe said land was taken but that does not mean that the possessionwas taken illegally or that the said land did not thereupon vest inthe first respondent. It is, at any rate, not open to the thirdrespondent, who, as the letter of the Special LandAcquisition Officer dated June 27, 1990 shows, failed tomake the necessary monies available and who has been inoccupation of the said land ever since its possession wastaken, to urge that the possession was taken illegally andthat, therefore, the said land has not vested in the firstrespondent and the first respondent is under no obligationto make an award.”

(Emphasis supplied)

We have also in our view indicated above that the acquiringauthority and/or beneficiary cannot derive benefit of non- compliance ofrequirement of Section 17(3A) and take benefit of Section 11A of Act,1894. The benefit of the provision is for the land loser. In SatendraPrasad Jain (supra) also this Court was of the opinion that it was notopen for the acquiring authority or the beneficiary to take benefit ofSection 11A and Section 17(3A) which is intended to benefit the landowner to ensure that award be made within time. Hence it is clear thatSatendra Prasad Jain (supra) does not lay down the ratio that theacquisition does not lapse under any circumstance if the urgency provisionunder Section 17 of Act, 1894 is invoked but it only disapproved applyingit against the land loser.

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A21. In the above background it is noted that in the instant acquisitionfrom which this case arises, an extent in all measuring 63.540 acres(101-15-17, 5/6 Bighas) was acquired through the declaration underSection 6 of Act, 1894 for which a sum of Rs. 7,48,67,857.73 being 80%is stated to have been deposited by Respondent No.2 – Beneficiary,with Respondent No.1 and the balance amount is also deposited onB21.12.2002 so as to enable the collector to enter into an agreement withthe landowners and pay compensation. Insofar as the extent of landbelonging to the appellant, it is stated by Respondent No.1 that a letterdated 01.01.2003 was issued calling upon the appellant to come forwardand execute an agreement. Thereafter there is no effort to tender andCpay 80% of the estimated compensation or to pass an award, whichprompted the appellant to file the writ petition before the High Court.

22. From the sequence of events, it is clear that the other landlosers have entered into an agreement and received compensation. Theappellant on the other hand was neither tendered nor paid 80% of theDestimated compensation as required under sub-section (3A) to Section 17 before taking possession nor was an award passed and compensationpaid within two years from the date of declaration under Section 6 ofAct, 1894.

23. In the normal circumstance, the acquisition would lapse insofarEas the appellant’s land in view of our conclusion on the legal aspect.However, in the fact situation, the relief is required to be moulded. Thisis for the reason that the land belonging to the appellant is not astand-alone extent. As noted, the acquisition was for a planned industriallayout and the total extent acquired and possession taken was 101-15-17, 5/6 bighas of which, the land belonging to the appellant is only 2-06-1/F3-0 bighas. In the planned layout, the land has been utilized for variouspurposes and amenities. A ‘Mandi’ has been constructed over a largerextent of land of which the smaller extent of land belonging to theappellant also forms a part. Hence reversion of the land does not arise.Further, the course as suggested in Laxmi Devi (supra) to issue a freshGnotification also would not be appropriate, since the very scheme ofacquisition and determination of compensation under the old regime hasundergone a sea change. As such it would be unjust not only to the stateexchequer but also the other land losers under the same notification ifthe present prevailing process is applied in determining the compensation.Further, though after being nudged by the High Court, the award in anyH

event was passed on 09.06.2008 under the old regime which is now tobe substituted with adequate compensation.

24. On weighing all aspects of the matter, we deem it appropriatethat it will serve the ends of justice to direct the respondents to determinethe market value insofar as the appellant’s land is concerned by reckoningthe relevant date as 09.06.2008 (i.e. the date on which the award wasultimately passed), by applying the yardstick under Act, 1894. It is madeclear that only the market value be determined as on that date but forawarding the statutory benefits, it shall be calculated from the date ofthe original notification since admittedly the appellant has beendispossessed on 04.02.2003 pursuant to the notification dated 17.04.2002.Further, from the date on which the fresh award is passed pursuant tothis judgment, the appellant would get the cause of action for seekingreference if dissatisfied with the quantum of compensation awarded. Itis made clear that the determination of compensation, in this case, shallnot give rise to any right in favour of any other land loser whose landwas acquired under the same notification, to seek for re- determinationof compensation where the same has already attained finality.

25. The decision in this case based on the principle of law settledherein, if it arises for consideration in any other case under Act, 1894 orany other enactment relating to land acquisition containing pari materiaprovisions shall be applied only prospectively and cases which haveattained finality shall not be reopened.

26. In the result, we pass the following order:

(i) The provision contained in Section 11A of Act, 1894 shallbe applicable to cases in which the acquiring authority hasnot complied with the requirement of sub-section (3A) toSection 17 of Act, 1894 by tendering and paying eighty percentum of the estimated compensation before takingpossession since possession in such cases cannot beconsidered to be taken in accordance with law and thevesting is not absolute.

(ii) If the requirement is complied and possession is taken aftertendering and paying eighty per centum, though there isneed to pass an award and pay the balance compensationwithin a reasonable time, the rigour of Section 11A of Act,1894 will not apply so as to render the entire proceedings A

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for acquisition to lapse in the context of absolute vesting.The right of land loser in such case is to enforce passing ofthe award and recover the compensation.

(iii) In the instant case though Section 11A of Act, 1894 hasbecome applicable, in the changed circumstance we deemBit proper to mould the relief instead of holding the acquisitionto have lapsed. Hence for the reasons stated above, wedirect as follows:

(a) The respondents shall construe 09.06.2008 as therelevant date and determine the market valueprevailing as on that date applying the yardstick underAct, 1894 in respect of the acquired land.

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(b) To calculate the statutory benefits on such amountincluding interest, the same shall be determined bytaking into consideration the date of the Section 4notification dated 17.04.2002 since the appellant wasdispossessed on 04.02.2003 pursuant to the same.

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(c) The date on which the fresh award is passed pursuantto this judgment and communicated shall be the dateof cause of action for seeking enhancement ofcompensation if the appellant is dissatisfied with thequantum of compensation offered.

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(d) The compensation determined in this case shall notgive the cause of action to any other land loser whoseland is acquired under the same notification to seekre-determination of compensation.

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(e) The appellant shall be entitled to the cost incurred inthese proceedings.

27. The appeal is disposed of accordingly.

28. Pending application, if any, stands disposed of.G

Divya Pandey and Anurag Bhaskar(Assisted by : Iram Jan, LCRA)

Appeal disposed of

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