In CIVIL APPEAL NO.3636 OF 2022-SC- Civil right of land owner is violated in breach of Article 300-A of Constitution as owner’s property was sold by NOIDA in absence of formal acquisition, says Top Court while terming such act as constitutional tort Justices Vineet Saran & J.K. Maheshwari [05-05-2022]

Read Judgment: REDDY VEERANA AND ORS Vs. STATE OF UTTAR PRADESH AND ORS. 

LE Correspondent

New Delhi, May 06. 2022: Holding that there is no straight jacket formula to arrive at the quantum of deduction of development charge and same must be assessed based on the facts of the individual case after due consideration of all the factors which might affect such quantum, the Supreme Court has dismissed the appeal preferred by NOIDA and directed the Authority to pay the amount of compensation to the land owner for the acquired property.

A Division Bench of Justice Vineet Saran and Justice J.K. Maheshwari observed that deduction of development charge in the instant case should have been made while considering all the factors and in view of the same, allowed the appeal. 

The present civil appeals  emerge out of the judgment dated October 28, 2010, passed by the High Court of Allahabad whereby the High Court intervened in the award of compensation  dated January 31, 2011, passed by the Additional District Magistrate for acquired land of the appellant and disposed off the petition, hence the present appeals. 

Facts in brief for the perusal of the present appeals were that as per the sale deed dated April 24, 1997, the appellant along with his two brothers purchased the scheduled property land in Gautam Budh Nagar District for a total sale consideration of Rs. 1,00,00,000/- . 

However, through the prior land acquisition proceedings in the year 1979- 1980, a portion of the land purchased was acquired by the State. 

In accordance with the facts on record, pursuant to the purchase of land by the appellant, since earl a y 2000s employees of NOIDA were obstructing the peaceful possession of the appellant which in turn, compelled the appellant to institute a Civil Suit. 

The Trial Court, after due deliberation on the contentions raised by both the parties partly decreed the suit in favour of appellant  and restrained NOIDA from taking possession of land which was not the subject matter of the prior acquisition in year 1979-1980. Further, the Court also declared the appellant as the owner of the remaining portion of land of Khasra No. 422 and 427 which was purchased vide sale deed as mentioned earlier.

Being aggrieved by the same, NOIDA preferred the civil appeal and the same was also dismissed through order dated March 30, 2021. 

It is pertinent to note NOIDA in the year 2003 floated a tender for development of large piece of land including the remaining portion of the land that was the subject matter in the instant case despite of the fact that a decree of permanent injunction was operative through the order of the Trial Court as well as the High Court. The builders were apprised of the fact that out of the large piece of land, the scheduled piece of land was in dispute, and thus they shunned participating in the same. 

However, as the tender was about to close, one bidder namely, M/s DLF Universal Ltd  seventh respondent herein qualified in the said tender. As a result, the large piece of land  was awarded to DLF through order dated April 12, 2004, including the scheduled piece of land on which the injunction order was operative.  After the allotment of land to the seventh respondent a preliminary notification dated 02.09.2005 was issued by NOIDA under Section 4(1) read with Section 17(1) of the Land Acquisition Act, 1894 (1894 Act), followed by a notification dated November 22, 2005  under Section 6 of the 1894 Act, to acquire the scheduled piece of land.

The aforesaid notifications were challenged by the appellant before High Court of Allahabad.The High Court vide order dated December 10, 2009 disposed-off the matter. Being aggrieved, NOIDA challenged the aforesaid judgment in the form of Special Leave to Appeal.

During the pendency of the aforesaid appeal, this Court through order dated January 1, 2011 issued notice while observing that in the meanwhile, there shall be stay of operation of the impugned judgment and order dated December10, 2009 passed by High Court.Thereafter after almost delay of 5 years, an award dated January 31, 2011 was passed by Additional District Magistrate (Land Acquisition), NOIDA, Gautam Buddh Nagar, under Section 11 of 1894 Act. On November 4, 2015, the appeal of NOIDA before this Court was dismissed on the account of meritless. Being aggrieved by the order passed by District Magistrate, the appellant preferred Contempt Petition. 

Consequently this Court through its order dated October 22, 2018, dismissed the aforesaid contempt petition, however granted liberty to the petitioner to avail appropriate remedy before the High Court.The High Court through its impugned judgment and order dated October 28 .2021 dismissed the same. Being aggrieved by the impugned order, the appellant (land- owner) and NOIDA instituted the separate appeals. 

The Court before dealing with the submissions of the parties stated that the legality and validity of judgment dated December 10, 2009 passed by High Court  sustained the scrutiny of this Court and has been upheld by an order dated November 4,2015.The Court further observed that the judgment had attained finality inter-se the parties.

Having said that, the Court further opined that the said judgment had effectively put the controversy inter-se the parties to rest. Thus, the Court in the instant case decided to just observe the directions given by the High Court in the light of prevailing law. In view of the same the Court observed that the conclusion arrived at by High Court was affirmed  by this Court and hence, the right of the appellant  to get compensation in terms of determination as directed was  crystallized and cannot be interfered with. The Court further submitted that it would be unjust and improper to allow re-agitation of issues and vexing the appellant twice when the matter has already been put to rest by impugned judgment inter-se the parties.

Reliance was placed on the case of R. Unnikrishnan and Another Vs. V.K. Mahanudevan and Others, wherein it was held that the binding character of judgments pronounced by courts of competent jurisdiction is itself an essential part of the rule of law, and the rule of law obviously is the basis of the administration of justice on which the Constitution lays so much emphasis.

It was further submitted that the land in dispute was not only designated for commercial use, rather it was also declared to be part of industrial development plan area. After development, even a mall has been constructed on it. Thus the Court opined that the High Court in the impugned order had rightly determined payment of compensation at the rate of Rs. 1, 10,000/- per square meter as per circle rate.

In the light of the preceding discussion, the only question that remained now for the consideration before the Top Court was with respect to deduction of development charges to the extent of 50% made by High Court in impugned order.

On the said issue, the Court observed that there is no straight jacket formula to arrive at the quantum of deduction of development charge and same must be assessed based on the facts of the individual case after due consideration of all the factors which might affect such quantum. As evident, the High Court did not take into consideration all the factors encircling the issue and routinely preceded with the maximum deduction of 50% development charge. The Court noted the same on perusal of the impugned judgment, wherein it was clear that the High Court had inter-alia highlighted the glaring mischiefs played by NOIDA in the whole acquisition proceedings but at the same time, it had failed to accord a substantial reason for maximum deduction of development charges. 

It was further observed that, it is not for the first time that NOIDA is in cross-roads before this Court for playing hand-in-glove with large developers.

Further the Court relied on the case of Bhagwathula Samanna Vs. Special Tahsildar and Land Acquisition Officer, wherein while dealing with the question of principle of deduction in the land value, this Court held that the principle of deduction in the land value covered by the comparable sale is thus adopted in order to arrive at the market value of the acquired land. In applying the principle, it is necessary to consider all relevant facts. It is not the extent of the area covered under the acquisition which is the only relevant factor.

Thus, the Court in the instant case was of the view that deduction of development charge in the instant case should have been made while considering the said factors. However it was also stated that the aforesaid observation was made seeing the peculiar facts of the present case and not in general.

Thus by  applying  the ratio of said judgments to the facts of the case at hand and as per the stand taken by NOIDA,  it can be construed  that the  scheduled piece of land was  a costly land, being situated at the centre of development of authority and had  commercial use. On spot, the demarcation was not possible because the land was fully developed. 

Further it was observed that without acquisition, the piece of land belonging to appellant was transferred to the seventh respondent.  The acquisition was made subsequently in view of the observations made by the District Court confirming the decree of permanent injunction for the said piece of land. 

It was further opined by the Court that at the time of taking over of possession, the amount of compensation was not made and now, the appellant is running from pillar to post to receive the adequate compensation. Even after settling the dispute for payment of compensation at the circle rate of Rs. 1, 10,000/- inter-party, in the previous round of litigation, the NOIDA in its own volition neither determined the compensation nor paid to the appellant. The possession of scheduled piece of land, though taken long back in year 2004-2005, but till date, the appellant had   not been able to reap the fruits of compensation and kept litigating before courts even up to subsequent rounds, the Court remarked. 

 Thus, considering all these aspects the Court observed, deduction made to extent of 50% in by High Court in the said cannot be sustained and was set aside without touching the findings on the point of payment of solatium. It was further observed that the land was given initially in the year 2003 to seventh respondent and the acquisition was made subsequently. 

The Court noted, “The additional award was passed on January 31, 2011 after a delay of five years from the date of taking over of possession. The amount was deposited in the year 2017 by a delay of approximately 14 years. In the peculiar facts of this case, in our view, the civil right of appellant is violated in breach of Article 300-A of the Constitution of India. Such action of the NOIDA clearly amounts to constitutional tort.”

Taking note of the aforesaid and in the peculiar facts of this case, the Court opined that in addition to the statutorily paid interest, the additional amount of penal interest must be paid in place of shifting the date for determination of the amount of compensation or to determine the compensation as per 2013 Act, as demanded by the appellant. 

Therefore, in light of the above observations, the Court dismissed the appeal instituted by NOIDA and party allowed the appeal of the appellant by setting aside the judgment of the High Court directing 50% deduction towards development charges.  It was observed that seeing the peculiar facts of the present case, the respondents are directed not to make any deduction towards the development charge while computing/calculating the amount of compensation as per circle rate.