Public at large has already acquired interest in infrastructures: Apex Court refuses to mechanically apply doctrine of merger, says transfer of land after issuance of Notification u/s 4(1) of Land Acquisition Act, 1894, is void
Justices Surya Kant, Dipankar Datta & Ujjal Bhuyan [17-05-2024]

Read Order: GOVERNMENT OF NCT OF DELHI & ANR v. M/S BSK REALTORS LLP & ANR [SC- CIVIL APPEAL NO. 6604/2024]

Tulip Kanth

New Delhi, May 30, 2024: While observing that after the Notification under section 4(1) of the Land Acquisition Act, 1894 is published, any encumbrance created by the owner does not bind the State, the Supreme Court has disposed of six groups of appeals filed by landowners, authorities & the Delhi Govt. pertaining to the acquisition of several parcels of lands for essential public projects such as hospitals, schools, and expansion of metro.

The Civil Appeal, in this case, arose out of the Writ Petition instituted before the High Court of Delhi by the first respondent, M/s BSK Realtors LLP. Land acquisition proceedings had been initiated under the Land Acquisition Act, 1894 to acquire several parcels of lands. Land belonging to M/s BSK Realtors in Chattarpur village also formed part of the proceedings. The High Court allowed the writ petition and relied on the decision in Pune Municipal Corporation and another v. Harakchand Misirimal Solanki and others [LQ/SC/2014/83]. It was held in Pune Municipal Corporation (supra) that if any one of the two ingredients of section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 was attracted, i.e., either the physical possession of the land was not taken or the compensation was not paid, as the case may be, the acquisition proceedings under challenge would be deemed to have lapsed. 

As a matter of fact, the High Court found all the ingredients of section 24(2) of the 2013 Act as interpreted by the Supreme Court to be satisfied despite an Award of 1987 and hence declared the acquisition proceedings to have lapsed. Aggrieved thereby, the beneficiary of the acquisition proceedings - Delhi Development Authority (second respondent) carried such judgment and order in appeal praying for it to be set aside. 

The Division Bench dismissed the Civil Appeal. DDA was granted extension by a period of one year to avail the liberty of initiating acquisition proceedings afresh under section 24(2) of the 2013 Act. This marked the culmination of the first round of litigation. However, the decision in Pune Municipal Corporation (supra) was overturned by a Constitution Bench in Indore Development Authority v. Manoharlal and others [5-Judge, lapse] [LQ/SC/2020/356 ;] holding that land acquisition proceedings lapse only when the twin conditions are met, i.e., non-payment of compensation to the landowners together with failure of the State to take physical possession of the acquired lands. Leveraging this, the Government of NCT of Delhi (first appellant) (GNCTD) approached this Court through a SLP. This SLP was referred to a Bench of three Judges by a Bench of two Judges vide order dated July 21, 2022. 

The 3-Judge Bench of Justice Surya Kant, Justice Dipankar Datta & Justice Ujjal Bhuyan reiterated that the fact suppressed must be material in the sense that it would have an effect on the merits of the case. The concept of suppression or non-disclosure of facts transcends mere concealment; it necessitates the deliberate withholding of material facts—those of such critical import that their absence would render any decision unjust. 

The Bench was of the opinion that Pune Municipal Corporation (supra) loses its precedential value, having been recalled, although the said decision would be binding inter partes. It was also opined that the concept of public interest need not be viewed narrowly only on the yardstick of loss to public exchequer and that these are the cases where public at large has acquired interest in the public infrastructures already complete or in process of completion. 

It was also reaffirmed that after the Notification under section 4(1) of the 1894 Act is published, any encumbrance created by the owner does not bind the State. In such a scenario, a bona fide purchaser of land for value does not acquire any right, title or interest in the land, and he is only entitled to receive compensation if not objected to by the landowner/transferor. Therefore, transfer of land in respect of which acquisition proceedings had been initiated, after issuance of Notification under section 4(1) of the 1894 Act, is void and a subsequent purchaser cannot challenge the validity of the notification or the irregularity in taking possession of the land. “The structure of the 1972 Act clearly indicates that any subsequent sale of the specified land without prior permission from the competent authority is not allowed, and if such sale is done through concealment, it amounts to fraud”, the Bench said.

It was also observed that the landowners and affected parties are under no obligation to either confirm or deny the allegations levelled against them. Engaging in a factual inquiry at such an advanced stage of the legal process, especially without providing adequate opportunities to all parties, may not be fair, the Bench held.

It was also observed that while balancing the interest of the public exchequer against that of individuals, there are many other interests at stake, and it might not be possible to undo the acquisitions without causing significant cascading harms and losses to such other interests. Since development projects have either begun or most of the acquired lands have already been deployed for essential public projects such as hospitals, schools, expansion of metro, etc., the effect of non-condonation of delay would go beyond mere financial loss to the exchequer and would extend to the public at large.

For cases falling under Groups A(M.A.s filed by the appellants-authorities primarily pleading change in law and seeking recall of the judgments) and B.1 (cases where Civil Appeals were dismissed in the first round, and now an SLP was pending) , the Bench observed that the time limit for initiation of fresh acquisition proceedings in terms of the provisions contained in section 24(2) of the 2013 Act is extended by a year starting from August 1, 2024 whereupon compensation to the affected landowners may be paid in accordance with law, failing which consequences, also as per law, shall follow. 

The SLPs under GROUP B.2(civil Appeals of the appellants- authorities) have been rendered infructuous as the appeals carried by the appellant-authorities had already been allowed by this Court. While four of the cases in Group D.1 had been filed by the landowners seeking relief different from the relief claimed in the appeals filed by the appellants, in one case the DDA was before the Top Court by way of an M.A. These cases have been asked to be listed separately in the week commencing July 22, 2024. 

The Bench concluded the matter by observing, “ Before parting, we deem it appropriate to provide a cautionary note that the limited fact-finding conducted by this Court may not be entirely accurate due to the complex nature of cases involving subsequent sale transactions, earlier rounds of litigation, land titles, and status of compensation and/or possession. We accordingly grant liberty to the parties to approach the High Court if any disputes arise in future or if further clarification is required, which will decide these cases based on the principles outlined above, taking into account the facts and, if necessary, the merits of the case.”