2011 (8) TMI 1075 - SC - Indian Laws

What was the effect of possession of land subsequent to notification issued under Section 4(1) of the Land Acquisition Act? Whether the provisions of Section 11A of the Act would apply to the acquisition under Section 17(1) read with Section 17(4) of the Act? How the market value should be determined?

Issues Involved:
1. Applicability of Section 11A to acquisition under Section 17 of the Land Acquisition Act.
2. Whether Section 17(3A) is mandatory or directory.
3. Interpretation of emergency provisions under Section 17 in light of Section 17(3A).
4. Balancing the rights of landowners with the State's power of eminent domain under the Constitution.

Issue-Wise Detailed Analysis:

1. Applicability of Section 11A to Acquisition Under Section 17:
The primary question was whether the provisions of Section 11A, which mandate that an award must be made within two years of the declaration under Section 6, apply to acquisitions under Section 17. The court held that Section 11A does not apply to acquisitions under Section 17. Once the land vests in the Government under Section 17(1), it cannot revert to the owner due to non-compliance with Section 11A. The court emphasized that the legislative intent was clear in not providing for reversion of land once vested in the Government.

2. Whether Section 17(3A) is Mandatory or Directory:
The court examined whether the requirement to tender 80% of the estimated compensation before taking possession under Section 17(3A) is mandatory. It was concluded that while the provision appears mandatory due to the use of "shall," the absence of specified consequences for non-compliance indicates that it is directory. However, the court stressed that compliance with Section 17(3A) is essential, and non-compliance should result in the payment of interest to the landowners.

3. Interpretation of Emergency Provisions Under Section 17:
The court discussed the interpretation of Section 17, which allows for the immediate taking of possession in cases of urgency. It was held that the provisions of Section 17 should be strictly construed, but within the framework of the statute. The court noted that Section 17(3A) must be read in conjunction with Section 17(1) and 17(2), and compliance with Section 17(3A) is necessary before taking possession. The court also highlighted that the provisions of Section 17(3A) are intended to balance the rights of the landowners with the State's power of eminent domain.

4. Balancing Rights Under the Constitution:
The court analyzed the constitutional implications of the Land Acquisition Act, particularly in light of Article 300A, which protects the right to property. It was noted that while the right to property is no longer a fundamental right, it remains a constitutional right. The court emphasized that the provisions of the Land Acquisition Act must be interpreted in a manner that balances the rights of the landowners with the State's power of eminent domain. The court held that the provisions of the Act are not violative of Article 14 of the Constitution, and the rights of the citizens and the interest of the State can be balanced under the Act.

Conclusions:
1. Section 11A does not apply to acquisitions under Section 17 of the Act.
2. Section 17(3A) is directory, not mandatory, but compliance is essential, and non-compliance should result in the payment of interest.
3. The provisions of Section 17 should be strictly construed, but within the statutory framework, ensuring compliance with Section 17(3A) before taking possession.
4. The right to property, while not a fundamental right, is a constitutional right, and the provisions of the Land Acquisition Act must balance the rights of landowners with the State's power of eminent domain.

Directions:
1. The Government/acquiring authority must pay interest at 15% per annum for delays in payment of 80% of the estimated compensation.
2. The Central and State Governments should issue guidelines to prevent undue harassment to landowners in urgent acquisitions under Section 17.
3. Disciplinary action should be taken against erring officials in cases of non-compliance with Section 17(3A).
4. Costs of Rs. 1,00,000/- to be paid by the State Government of Uttar Pradesh and recovered from the salaries of defaulting officials.

Separate Judgment by Ganguly, J.:
Justice Ganguly held that Section 17(3A) is mandatory and non-compliance invalidates the acquisition. He emphasized the importance of complying with Section 17(3A) to balance the rights of landowners with the State's power of eminent domain. He also highlighted the need for just, fair, and reasonable procedures in line with Article 300A of the Constitution. However, due to the development that had taken place on the acquired land, he directed that compensation be determined based on the value of the land as of the date of filing the writ petition.

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