Supreme Court ruling set to ease govt land acquisition process

NEW DELHI: Frowning at vexatious litigation relating to land acquisition, which delays projects for decades, Supreme Court Thursday ruled that when a govt acquires land for public purposes using its sovereign powers, it cannot be frustrated by creation of third-party rights after the acquisition.

A bench of CJI Sanjiv Khanna and Justice Sanjay Kumar said even a public body for whom an acquisition was done can't give the land to someone through a private agreement as only govt has the power to withdraw acquisition for the entire land, or a portion of it.

Litigation relating to acquired land, mainly because of creation of third-party rights, has been a key factor for delay in execution of many projects, especially national highways.

This ruling may help ease the impediments caused by post-acquisition litigation.

The case that warranted the ruling pertained to acquisition of 33 acres abutting Narela-Bawana Road to enable Delhi Agricultural Marketing Board to establish its grain market. The acquisition notification was issued in Oct 30, 1963 and the award determining compensation issued on Jan 10, 1986. When a woman claimed ownership over a portion of the land, the Board chairman surreptitiously entered into a private agreement with her and agreed to release half of the claimed land to her while permitting her to claim compensation for the other half.

SC: Validating bid to nullify state’s land buy nothing short of permitting fraud

Writing the judgment, Justice Kumar said the flow of events turned curiouser and curiouser as in 'Alice in Wonderland'. After the chairman's retirement, the Board disputed the agreement. But Delhi high court allowed the woman's plea for arbitration of the dispute with the Board relating to the acquired land. The arbitrator appointed by the HC ruled in favour of the woman and said the return of the land was valid.

"When the state uses its sovereign power of eminent domain and acquires land for a public purpose, such an exercise cannot be set at naught by the beneficiary of such acquisition, the Board, by entering into a private agreement shortly after the acquisition so as to reverse the usage of the power of eminent domain by the state," Justice Kumar said. "Validating this dubious enterprise by a statutory beneficiary of a compulsory acquisition would be nothing short of permitting a fraud on the exercise of such sovereign power by the state," he added.

"Given the further fact that the only objective of the said agreement was to thwart the compulsory acquisition of the subject land by returning a portion thereof to Bhagwan Devi, the agreement was patently opposed to all tenets of law," the bench said while quashing the orders of the HC and the arbitral award.