In Acquisition Invoking Urgency Clause, Vesting Of Land In Government Takes Place Only When 80% Of Estimated Compensation Is Paid And Possession Is Taken Over: Bombay HC

The Bombay High Court held that, under the Land Acquisition Act, 1894 (LA Act), when the urgency clause is invoked during acquisition, the vesting of land only takes place when 80% of the estimated compensation is paid and possession of land is taken over.

The Court allowed Writ Petitions from landowners challenging the Deputy Collector's award for the Mumbai Trans Harbour Link (MTHL) Project. The Court directed the State for a fresh consideration for the award.

“Urgency clause to become operative (i) payment of 80% of the estimated compensation of the said land has to be paid to the persons interested in the said land; (ii) taking over of possession comes thereafter; and (iii) vesting of the land in the Government then takes place. It is true that if the urgency clause is invoked and complied with then there is no question of any lapsing because the land already vests in the Government, but the vesting takes place only when the 80% of the estimated compensation is paid and thereafter possession of the land is taken over”, the Bench of Justice BP Colabawalla and Justice MM Sathaye observed.

Advocate Rahul Thakur appeared for the Petitioner, Additional Government Pleader MS Bane appeared for the State, Advocate Ashutosh Kulkarni appeared for the City and Industrial Development Corporation (CIDCO), Advocate Akshay Shinde appeared for the Mumbai Metropolitan Region Development Authority (MMRDA) and Advocate Deepak Saxena appeared for the Applicant.

A set of Writ Petitions were filed challenging the Award dated, issued by the DC-LA, about the acquisition of lands owned by the Petitioners. The Petitioners' lands in Jasai Village, Tal-Panvel, Dist-Raigad, were slated for acquisition for the MTHL Sea Link Project by CIDCO under the New Bombay Project. CIDCO sought to acquire 15.79.10 Hectares for the Sewri-Nhava Road Project, obtaining 8.66.00 Hectares through agreements. The remaining 7.13 Hectares underwent acquisition proceedings under the Land Acquisition Act, 1894 (LA Act). A Section 4 notification on 2nd July 2009 and subsequent individual notices under Section 4(1) of the 1894 Act were served to the Petitioners.

In this case, the urgency clause under Section 17 of the LA Act was invoked, bypassing an inquiry under Section 5A. A Section 6 declaration on 19th June 2012 had a final publication date of 22nd December 2012. However, the challenged Award was issued on 22nd July 2015, surpassing the statutory timeline.

The Court noted that before the lapse of the 2 years for Award under Section 11A of the LA Act, the 2013 Act came into force on 1st January 2014. As per Section 24(1)(a) of the 2013 Act, if no Award is passed, compensation is determined under the new Act. Further, if the Award isn't passed by 1st January 2014, Section 25 of the 2013 Act mandates its completion within one year.

The Court reiterated the Supreme Court’s Judgment, in the case of the Executive Engineer, Goshikhurd Project Ambadi, Bhandara, Maharashtra Vidharbha Irrigation Development Corporation v Mahesh & Ors [(2022) 2 SCC 772], and clarified that the 1-year period applies to Awards not published by the time the 2013 Act came into force. However, considering the stay granted by the Aurangabad Bench on the Maharashtra Government's notifications under the 1st Schedule of the 2013 Act, the Supreme Court excluded the 79-day stay period. It held that the Awards should have been passed by 20th March 2015, and failure to do so would lead to the lapsing of acquisition proceedings.

Furthermore, the Court noted that the Award was only issued on 22nd April 2015. Consequently, even after accounting for the exclusion of the stay period, the acquisition proceedings specific to the Petitioners’ lands have unequivocally lapsed as they exceeded the one-year limit from 1st January 2014.

The Court observed that per Section 17(1) in instances of urgency, upon government direction, the Collector could, after the expiration of 15 days from the publication of the notice in Section 9(1) of the LA Act, take possession of required land for public purposes, even without an Award. The land would then unequivocally vest in the Government, free from any encumbrances. “However, before the vesting takes place, the conditions of Section 17(3-A) have to be complied with and which stipulate that before taking possession of any land under Section 17(1) or 17(2), the Collector shall, without prejudice to the provisions of Section 17(3), tender payment of 80% of the compensation for such land as estimated by him to the persons interested and pay it to them, unless prevented by one or more of the contingencies mentioned in Section 31(2)”, the Bench added.

The Bench noted that a comprehensive interpretation of Section 17 revealed that for the urgency clause to be effective, payment of 80% of the estimated compensation had to precede taking possession, followed by the vesting of the land in the Government. The absence of any of these sequential steps rendered the urgency clause provision ineffective. Although compliance with the urgency clause prevented lapsing since the land was vested in the Government, the actual vesting occurred only after the payment of 80% of the estimated compensation and the subsequent takeover of possession.

Additionally, the Court reiterated that if the urgency clause under Section 17 is invoked and adhered to, Section 11-A of the LA Act, which sets the period for Award issuance, would not take effect. In such instances, the land loser's right would be to compel the Government to issue an Award, even if it exceeds the stipulated 2-year period under Section 11-A of the LA Act.

In the circumstances of the case, despite the invocation of the urgency clause during the issuance of the Section 4 notification, no compensation, whether estimated or otherwise, was disbursed to the Petitioners, and possession of the lands was not taken until the initiation of the aforementioned Petitions. The Court rejected the contention that the State's invocation of the urgency clause under Section 17 of the 1894 Act, on its own merits, precludes the lapse of acquisition proceedings.

In evaluating the case on its merits, the Bench observed that there has been non-compliance with Section 17(3-A) of the LA Act. Consequently, the land does not vest absolutely with the State, and if the Award is not passed within the stipulated timeframe as mandated by law, the acquisition will lapse.

Regarding the argument of delay, the Court observed that there was no undue delay in filing the Writ Petitions. The Award, issued on 22nd April 2015, prompted the filing of these Petitions from 31st January 2017 to 27th June 2019. The absence of inordinate delay and the breach of statutory provisions in both the LA Act and the 2013 Act provides no grounds for rejecting the Writ Petitions.

In conclusion, the Court determined that the impugned Award was not issued within the statutory period as mandated by law, specifically, not by 20th March 2015. Consequently, the acquisition proceedings solely concerning the Petitioners’ lands have lapsed due to non-compliance with the statutory timeframe.

The Court held that while the acquisition proceedings are deemed lapsed, possession of the acquired lands will not revert to the Petitioners. Instead, they will be entitled to compensation, determined by the State through a fresh Award following the procedures outlined in the 2013 Act.

Consequently, the Court allowed the Writ Petition.

Cause Title: Sandesh Vitthal Thakur & Ors. v The Deputy Collector (Land Acquisition) Raigad & Ors. (2024:BHC-AS:2045-DB)

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