Section 11A Of Land Acquisition Act, 1894 Will Apply If Acquiring Authority Fails To Pay 80% Compensation Before Possession: SC

The Supreme Court has observed that the provisions contained in Section 11A of Land Acquisition Act, 1894 shall be applicable to cases in which the acquiring authority has not complied with the requirement of sub­section (3A) to Section 17 of Act, 1894 by tendering and paying eighty per centum of the estimated compensation before taking possession. 

Section 11A of the Land Acquisition Act, 1894 states that the Collector shall make an award under section 11 within a period of two years from the date of the publication of the declaration and if no award is made within that period, the entire proceeding for the acquisition of the land shall lapse.

The Bench of Justice S. Abdul Nazeer, Justice A.S. Bopanna and Justice V. Ramasubramanian noted that if the requirement is complied and possession is taken after tendering and paying eighty per centum, though there is need to pass an award and pay the balance compensation within a reasonable time, the rigour of Section 11A of Act, 1894 will not apply so as to render the entire proceedings for acquisition to lapse in the context of absolute vesting. 

In this case, Respondent No. 2-New Okhla Industrial Development Authority was to implement a planned Industrial layout in a district for which purpose the requisite land was to be acquired. The project was envisaged by the State of U.P. as a part of planned Industrial Development. Hence, the Government issued a Notification invoking a special power due to urgency. The notification stated that after the expiry of 15 days from the date of publication of the notification, the possession of the acquired land will be taken.

The appellant, a company claimed to be the owner of the small extent of that land. It alleged that it has not been served with the notice contemplated under Section 9(1) of the Land Acquisition Act, 1894. Hence, the Appellant filed the Writ Petition for the same which came to be dismissed.

The appeal was then heard by a Bench consisting of two Judges and was decided by the Judgment with divergent opinion. In view of the divergence of opinion between the Judges, they ordered the matter to be placed before the Chief Justice for reference to a larger Bench to resolve the conflict. Hence, CJI ordered the matter to be placed before a Bench consisting of three Judges.

Senior Advocate Sudhir Chandra appeared for the appellant whereas Senior Advocate Ravindra Kumar, appeared for Respondent No.1. Senior Advocate Ravindra Raizada appeared for Respondent No.2.

The questions before the Court was-

A. Is the requirement to tender payment of 80% of the estimated compensation as contemplated under sub­section(3A) to Section 17 of Act, 1894, mandatory to ensure absolute vesting of the notified land.

B. Whether the requirement to pass the award within the time frame contemplated under Section 11A applicable to the acquisition notified under Section 17 of Act, 1894.

The Court observed that the appellant was neither tendered nor paid 80% of the estimated compensation as required under sub­section (3A) to Section 17 before taking possession nor was an award passed and compensation paid within two years from the date of declaration under Section 6 of Act, 1894.

 The Court ordered thus –

"The provision contained in Section 11A of the Act, 1894 shall be applicable to cases in which the acquiring authority has not complied with the requirement of sub-section (3A) to Section 17 of Act, 1894 by tendering and paying eighty per centum of the estimated compensation before taking possession since possession in such cases cannot be considered to be taken in accordance with law and the vesting is not absolute."

The Court also ordered –

"If the requirement is complied and possession is taken after tendering and paying eighty per centum, though there is need to pass an award and pay the balance compensation within a reasonable time, the rigour of Section 11A will not apply……. The right of land loser in such case is to enforce passing of the award and recover the compensation"

The Court observed that in the instant case though Section 11A of Act, 1894 has become applicable, in the changed circumstance the Court molded the relief instead of holding the acquisition to have lapsed.

 The Court directed to construe a relevant date and determine the market value prevailing as on that date applying the yardstick under Act, 1894 in respect of the acquired land.

The Court also held that the date on which the fresh award is passed pursuant to the instant judgment and communicated shall be the date of cause of action for seeking enhancement of compensation if the appellant is dissatisfied with the quantum of compensation offered.

The appeal was disposed of accordingly.

Cause Title – M/s Delhi Airtech Services Pvt. Ltd. & Anr. v. State of U.P. & Anr.

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