SC Allows Land Acquisition In Yamuna Expressway Industrial Development Authority On Grounds Of General Public Interest

Shri C.A. Sundaram, Shri C.U. Singh, and Senior Counsel Shri Maninder Singh appeared on behalf of the Appellant. AAG Shri Vinod Diwakar appeared on behalf of the State of Uttar Pradesh. Shri Rakesh U. Upadhyay and Dr. Surat Singh appeared on behalf of the farmers whose lands were acquired. Shri Nakul Dewan, Shri Sunil Gupta, Shri Ravindra Srivastava, and Senior Counsel Shri Sanjiv Sen appeared on behalf of the original allottees of land before the Apex Court.

In this case, a vast area of land was acquired by the State of Uttar Pradesh for public purposes, i.e., for the benefit of Yamuna Expressway Industrial Development Authority (Appellant). After the land was acquired, the Appellant invited applications for the allotment of plots of land in the area development by it. In response to the notice inviting applications for such allotment, various allottees including Respondent No. 1 applied and were allotted plots measuring different sizes.

Respondent No. 1 was informed by a letter than a plot of 50 acres has been reserved for it, and a letter of allotment was also issued. It was stated that the land was already in possession of the Appellant.

A lease deed came to be executed in favour of Respondent No.1 for a period of 90 years. The Appellant came out with a policy and gave an option to Respondent No. 1 to deposit the entire premium amount in lump sum as opposed to in installments, at a rebated amount. Respondent No. 1 agreed to the policy and in accordance with the same, a lump-sum amount was worked out by the Appellant and paid by Respondent No. 1.

The State of Uttar Pradesh had also made large-scale acquisition of lands for the benefit of NOIDA and Greater NOIDA.

A number of Writ Petitions came to be filed by farmers challenging the acquisition on various grounds before the Allahabad High Court. The main ground of challenge was that there was no urgency for acquiring the land and as such, invoking Section 17 of the Land Acquisition Act, 1894 was not warranted. It was contended that on account of invoking of Section 17 of the Act, a valuable right available to the Petitioners under Section 5A of the Act was taken away.

The High Court opined that the urgency clause should not have been invoked and the farmers were unlawfully denied the benefit of Section 5A of the Act. However, the Court took note of the fact that the land was already developed and third-party rights had accrued in it, and therefore considered it appropriate not to disturb the acquisition. To balance the equities, the Court directed payment of additional compensation plus some other benefits to certain class of farmers.

Since the farmers whose lands were acquired for the benefit of NOIDA and Greater NOIDA were being paid additional compensation, the farmers whose land was acquired by YEIDA also demanded the additional compensation. Eventually, the Government consented to pay the additional compensation to them, while also clarifying that the Government would not bear the burden of the additional amount.

Therefore, additional demand notices were issued to the various allottees by way of GO and a Resolution of the Board of YEIDA, including Respondent No. 1, demanding additional premium.

Aggrieved, Respondent No. 1 and other affected allottees filed Writ Petitions before the Allahabad High Court. The High Court allowed the Petitions on the grounds that the judgment in the the High Court Judgment in case of NOIDA land acquisition was not a judgment in rem and could not have been applied for YEIDA land acquisition. Further, the Court also held that that the said G.O. and Resolution were violative of provisions of the Act.

Aggrieved, an Appeal before the Supreme Court by way of Special Leave was filed on behalf of YEIDA, State of Uttar Pradesh and farmers whose lands were acquired.

The Supreme Court observed that the doctrine of promissory estoppel cannot be invoked in the abstract and the Courts are bound to consider all aspects including the results sought to be achieved and the public good at large. Applying the principle to the present case, the Supreme Court held that the policy decision of the State Government was rational and founded on ground realities, since the GO and Resolution was passed in the interest of the large section of farmers and the allottees as well.

Further, the Supreme Court opined that the High Court was not right in interfering with the policy decision of the State Government. To that end, it opined that "It is trite law that an interference with the policy decision would not be warranted unless it is found that the policy decision is palpably arbitrary, mala fide, irrational or violative of the statutory provisions."

Relying on the case of APM Terminals B.V. vs. Union of India and another, the Court held that a change in policy by the Government can have an overriding effect over private treaties between the Government and private party if the same was in the general public interest.

The Supreme Court also noted that the Respondent side indulged in the conduct of approbate and reprobate. In that context, the Court pointed out that "When their projects were stalled on account of the farmers' agitation, it is they who approached the State Authorities for finding out a solution. When the State Government responded to their representations and came up with a policy which was equitable and in the interest of both, the farmers and the allottees and when the said policy paved the way for development, when called upon to pay the additional compensation, the respondents­allottees somersaulted and challenged the very same policy before the High Court, which benefitted them."

Furthermore, the Court also noted that as far as individual residential plot owners were concerned, more than 98% of the plot owners did not have any objection to the payment of the additional compensation.

Therefore, opining that the State Government had conducted wide range of deliberations with all stakeholders including farmers, allottees and YEIDA before formulating the policy decision, the Supreme Court held that the High Court had erred in holding that the Government policy decision was arbitrary and unfair towards allottees. To that end, the Supreme Court opined that the policy decision was in the interest of the larger section of farmers and to some extent, the interest of the allottees. Thus, the High Court Judgment was set aside and the Appeals were allowed.