Land Acquisition: Appellate Courts Must Balance Interests Of Acquiring Authorities, Landowners, Says SC

The Supreme Court recently observed that while staying the execution of an award passed by the reference court, the appellate court must balance the interests of the acquiring authority and landowners by ensuring that the decretal amount remains secured.

The Bench of Justices Dipankar Datta and Sheel Nagu said courts can direct the deposit of the entire enhanced compensation, while regulating the release of a portion to claimants, subject to the final outcome of the appeals.

Dealing with a batch of pleas filed by the Meerut Development Authority challenging interim orders of the Allahabad High Court in appeals arising from land acquisition proceedings under the Shatabdi Nagar Housing Scheme, Court directed the Authority to deposit the entire enhanced compensation awarded to landowners in the High Court registry in pending land acquisition appeals, while permitting the release of only 8.33% of the amount to the landowners.

The petitions arose from proceedings for acquisition of lands dating back to 1987. The Special Land Acquisition Officer, Meerut, through an award dated February 22, 1990, determined compensation at Rs 20 and Rs 27 per square yard for the acquired lands.

Dissatisfied with the compensation, the landowners sought references. On March 30, 2024, the Presiding Officer of the Land Acquisition, Rehabilitation and Resettlement Authority, Meerut, enhanced the compensation to Rs 690 and Rs 720 per square yard for the respective villages. Different amounts were awarded to individual landowners.

The Meerut Development Authority challenged the reference court's award before the Allahabad High Court through first appeals under Section 54 of the Land Acquisition Act, 1894.

During the pendency of the appeals, the high court stayed the implementation of the award on the condition that the Authority deposit 50% of the enhanced compensation in cash and furnish security for the remaining 50%.

The high court also permitted the landowners to withdraw the entire amount deposited in cash, with the balance being subject to the final outcome of the appeals.

The Supreme Court noted that a coordinate bench, through an order dated April 24, 2026, had adopted a different approach in a similar matter. Out of approximately Rs 6 crore in enhanced compensation, it had permitted the release of only Rs 50 lakh to the landowners, subject to certain conditions. This represented approximately 8.33% of the enhanced amount.

Considering that the appeals were already pending before the high court, Court said there was no useful purpose in keeping the present petitions pending. It accordingly directed the Meerut Development Authority to deposit the entire enhanced compensation awarded to the respondents within four weeks.

Court further directed the Registrar General of the high court to set apart 8.33% of the enhanced compensation awarded to each landowner and remit that amount to them in accordance with law.

The remaining amount must be invested in separate interest-bearing fixed deposit accounts with a nationalised bank on an auto-renewal basis, subject to further orders passed by the high court in the pending appeals.

It clarified that the release and receipt of the 8.33% amount would be without prejudice to the rights and contentions of the parties in the appeals. If the first appeals succeed, the respective landowners would have to return the amounts released to them to the Authority.

Court also expressed concern over the delay in hearing the first appeals, noting that the acquisition proceedings had originated in 1987.

"We cannot turn a blind eye to the pace at which the pending first appeals are being dealt with in the High Court. As noted, the acquisition proceedings in the present case date back to the year 1987. We note with a sense of regret that, despite a specific request made in the said order to ensure hearing of the appeals on a priority basis, the High Court could not take up the same for hearing," the Bench observed.

While acknowledging the heavy workload of high court Benches, Court said that once a request is made to expedite a matter, the roster bench is expected to make a sincere effort to ensure an early decision.

"Yet, once a request is made, it is expected of the roster bench to make a sincere endeavour to expedite its decision on the appeals. Be that as it may, we say no more in this behalf," it said.

Court once again requested the high court to accord priority to the appeals, considering the unusually large enhancement in compensation. It noted that the award imposed a substantial financial liability on the Authority while leaving the landowners uncertain about the compensation they would ultimately receive.

The Bench said it would be appropriate for the high court to hear the batch of appeals relating to the Shatabdi Nagar Housing Scheme on priority and decide them as early as possible, preferably within six months from the date of communication of its order, subject to its convenience.

It also granted liberty to the landowners to seek the release of any further amount that the high court considers appropriate if, for valid reasons, the appeals are not decided within six months.

Finally, Court directed its Registry to communicate a copy of the order to the Registrar General of the Allahabad High Court for placing it before the Chief Justice for information and, if necessary, issuance of administrative directions to ensure compliance.

Case Title: Meerut Development Authority Vs Parmeshwar Dayal & Anr

Bench: Justices Dipankar Datta and Sheel Nagu 

Date of Judgment: October 08, 2026