Read Time: 12 minutes

Synopsis

The Punjab and Haryana High Court recently held that the statutory mandate enshrined under Section 43 of the Land Acquisition Act (Act) supersedes the general mandate provided under Sections 39-42. Therefore the general mandate would not be applicable where a Government is bound by an agreement to provide land for companies, court said.

“However, irrespective of the above, yet in the wake of the provisions embodied in Section 43 of the Act of 1894, the mandate enclosed in Sections 39 to 42 of the Act of 1894, does become ousted or excluded, predominantly in the wake of an agreement arrived at inter se the developer and the government. Resultantly, thereby the said provisions become ineffective, and/or therebys non compliance, if any, to the said provisions, becomes completely inconsequential”, the bench of Justice Sureshwar Thakur and Justice Lalit Batra held. 

The case originated from a notification issued by the State Government concerning the acquisition of 22.96 acres of land situated in villages Bhagomajra, Raipur Kalan, Sambhalki, and Manikmajra for a large-scale project endorsed by authorities. The stated objective was “at the expense of the company for a public purpose, the planned harmonious and compact urban development of the area”. 

The petitioners, represented by Advocates Raina S. Thaku and Ashok Kumar Khubbar, voiced their objections under Section 5-A before the Land Acquisition Collector, disputing the acquisition of their properties within one month of the notification's issuance.

Advocates Thaku and Khubbar argued that the challenged notifications should be invalidated because the prescribed procedures outlined in Chapter VII of the Act and The Land Acquisition (Companies) Rules, 1963 (Rules) were not followed. They contended that according to Section 44-B of Part-VII of the Act, land could only be acquired for a private company for purposes specified in clause (a) of sub-section (1) of Section 40.

Furthermore, the petitioners asserted that the State Government failed to establish a Land Acquisition Committee as required by Rule 3 of the Rules, nor did it align the public purpose with the relevant provisions. Therefore, they argued that the acquiring authority had blatantly violated the statutory mandate outlined in the aforementioned provisions, thereby rendering the acquisition flawed and/or invalid for the concerned public/private company.

As a result, they argued that if the acquisition of the subject lands was deemed necessary, it should be conducted following the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, And Resettlement Act, 2013 (Act, 2013).

Senior Deputy Attorney General Maninder Singh, representing the state, stated that the Mega Housing Project of the company was approved by the High Empowered Committee under the Chairmanship of the Chief Minister, Punjab, in meetings held in August 2005 and January 2006.

Subsequently, Sr DAG Singh highlighted that a letter of intent was issued by the Nodal Agency for Mega Projects in the housing sector in favor of the company. The Mega Housing Project was approved by the Punjab Government under the Industrial Policy, 2003, which was extended to housing projects via a notification issued in April 2005 by the Government of Punjab, Department of Industries and Commerce. Subsequently, the State Government issued a notification under Section 4 of the 1894 Act to acquire the appropriate lands for the aforementioned public purpose.

Sr DAG Singh submitted that since the acquisition was carried out by the State Government as per the state policy, the subject acquisition must be regarded as being for a public purpose. 

The court noted that the main issue for consideration was; ‘Whether, in terms of the agreement entered into inter se the government and the private respondent-developer concerned, thus the provisions carried in Section 43 of the Act of 1894, provisions whereof becomes extracted hereinafter, thus relax and dilutes, rather the rigor of the statutory mandates, as respectively carried in Sections 39 to 42 of the Act of 1894’.

The court noted that there was evidently an agreement made between the government and the company. Therefore, the court held that the provisions of Section 43 of the Act rendered the provisions in Sections 39 to 42 of the same Act inapplicable. Consequently, any lack of compliance by the acquiring authority with the statutory requirement in Section 40 of the 1894 Act was also deemed irrelevant.

“The primary reason for holding so is banked, upon the factum that there is evidently an agreement (Annexure R-1/5) entered into inter se the government and respondent No.4. Therefore, when in the wake of the said agreement, thus the provisions of Section 43 of the Act of 1894, make inapplicable the provisions as engrafted in Sections 39 to 42 of the Act of 1894”, the court added. 

Furthermore, the bench observed that the Mega Housing Project of the company was approved by the High Powered Committee chaired by the Chief Minister of Punjab, and with the issuance of a valid letter of intent. “Furthermore, with the issuance of a valid letter of intent vis-a-vis respondent No.4, thereby the launching of acquisition proceedings for a public purpose rather through the aegis of co-respondent No.4, rather does not acquire any vice of any vitiation”, the bench opined.

However, the bench noted that since no award was granted in this case, the question arose whether the compensation should be determined under the 1894 Act or the 2013 Act. Therefore, the bench reiterated, “it becomes expostulated that when the award under the Act of 1894, became precluded to be so rendered on account of pendency of any proceedings, and/or any interim orders becoming passed by this Court, thereby the non-rendition of an award under the Act of 1894, thus is to be condoned”. 

Accordingly, the court held that an award must be passed following the 1894 Act, and the concerned Collector should pronounce the award within 2 months from the date of the order. 

Advocate for Petitioners: Advocates Ashok Kumar Khubbar and Raina S. Thakur

Advocate for Respondents: Senior Deputy Solicitor General Maninder Singh with Advocates Sidharth Batra, Abhinav Sood, and Achintaya Soni.

Case Title: Gurdev Singh v State of Punjab and Daljit Singh v State of Punjab (2024:PHHC:050410-DB, 2024:PHHC:050590-DB)