Supreme Court lays down 7 Constitutional Tests for Land Acquisition Acquiring land without due procedure would be outside the authority of law, Supreme Court lays down 7 Constitutional tests for land acquisition

21, May 2024 | CJP Team

On May 16, the Supreme Court in a pivotal judgement laid down the 7 procedural sub-rights against the arbitrary and illegal land acquisition. A single bench led by Justice PS Narasimha in Kolkata Municipal Corporation & Anr. v. Bimal Kumar shah & Ors. (Civil Appeal No. 6466 of 2024) stressed that Article 300A which declares that “no person shall be deprived of his property save by authority of law” has been characterized both as a constitutional and also a human right, non-compliance of these will amount to violation of the right, being without the authority of law. The court pointed out that Article 300A must be in line with the overarching principles of rule of law, and must be just, fair, and reasonable.

Brief background of the case:

The Kolkata Municipal Corporation “appellant-Corporation” herein, claims to have acquired the property of Mr. Brinchi Shah in exercise of powers under Section 352 of the Kolkata Municipal Corporation Act, 1980. 

Initially, in the year 2009, an attempt was made by the appellant to forcefully enter and occupy the property belongs to Mr. Shah, Shah filed a Writ Petition No. 126 of 2009 before the Calcutta High Court seeking a restraint order against the appellant-corporation. The High Court disposed of the writ petition by an order dated 17.09.2009 direction that the appellant-Corporation not to make any construction over the Property in question and the appellant-Corporation must hold an enquiry about the encroachments. However, there was no real contest about the title in the property and the appellant-Corporation also not filed any affidavit-in-opposition.

In July 2010, Mr. Shah received information that the appellant-Corporation has deleted his name from the category of owner and had inserted its own name in the official records. Aggrieved, he approached the High Court by filing a writ petition bearing W.P. No. 981 of 2010, not only for correction of the entries but also to restrain the appellant-Corporation from interfering with his peaceful possession over the Property. The learned single judge, by an order dated 08.01.2015, the petition was disposed of restraining the appellant-Corporation from interfering with the possession of Mr. Shah and also injuncted them from giving effect to the wrongful recording of its name in the official records. The appellant was also directed to remove its men and material from the Property within two weeks from the date of the said order. The High Court finds that the appellant-Corporation could not establish its right and the title in the Property is significant.

In year 2016, Respondent No.1/Bimal Kumar Shah (the executor to the estate of Mr. Shah) filed Writ Petition No. 930 of 2016, seeking an order quashing the alleged acquisition as illegal and to restore their name as owners in the official records.

In year 2017, a bench of single judge of the High Court allowed the petition by order dated 14.09.2017 held that appellant-Corporation purported to acquire the Property under Section 352(a) of the Act when there is no power of compulsory acquisition therein. The learned single Judge therefore quashed and set-aside the alleged action of acquisition. Aggrieved, the appellant-Corporation filed appeal before the division bench of the Calcutta High Court against the order dated 14.09.2017 passed by Mr. Justice Harish Tandon in W.P. No. 930 of 2016. 

The Division Bench of High Court of Calcutta Decision in W.P. No 930 of 2016:

A division bench of Justice Soumen Sen and Justice Saugata Bhattacharyya vide order dated December 17, 2019 affirmed the order dated September 17, 2017 of the single judge and accordingly disposed of the appeals with a direction that the appellant-Corporation may initiate acquisition proceedings for the Property u/s 536 or 537 of the Act, within five months, or in the alternative, restore the name of the last recorded owner as the owner of the Property. The bench further added that “once a legal opinion has been obtained which apparently does not authorise the Municipal Corporation to acquire the property in exercise of its power under 8 Section 352(a) of the Kolkata Municipal Corporation Act, unless the owner agrees to hand over the property voluntarily or under an agreement contemplated under Section 536 of the Act, the acquiring body needs to follow the provisions of the Land Acquisition Act, 1894 for the purpose of determination of compensation”.

The Judgement of High Court can be read here:

 

The Supreme Court Decision on May 16, 2024:

The appellant-Corporation aggrieved by the decision of the division bench of High Court preferred appeal before the Supreme court vide Civil Appeal No. 6466 of 2024, contended that the single and division benches of the High Court erred in concluding that Section 537 of the Act is the only provision for acquisition. The appellant-Corporation relying on State of Kerala v. T.M. Peter (1980) 3 SCC 554, submit that for differential schemes and purposes of acquisition, different compensation structures will not violate Article 14 of the Constitution. On the same point, he also relied on the decisions of this Court in Girnar Traders (3) v. State of Maharashtra (2011) 3 SCC 1, and Bankatlal v. Special Land Acquisition Officer (2014) 15 SCC 116. Sr. Advocate Mr. Mukul Rohatgi and Mr. Huzefa Ahmadi, appeared for the respondents, submitted that the power of acquisition is only in Section 537 of the Act and that invocation of Section 352 read with Section 363 is illegal and violative of Article 300A of the Constitution. In support of their submissions, they relied on the judgment of this Court in Nagpur Improvement Trust v. Vithal Rao (1973) 1 SCC 500.

A bench of Justice PS Narasimha ruled that “Section 352 does not provide for any procedure whatsoever; we reject the contention that it contemplates the power of acquisition. We have already held that Section 352 is only intended to enable the Municipal Commissioner to decide whether a land is to be acquired for public purpose. The power of acquisition is in fact vested with the State under Section 537 and it will exercise it, in its own discretion, whenever the Municipal Commissioner makes an application to that effect. We have also agreed with the decision of the High Court that Section 363 is not a provision for compensation for compulsory acquisition. In this context, we have also held that a valid power of acquisition coupled with the provision for fair compensation by itself would not complete and exhaust the power and process of acquisition. Prescription of the necessary procedures, before depriving a person of his property is an integral part of the ‘authority of law’, under Article 300A and, Section 352 of the Act contemplates no procedure whatsoever.”

The bench fully justified the opinion of the High Court and rejected the case of appellant-Corporation acquiring land under Section 352 of the Act.

Section 352 of the Act provides: – 

“Power to acquire lands and buildings for public streets and for public parking places:– The Municipal Commissioner may, subject to the other provisions of this Act – (a) acquire any land required for the purpose of opening, widening, extending or otherwise improving any public street, square, park or garden or of making a new one, together with any building standing upon such land; (b) acquire, in relation to any land or building as aforesaid, such land with building thereon outside the regular line or the projected regular line of such public street; (c) acquire any land for the purpose of laying out or making a public parking place.”

Section 363 of the act provides: –

(1) Compensation shall be paid by the Corporation to the owner of any building or land acquired for a public street, square, park or garden under the provisions of this Chapter: Provided that any increase or decrease in the value of the remainder of the property, of which building or the land so acquired formed part, likely to accrue from the setting back to the regular line of a public street, shall be taken into consideration in determining the amount of such compensation. 

(2) If any additional land, which will be included in the premises of any person permitted or required by an order under sub-section (2) of Section 360 to set forward a building to the regular line of a public street, belongs to the Corporation, such order shall be a sufficient conveyance to the owner of such land; and the price to be paid to the Corporation by the owner for such additional land the other terms and conditions of the conveyance shall be set forth in such order. 

(3) The Corporation shall pay compensation in respect of land or building acquired under this Chapter at the following scale: (i) for land or building with annual value determined at an amount not exceeding Rs.3000 in respect of the portion acquired. [Fifteen times the amount of the annual value] (ii) for land or building with annual value determined at an amount exceeding Rs.3000 in respect of the portion acquired. [Rs.45,000 plus ten times the amount of the annual value in excess of Rs.3000}.”

The Right to Property: A net of intersection rights:

The court emphasised that under our constitutional scheme, compliance with a fair procedure of law before depriving any person of his immovable property is well entrenched. We are examining this issue in the context of Section 352 of the Act which is bereft of any procedure whatsoever before compulsorily acquiring private property. Again, assuming that Section 363 of the Act provides for compensation, compulsory acquisition will still be unconstitutional if proper procedure is not established or followed before depriving a person of their right to property. We find it compelling to clarify that a rather undue emphasis is laid on provisions of compensation to justify the power of compulsory acquisition, as if compensation by itself is the complete procedure for a valid acquisition.

The bench further added that “it is true that after the 44th Constitutional Amendment, the right to property drifted from Part III to Part XII of the Constitution, there continues to be a potent safety net against arbitrary acquisitions, hasty decision-making and unfair redressal mechanisms. Despite its spatial placement, Article 300A which declares that “no person shall be deprived of his property save by authority of law” has been characterised both as a constitutional and also a human right. To assume that constitutional protection gets constricted to the mandate of a fair compensation would be a disingenuous reading of the text and, shall we say, offensive to the egalitarian spirit of the Constitution.”

Fair compensation is not sufficient, Due Procedure must be followed

The appellant-Corporation’s counsel Mr. Jaideep Gupta has also relied on Section 363 of the Act which provides “Compensation shall be paid by the Corporation to the owner of any building or land acquired for a public street, square, park or garden under the provisions of this Chapter”. In this context, the court held that a valid power of acquisition coupled with the provision for fair compensation by itself would not complete and exhaust the power and process of acquisition. Prescription of the necessary procedures, before depriving a person of his property is an integral part of the ‘authority of law’ under Article 300A and Section 352 of the Act contemplates no procedure whatsoever. Rejecting the alternative argument of the appellant-Corporation that there is also a provision for compensation under Section 363 of the Act when land is acquired under Section 352, we have examined the constitutional position of acquisition of immovable property whereunder the mere presence of power to acquire coupled with a provision for payment of fair compensation by itself is not sufficient for a valid acquisition. Interpreting “authority of law” in Article 300A of the Constitution, the bench held that a minimum content of a constitutional right to property comprises of seven sub-rights or procedures such as the right to notice, hearing, reasons for the decision, to acquire only for public purpose, fair compensation, efficient conduct of the procedure within timelines and finally the conclusion must be followed.

The Seven procedural sub-rights must be passed before Land Acquisition: 

The Bench explained following procedural sub-rights are conferred on a landowner by Article 300A and these sub-rights can be identified, albit no-exhaustive. These are:

1. Right to Notice – A prior notice informing the bearer of the right that the State intends to deprive them of the right to property is a right in itself; a linear extension of the right to know embedded in Article 19(1)(a). The Constitution does not contemplate acquisition by ambush. The notice to acquire must be clear, cogent and meaningful. Some of the statutes reflect this right. Section 4 of the Land Acquisition Act, 1894, Section 3(1) of the Requisitioning and Acquisition of Immovable Property Act, 1952, Section 11 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, and Section 3A of the National Highways Act, 1956 are examples of such statutory incorporation of the right to notice before initiation of the land acquisition proceedings.
2. The Right to be heard – The right to a meaningful and effective prior notice of acquisition, is the right of the property-bearer to communicate his objections and concerns to the authority acquiring the property. This right to be heard against the proposed acquisition must be meaningful and not a sham. Section 5A of the Land Acquisition Act, 1894, Section 3(1) of the Requisitioning and Acquisition of Immovable Property Act, 1952, Section 15 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, and Section 3C of the National Highways Act, 1956, are some statutory embodiments of this right.
3. The Right to a reasoned decision – That the authorities have heard and considered the objections is evidenced only through a reasoned order. It is incumbent upon the authority to take an informed decision and communicate the same to the objector. Section 6 of the Land Acquisition Act, 1894, Section 3(2) of the Requisitioning and Acquisition of Immovable Property Act, 1952, Section 19 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 and Section 3D of the National Highways Act, 1956, are the statutory incorporations of this principle.
4. The Duty to acquire only for public purpose – That the acquisition must be for a public purpose is inherent and an important fetter on the discretion of the authorities to acquire. This requirement, which conditions the purpose of acquisition must stand to reason with the larger constitutional goals of a welfare state and distributive justice. Sections 4 and 6 of the Land Acquisition Act, 1894, Sections 3(1) and 7(1) of the Requisitioning and Acquisition of Immovable Property Act, 1952, Sections 2(1), 11(1),15(1)(b) and 19(1) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 and Section 3A (1) of the National Highways Act, 1956 depict the statutory incorporation of the public purpose requirement of compulsory acquisition.
5. The Right of restitution or fair compensation – A person’s right to hold and enjoy property is an integral part to the constitutional right under Article 300A. Deprivation or extinguishment of that right is permissible only upon restitution, be it in the form of monetary compensation, rehabilitation or other similar means. Compensation has always been considered to be an integral part of the process of acquisition. Section 11 of the Land Acquisition Act, 1894, Sections 8 and 9 of the Requisitioning and Acquisition of Immovable Property Act, 1952, Section 23 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, and Sections 3G and 3H of the National Highways Act, 1956 are the statutory incorporations of the right to restitute a person whose land has been compulsorily acquired.
   
6. The Right to an efficient and expeditious process – It is necessary for the administration to be efficient in concluding the process and within a reasonable time. This obligation must necessarily form part of Article 300A. Sections 5A(1), 6, 11A, and 34 of the Land Acquisition Act, 1894, Sections 6(1A) and 9 of the Requisitioning and Acquisition of Immovable Property Act, 1952, Sections 4(2), 7(4), 7(5), 11(5), 14, 15(1), 16(1), 19(2), 25, 38(1), 60(4), 64 and 80 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 and Sections 3C(1), 3D(3) and 3E(1) of the National Highways Act, 1956, prescribe for statutory frameworks for the completion of individual steps in the process of acquisition of land within stipulated timelines.
   
7. And, the Right of conclusion – The obligation to conclude and complete the process of acquisition is also part of Article 300A. ii) Section 16 of the Land Acquisition Act, 1894, Sections 4 and 5 of the Requisitioning and Acquisition of Immovable Property Act, 1952, Sections 37 and 38 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, and Sections 3D and 3E of the National Highways Act, 1956, statutorily recognise this right of the acquirer.

The judgement of the Supreme Court can be read here: 

 

Supreme Court Decision paved way against illegal demolition and arbitrary land acquisition:

The procedural sub-rights lay down by the Supreme Court would also be cover the municipalities illegal actions in acquiring land from the peaceful possession of the landowner. The court more emphatically stressed on the Right to Notice before taking any action of acquiring property/land. In recent cases of demolition notably Haldwani Mosque demolition on February 8, 2024, Nuh Demolition in Haryana on August 4, 2023, DDA Demolition in South Delhi’s Mehrauli on January 30, 2024 despite a stay order of Delhi High Court etc. There are series of illegal and arbitrary actions and land acquisitions have been done by the government authorities despite issuing any notice and information in relation to the acquisition citing either government land or encroachment. The judgement authored by Justice PS Narasimha also provides the application of these sub-rights on the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, Resettlement Act, 2013:

The primary purpose of the 1894 Act as the title suggested was ‘Land Acquisition ‘and its expedition, whereas the 2013 act is titled as ‘Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, which expands the ambit of the act to fair compensation, thorough resettlement and rehabilitation of those affected, adequate safeguards for their well-being and complete transparency in the process of land acquisition.

The Act of 2013 can be read here: 

 

[1] Constitution (Forty-Fourth Amendment) Act, 1978.

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