Supreme Court Revises Land Acquisition Laws, Overrules Pune Municipal Corporation Judgment, and Extends Time for Fresh Proceedings in Delhi Land Cases

In a landmark judgment, the Supreme Court clarifies the doctrine of res judicata and merger in acquisition cases, emphasizes public interest, and issues comprehensive directions balancing landowners' rights with state development projects.

In a significant ruling delivered on May 17, 2024, the Supreme Court of India, comprising Justices Surya Kant, Dipankar Datta, and Ujjal Bhuyan, resolved a complex batch of civil appeals concerning land acquisition disputes involving the Government of the National Capital Territory (NCT) of Delhi and various landowners, including M/s BSK Realtors LLP.

The judgment addressed the long-standing conflict arising from inconsistent judicial interpretations of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 ("2013 Act"). The Court overruled the earlier precedent set by the Pune Municipal Corporation case (2014), which held that acquisition proceedings lapse if either physical possession was not taken or compensation was not paid. Instead, the Supreme Court, aligning with a subsequent Constitution Bench decision in Indore Development Authority v. Manoharlal (2020), clarified that land acquisition proceedings lapse only when both conditions exist simultaneously — non-payment of compensation and failure of the State to take physical possession.

The case arose from multiple appeals wherein landowners challenged acquisition proceedings initiated under the Land Acquisition Act, 1894 ("1894 Act"). The Government of NCT of Delhi (GNCTD) contended that the earlier High Court judgments declaring acquisitions as lapsed should be reconsidered in light of the Constitution Bench's overruling of Pune Municipal Corporation.

Key Legal Issues Addressed:

1. Res Judicata and Merger Doctrine: The Court held that the dismissal of civil appeals in the first round does not operate as res judicata against other parties in the second round when larger public interest is involved. The doctrines of merger and stare decisis are not of universal application, especially when there are conflicting judicial opinions affecting critical public infrastructure projects.

2. Suppression of Material Facts: The Court clarified that suppression must be of material facts that would affect the merits of the case. After reviewing allegations of nondisclosure by parties, the Court found no sufficient grounds to dismiss the appeals solely on this basis.

3. Public Interest and Article 142 Power: Recognizing the vital public interest in ongoing infrastructure projects like metros, schools, and hospitals that rely on acquired lands, the Court invoked its extraordinary powers under Article 142 of the Constitution to ensure consistent and equitable resolutions. It extended the deadline for fresh acquisition proceedings by one year from August 1, 2024, allowing the State to complete acquisition with due compensation.

4. Subsequent Purchasers and Fraud Allegations: The Court reaffirmed that subsequent purchasers who acquired land after the issuance of acquisition notification under Section 4(1) of the 1894 Act have no locus to challenge acquisition or claim lapse. Transfer of land after notification without prior permission is void and amounts to fraud. Cases involving such allegations were remanded to the High Court for detailed fact-finding.

5. Categorization and Directions for Multiple Cases: The Court categorized the cases into several groups based on prior litigation outcomes and issued tailored directions. For Groups A and B.1, fresh acquisition proceedings must be initiated within the extended timeline with specific relaxations on procedural compliances under the 2013 Act, owing to the urban/semi-urban nature of the lands. For Groups C.2 and C.3, acquisition proceedings were upheld as not lapsed, directing State authorities to take possession and continue development activities.

6. Remand to High Court for Complex Disputes : Cases involving complex factual disputes regarding title, subsequent sales, and ownership were remanded to the Delhi High Court for adjudication through a dedicated bench, ensuring due process and factual inquiry.

Impact and Significance:

This judgment restores legal clarity on land acquisition laws and provides a pragmatic framework balancing the rights of landowners with the State’s developmental imperatives. It prevents the undoing of public infrastructure projects that could have resulted from inconsistent judicial rulings. The Court’s flexible approach towards res judicata and merger doctrines in matters of public interest marks a progressive judicial stance.

The ruling also imposes stringent scrutiny on alleged fraudulent transactions post acquisition notification, reinforcing statutory protections against unauthorized land transfers.

The Supreme Court’s directions to dispense with certain procedural requirements of the 2013 Act in specified cases aim to facilitate expeditious resolution, ensuring that neither the State nor landowners suffer undue prejudice.

The judgment emphasizes that while the rule of law and consistency are fundamental, exceptions must be made to serve the larger public good, underscoring the principle "salus populi suprema lex esto" — the welfare of the people shall be the supreme law.

Statutory provisions

Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 - Section 24(2), Sections 4(1), 13, 14, 15, 16-20, 21, 25, 28, 29, 30; Land Acquisition Act, 1894 - Sections 4(1), 6, 11(4), 16, 18, 31, 34, 48; Delhi Lands (Restrictions on Transfers) Act, 1972 - Sections 3, 4, 5; Supreme Court Rules, 2013 - Order 21 Rule 3(2); Constitution of India - Article 142.

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This news report summarizes the Supreme Court’s comprehensive judgment in Government of NCT of Delhi v. M/s BSK Realtors LLP and others, highlighting the legal principles, factual background, and judicial reasoning underlying this landmark decision on land acquisition disputes.

Government of NCT of Delhi v. M/s BSK Realtors LLP, (SC) : Law Finder Doc Id # 2587139