According to the Supreme Court’s bench of Justices MR Shah and MM Sundresh, “to continue with the interim purchase for number of years would be arbitrary and may be argued to be violating the freedom to utilise the property protected under Article 300A of the Indian Constitution.” Even continuing the temporary purchase for a longer length of time would be inappropriate since it would violate the landowners’ rights to deal with and/or use their property. The principal question that arises, on an examination of the law relating to land acquisitions, is related to the quantum of compensation that is to be paid to the owner of the land whose land is being acquired be it for temporary basis or permanent. In this analysis, I will be highlighting the evolution of the concept of compensation with respect to land acquisition.
Factual Background –
The appellants, who were also the original writ petitioners and the landowners, had filed a civil appeal with the Supreme Court after being dissatisfied with the High Court of Gujarat’s decision to reject their writ petition request to stop temporary acquisition proceedings. The bench issued the decision in that case. Since 1996, Oil and Natural Gas Corporation Ltd. (ONGC) has temporarily acquired the property that was the subject of the proceedings in order to conduct oil exploration. The appellant No. 1 without a doubt acquired this land in 2005 through a recorded sale transaction. The disputed property is in Ahmedabad, where prices for similar properties have multiplied and even the adjacent fields have undergone development. The appellants claim that they are paying temporary acquisition rent at a rate of Rs. 24 per square metre per year.
In their appearance before the High Court, the respondents once more argued that the procedure of permanently acquiring the subject land had already received consent from the relevant body.
Before the High Court, an official from ONGC stated that the purchase processes will be finished in a year. The ONGC also entered into an agreement that was recorded. By relying on the undertaking, the High Court denied the request to halt the temporary acquisition proceedings and increased rent from Rs. 24 per square metre per year to Rs. 30 per square metre per year in the decision and order.
Court’s Observations –
The court emphasised that under the Land Acquisition Act of 1894, if the land is kept under temporary acquisition for an extended period of time, the meaning and purpose of the temporary acquisition would be lost. It will be impossible to sustain temporary acquisition for 20 to 25 years. It is undeniable that the landowners may not be able to utilise the land, crop it, or otherwise interact with it in any way once it has been temporarily acquired and is being used by the ONGC for oil exploration.
In addition, the court cited Article 300A of the Indian Constitution, which states that continuing with the temporary purchase for a certain number of years would be arbitrary and might be considered to violate the right to utilise the property protected by Article 300A of the Indian Constitution. Even continuing the temporary purchase for a longer length of time would be inappropriate since it would violate the landowners’ rights to deal with and/or use their property.
Analysis –
While discussing the issues, the bench although notices the beneath rate of rent as compensation, they refuse to discuss it further and direct to follow the High Court’s order. The concept of compensation has been a contentious issue since independence. In The State of West Bengal v. Bela Banerjee, a West Bengal statute that aimed to compensate the owners based on the market value of their property at a rate of remote historical point in time gave rise for the first time to the dilemma of how to interpret the compensation provided by the Constitution. The SC ruled that the compensation must be “a just equal of what the owner has been deprived of,” rejecting the state’s socialist arguments.
The Nehru administration revised the Constitution to make it clear that no rule governing how compensation was to be granted “shall be brought in question in any court on the pretext that the compensation under that law is not appropriate” in an effort to mitigate the impact of the Bela Banerjee case. This in turn led to a series of conflicting rulings and another constitutional amendment regarding compensation. It resulted in the change from the unequivocal “just equivalent” in the Bela Banerjee case to a flimsy acknowledgment that the amount need not be equivalent as long as it is “not illusory” in the Kesavandanda Bharati case of 1973. Later in 1978, 44th amendment removed the right to property from the list of fundamental rights making it even more arduous to fight for compensation.
The Supreme Court reaffirmed in Jilubhai Khachar v. State of Gujarat that in light of the Forty-fourth Amendment, it was not permitted to discuss whether compensation granted under an acquisition legislation was enough. Due to the large eviction of underprivileged peasants and traditional groups, the State’s extensive land acquisition for dams, infrastructure, and private enterprise has drawn major public attention during the 2000s. In Sanjiv Agarwal v. Union of India, a public interest petition was submitted to the Supreme Court in 2009 with the goal of overturning the forty-fourth constitutional amendment and restoring the basic right to property. The Apex court, however, rejected the petition. The conditions of “public purpose” and “compensation” within Article 300A were finally re-established in 2013 when the Supreme Court ruled in KT Plantation Private Ltd v. State of Karnataka that India had a strong legal system and that the court did not lack the authority to award compensation.
In 2013, Parliament introduced the Transparency in Land Acquisition, Rehabilitation, and Resettlement Act to enhance the compensation payable in the cases of temporary acquisition of land and provided rehabilitation awards in cases of displacement. Under Section 27 of the LARR Act’2013, amount of compensation in cases involving rural regions and twice in cases involving urban areas, the compensation for the owners of the seized land should be four times the market value. Even though the fundamental right to property was taken away in the 44th Amendment, the introduction of this act restored the legal right to property.
This article is written by Garvit Shrivastava, a second-year law student at O.P. Jindal Global Law School. His research interests lie in the area of Real Estate laws, corporate laws, Alternative Dispute Resolution, and Insolvency and Bankruptcy Laws.
