State under bounden duty to pay compensation in land acquisition cases at the earliest: Supreme Court

New Delhi: The Supreme Court has said when acquisition of land for public purpose is undertaken under the power of eminent domain of the government much against the wishes of the landowners, this is coupled with a bounden duty and obligation on part of the government body to ensure that the compensation or awarded amount is paid as declared by the statutory award at the earliest.

A bench of Justices J B Pardiwala and Manoj Misra said the omission or lapse to complete such an exercise before taking possession of the land could be said to be in contravention of the mandate of Section 38(1) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

The court also said Section 38 of the 2013 Act indicated that the payment of full and final compensation to land owners is a precursor to taking possession of the land sought to be acquired from such persons.

The bench said the State cannot abdicate its constitutional and statutory responsibility of payment of compensation by arguing that its role was limited to initiating acquisition proceedings.

It also said any delay in the payment of compensation to the landowners after taking away ownership of the subject land from them is in contravention to the spirit of the constitutional scheme of Article 300A and the idea of a welfare State.

In its decision on appeal by Ultra-tech Cement Ltd related to payment of supplementary award to landowners for their land in Solan, the bench said, "It is regrettable that the State of Himachal Pradesh, being a welfare state, did not ensure payment of compensation to the Respondent Nos 1-6 before taking possession of their land."

The court set aside the Himachal Pradesh High Court's judgment of July 12, 2022, which directed the appellant to pay the amount with regard to acquisition of 56.14 Bighas of land in Arki tehsil for creating a safety zone around the mining area and a cement plant.

It ordered the State of Himachal Pradesh and the Land Acquisition Collector, Arki, to pay Rs 3,05,31,095 along with 9 per cent interest from date of award on May 2, 2022 till its realisation, within 15 days to the landowners.

The court clarified the amount would be recovered from Jaiprakash Associates Ltd as the land was acquired for the company (which although was taken over by the appellant in 2017 but the ownership of land still vested with it).

In its judgment on September 20, the bench said the government of Himachal Pradesh as a welfare State ought to have proactively intervened in the matter with a view to ensure that the requisite amount towards compensation is paid at the earliest.

"The state government, in peculiar circumstances, was expected to make the requisite payment towards compensation to the landowners from its own treasury and should have thereafter proceeded to recover the same from JAL. Instead of making the poor landowners run after the powerful corporate houses, it should have compelled JAL to make the necessary payment," the bench said.

Although the requirement to pass a supplementary award for the purpose of determining additional compensation for the standing trees, damaged structures, houses, etc had been envisaged and recorded in the award of June 08, 2018, yet the possession of the subject land came to be handed over to JAL by the possession certificate on June 07, 2019 without passing such a supplementary award, the court noted.

"The subject land came to be acquired by invoking special powers in cases of urgency under Section 17(4) of the 1894 (Land Acquisition) Act. The invocation of Section 17(4) extinguishes the statutory avenue for the landowners under Section 5A to raise objections to the acquisition proceedings. These circumstances impose onerous duty on the State to facilitate justice to the landowners by providing them with fair and reasonable compensation expeditiously," the bench said.

In a welfare State, the court said the statutory authorities are legally bound to pay adequate compensation and rehabilitate the persons whose lands are being acquired.

"The non-fulfilment of such obligations under the garb of industrial development, is not permissible for any welfare State as that would tantamount to uprooting a person and depriving them of their constitutional/human right," the bench said.

Emphasising that time is of the essence in determination and payment of compensation, the bench said, "We regret to note that the amount of Rs 3,05,31,095 determined as compensation under the supplementary award has not been paid to the landowners for a period of more than two years and the State of Himachal Pradesh as a welfare State has made no effort to get the same paid at the earliest".