A larger Supreme Court Bench will decide whether land acquired by a State government for a public purpose can be returned to the owners if it does not pay compensation within two years as stipulated in the Land Acquisition Act.

Justices A.K. Ganguly and Swatanter Kumar referred the matter relating to land acquisition in Noida, Uttar Pradesh, to Chief Justice S.H. Kapadia for posting before a larger Bench, following a split verdict they gave.

While Justice Ganguly maintained that the government was bound to pay compensation within two years even for acquisition initiated under the emergency provision of Section 17 of the Act, Justice Swatanter Kumar said non-compliance with the provision would not vitiate acquisition and the land would not revert to the owners.

Justice Ganguly said: “Taking possession of land without complying with the requirement of Section 17 (3A) is clearly illegal and in clear violation of the statutory provision.”

In this case, Delhi Airtech Services contended that its land acquired for industrial purposes in NOIDA Sector 88 would revert to it, as a compensation of Rs. 8 crore had not been paid even after three years of the U.P. government taking possession of the land.

Justice Ganguly said that since Section 17 of the Act was a drastic provision authorising the State to take over land without hearing the owner, payment of compensation must be strictly complied with. This court was unable to accept the submission that taking over possession by invoking Section 17 (1) or 17 (2), without making the payment under Section 17 (3A), was legal takeover.

Justice Kumar, however, said: “Once possession of the land is taken, it shall thereupon vest absolutely in the government free from all encumbrances. Reversion of title or possession of the property, which has vested in the government or in the authority for whose benefit such lands are acquired, is unknown to the scheme of the Act. To introduce such a concept by interpretative process would be neither permissible nor proper.”

Directions to States

Besides answering the questions of law, he gave a series of directions to the Centre and the States. They should issue appropriate and uniform guidelines within eight weeks to ensure that owners and persons interested in the land acquired by the State or its instrumentalities were not put to harassment, hardship and inequity because of inaction or omissions on the part of the acquiring authority.

The government should ensure timely action for acquisition and payment of compensation. In the event of default or delay, it should take disciplinary action against the erring officials including making good the loss caused to the government revenue, said Justice Kumar.

In the instant appeal, both judges agreed that the claimants would be entitled to a compensation of Rs. 1 lakh payable by the Uttar Pradesh government and it should recover the amount from the erring officials.