A Bench of the Supreme Court comprising of Justice K. M. Joseph and Justice S. Ravindra Bhat has held in a judgment of November 23 that authorities must remain alive and alert to the precious right created in favour of the citizens under Section 5A of the Land Acquisition Act, 1894, which is not meant to be a mere empty ritual.

The Court noted that Section 5A of the Land Acquisition Act, 1894 guarantees a right to the person interested in the property which was the only statutory safeguard to stave off of a compulsory acquisition of his property. The Court noted that despite conflicting signals from various decisions of the Court, there was an element of consensus on fundamental principles.

Mr. Abhay Kumar appeared on behalf of the appellant while Mr. R.K. Raizada, Senior Advocate made submissions on behalf of the first respondent. Mr. Ravindra Kumar represented the second respondent before the Court.

The original appellants (now substituted by their LRs before the Apex Court) had challenged two notifications issued under Land Acquisition Act, 1894 before the High Court. The challenge failed and the High Court dismissed the writ petition. Via the first notification the powers under Section 4 and 17(4) of the Act came to be invoked in regard to the property of the appellants.

A notification was issued under Section 4(1) of the Act coupled with notification under Section 17(4) with regard to 52.361 hectares of land for the construction of a residential colony under the Bulandshhar Khurja Development Authority. The appellants argued that despite urgency clause being invoked, possession was only taken in January 2006. They argued that subject property was excluded from first acquisition and there was no need to acquire the property.

The Court discussed various authorities on the point of law concerning Section 5A of the Act. The Court noted that there was a discordant note which was struck in State of U.P. V. Smt. Pista Devi and others, (1986) 4 SCC 251 as against the view taken earlier.

The Court discussed the decision in Anand Singh And Another v. State Of Uttar Pradesh And Others, 2010 (11) SCC 242 wherein the Court had noticed the conflict between the decision rendered in Narayan Govind Gavate and Others v. State of Maharashtra and Others, (1977) 1 SCC 133 and Pista Devi (Supra). The Court, thereafter, also noted the decision in State Of Haryana v. Eros City Developers Private Limited and Others, (2016) 12 SCC 265 wherein the Court had taken the view that public interest must receive primacy when it conflicts with private interest.

Analysis of the Court:-

At the outset, the Court culled out the principles at play. The Court noted that what was required of the authority was to form a subject opinion. The opinion cannot be whimsical or capricious and there must be materials which are relevant. The authority ought to apply its mind. The action must not be malafide. The Court noted that merely because purpose of acquisition is a public purpose, duty of authority doesn't end. The Court made the following crucial observations.

"… He must be satisfied that there is real agency such that the invaluable right vouchsafed to a person to ventilate his grievances against the acquisition is not unjustifiably extinguished. Section 5A of the Act guarantees a right to the person interested in the property which was the only statutory safeguard to stave off of a compulsory acquisition of his property. The power under Section 17 (4) is discretionary. Being a discretion it must be exercised with due care. It is true that if there is relevant material however meagre it may be and the authority has without being guided by extraneous considerations applied his mind and taken a decision, then the court would adopt a hands-off approach. In the ultimate analysis as with any other decision a balancing of conflicting interests is inevitable. The authorities must remain alive and alert to the precious right created in favour of the citizens which is not meant to be a mere empty ritual."

The Court that the dichotomy has to be essentially resolved by carefully attending to the facts of each case.

The Court noted that in the instant case, a perusal of the notification under Section 17(4) of the Act showed that land was recited as being needed for public purpose. The appellants had furnished a representation praying that property may not be taken for residential/commercial scheme as the cattle market is located at one coroner of the land and that was their only source of income. Appellants also stated their readiness to construct a separate boundary wall.

The Court noted that there was no indication in the file about the urgency for issuing the declaration immediately after Section 4 notification. In other words, the Court noted ".. the file does not reveal any urgency at all associated with the need to acquire the land immediately which constitutes the foundation for invoking the urgency clause. … We are at a loss as to what was the material which was relevant to a decision under section 17(4) of the Act."

The Court noted that the authority under Section 5A was expected to give a fair hearing and it can stand between an uncalled-for proposal to acquire the property. The Court noted that disputed questions of facts were to be considered by the same authority.

The Court, thus, held as follows.

"We would therefore think that in the facts of this case, having regard to the nature of the scheme, the delay with which section 6 declaration was issued, possession taken and the nature of the material on the basis of which the proposal was processed, the appellants are justified in contending that the notification under 17(4) dispensing with the inquiry under Section 5A was unjustified."

The Court noted that now the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 is in vogue and hence there was no question of matter being considered for an inquiry under Section 5A.

Hence, the appeal was allowed, and the impugned notifications were quashed. It was directed that property be returned back to the appellants.

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