The Sikkim High Court has held that a Collector should not pass a composite award combining the determination of market value under Section 23 with the final award and solatium under Section 30 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. Such an award forecloses the appropriate Government’s power under Section 36 to examine the legality and propriety of the Collector’s findings before the final award. It is therefore legally unsustainable and unenforceable.

The Court held that since the Collector acts as the agent of the appropriate Government, a writ of certiorari does not lie at the instance of the requiring authority. A declaratory writ may lie, however, where the award is made in violation of statutory provisions or with mala fides. It directed that the award be treated only as a determination under Section 23, and that the Government decide the Union’s objections within six weeks.

A Single Bench of Chief Justice A. Muhamed Mustaque observed, “The award passed by the Collector, insofar as it combines the determination of compensation under section 23 with the award of solatium under section 30, is in opinion of this Court, legally unsustainable and unenforceable, inasmuch as that would foreclose the right of the Union Government to question the determination of the value by the Collector under Section 23. The Government is therefore bound to examine the matter as to the legality and propriety of the determination of compensation by the Collector”.

Senior Advocate S.D. Sanjay and Sangita Pradhan, Deputy Solicitor General appeared for the petitioners while Zangpo Sherpa, Additional Advocate General and Senior Advocate Sudesh Joshi appeared for the respondents.

“In the light of the legal provision under Section 36, it is ex facie to hold that the Collector, after determination of the compensation under Section 23, will have to wait for a reasonable period of time to ensure invocation of the legal remedy under Section 36. If not, section 36 will become otiose and redundant. If a composite award is passed the remedy of the government to invoke section 36 will be foreclosed as the statute itself contemplates passing an award in two different phases, one under Section 23 and one under Section 30 of the LA Act, 2013. However, inquiry by the Government will have to confine to the extent well defined contours of revisional power. Its review must strictly remain with the established boundaries of revisional authority, focusing solely on the legality or propriety of the rate-fixation finding in matters like this. Therefore, the Government will have to consider whether the Collector adhered to the requisite procedural framework in determining the rate”, the Bench further noted.

The Indian Army proposed to acquire 102.1189 hectares in the Lachen, Lachung and Chungthang revenue blocks of Mangan District, close to the international border, for the construction of key location places. The preliminary notification under Section 11 was issued on August 17, 2021, with land valued at ₹65 per sq. ft. The Union deposited ₹230.13 crore.

In August 2022, the Collector proposed re-examining compensation, relying on a 2017 Energy and Power Department notification fixing ₹300 per sq. ft. After representations by landowners, the rate was revised to ₹150 per sq. ft. with the approval of the Minister and the Chief Minister.

The Defence Estates Office repeatedly objected and sought circle rates and three years’ sale data, contending that the revision was arbitrary and contrary to Section 26. The Collector justified the revision on the ground that the area is inhabited by Scheduled Tribes and protected under the 1958 notification read with Article 371F, that land is scarce, and that the land is ancestral. The award dated January 18, 2023 fixed total compensation at ₹564.97 crore without addressing the Defence objections.

The Bench held that the Collector’s inquiry into market value is administrative but must consider all relevant material and the requiring body’s objections. The inquiry into claimants’ objections, by contrast, is quasi-judicial and requires a reasoned order. It noted that the 2013 Act sets out two distinct stages, a determination under Section 23 followed by a final award under Section 30. It held that the Collector must wait a reasonable time after the Section 23 determination so that Section 36 is not rendered otiose.

The Court directed the Government to consider the Union’s objections after hearing all concerned, including the landholders, within six weeks. Valuation is to be assessed with reference to the date of the preliminary notification. The Collector is to pass the final award thereafter.

Cause Title: Union of India & Ors. v. State of Sikkim & Ors. (WP(C) No. 28 of 2023)

Appearances:

Petitioners: Senior Advocate S.D. Sanjay, with Deputy Solicitor General Sangita Pradhan, Advocates Sittal Balmiki and Amit Kumar Sharma

Respondents: Additional Advocate General Zangpo Sherpa, with Government Advocate S.K. Chettri, Assistant Government Advocate Sujan Sunwar and Advocate Mohan Sharma, Senior Advocate Sudesh Joshi, with Advocates Sourav Singh and Adarsh Gurung

Click here to read/download the Judgment


Chief Justice A. Muhamed MustaqueSikkim High Court

Agatha Shukla