Land Acquisition Cannot Be Challenged by Subsequent Buyers: Supreme Court Overrules High Court Order

The Supreme Court of India has clarified the legal position on whether a subsequent purchaser of land can challenge land acquisition proceedings. In a landmark decision, the Court ruled that subsequent buyers have no locus standi to contest land acquisition or seek lapsing of the proceedings. This ruling came in the case of Government of NCT of Delhi & Anr. vs. M/s. Beads Properties Pvt. Ltd. & Ors., where the Supreme Court overturned a Delhi High Court order that had declared the acquisition of certain land to have lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

Background of the Case

The dispute revolved around a piece of land that was acquired by the Government of NCT of Delhi. The original landowners never challenged the acquisition. However, M/s. Beads Properties Pvt. Ltd., a subsequent purchaser, filed a writ petition in the Delhi High Court, claiming that the land acquisition had lapsed due to the operation of Section 24(2) of the 2013 Act.

The timeline of events was as follows:

The notification under Section 4 of the Land Acquisition Act, 1894, was issued on November 25, 1980.
The declaration under Section 6 of the 1894 Act was made on June 7, 1985.
The award under Section 11 of the 1894 Act was published on July 9, 1987.
M/s. Beads Properties Pvt. Ltd. purchased the land in 1990, several years after these proceedings.

The Delhi High Court ruled in favor of the subsequent purchaser, holding that the land acquisition had lapsed. Aggrieved by this decision, the Government of NCT of Delhi appealed to the Supreme Court.

Arguments by the Appellant (Government of NCT of Delhi)

The original landowners never challenged the acquisition, and therefore, the subsequent purchaser had no right to do so.
The High Court failed to consider Supreme Court precedents, which establish that subsequent purchasers cannot claim lapsing of land acquisition.
The acquisition process was lawfully completed, and the High Court erred in ruling otherwise.

Arguments by the Respondent (M/s. Beads Properties Pvt. Ltd.)

Since the compensation was not paid to the landowners, the acquisition should be considered lapsed under Section 24(2) of the 2013 Act.
The respondent, as the current owner of the land, had the right to challenge the acquisition.
The High Court correctly applied the 2013 Act to hold that the acquisition had lapsed.

Supreme Court’s Observations and Ruling

The Supreme Court emphasized that the issue of whether a subsequent purchaser has the right to challenge land acquisition is no longer in dispute. It relied on previous decisions, including Shiv Kumar & Anr. vs. Union of India & Ors. (2019) and Delhi Development Authority vs. Godfrey Phillips (I) Ltd., to reiterate that subsequent purchasers lack standing to contest land acquisition.

The Court made the following key observations:

The subsequent purchaser has no right to challenge land acquisition or claim that the acquisition has lapsed.
The original landowners never opposed the acquisition, which suggests that they had accepted the process.
Under settled law, purchasers who acquire land after the notification under Section 4 of the 1894 Act do so at their own risk.
The High Court should not have entertained the writ petition, as the respondent had no legal standing to challenge the acquisition.

The Supreme Court unequivocally ruled:

“The High Court has erred in entertaining the writ petition preferred by the respondent – original writ petitioner being a subsequent purchaser and particularly when the original owners did not challenge the acquisition at all.”

Accordingly, the Supreme Court quashed the High Court’s ruling and upheld the validity of the land acquisition.

Final Judgment

The Supreme Court allowed the appeal and ruled that the acquisition of the land had not lapsed. The High Court’s judgment was set aside, and it was held that:

M/s. Beads Properties Pvt. Ltd. had no locus standi to challenge the acquisition.
The acquisition proceedings were legally completed and could not be reopened by a subsequent purchaser.
The principle that subsequent purchasers cannot contest land acquisition is now firmly established in law.

Implications of the Judgment

This ruling has far-reaching consequences for real estate transactions and land acquisition cases:

Clarity for Buyers: Individuals and companies purchasing land must verify whether it has been subject to acquisition proceedings before completing transactions.
Precedent for Future Cases: Courts across India will now be guided by this ruling, ensuring that subsequent purchasers do not interfere with land acquisition matters.
Protection of Public Projects: Government and infrastructure projects that rely on land acquisition will be safeguarded from legal challenges by buyers who acquire land after acquisition notifications.

Conclusion

The Supreme Court’s judgment in Government of NCT of Delhi vs. M/s. Beads Properties Pvt. Ltd. reaffirms the principle that land acquisition proceedings cannot be contested by individuals who purchase land after the acquisition process has already been initiated. This decision upholds the rule of law, prevents unnecessary litigation, and ensures that infrastructure and development projects are not hindered by subsequent purchasers. It serves as a crucial precedent for future land acquisition cases, providing much-needed clarity to buyers and authorities alike.

Petitioner Name: Government of NCT of Delhi and Anr..
Respondent Name: M/s. Beads Properties Pvt. Ltd. & Ors..
Judgment By: Justice M.R. Shah, Justice C.T. Ravikumar.
Place Of Incident: New Delhi.
Judgment Date: 12-03-2023.

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