Supreme Court Rules on Land Acquisition: Subsequent Purchasers Have No Right to Challenge

The Supreme Court of India, in the case of Delhi Development Authority vs. Narendra Kumar Jain & Ors., delivered a significant judgment on the rights of subsequent purchasers in land acquisition cases. The Court ruled that individuals who purchase land after it has been acquired by the government do not have the legal standing to challenge the acquisition or seek a deemed lapse under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement Act, 2013 (LARR Act).

Background of the Case

The case involved a land acquisition in Delhi, where the Delhi Development Authority (DDA) acquired a piece of land as part of a development project. The original landowners did not challenge the acquisition at the time it was undertaken. However, subsequent purchasers of the land—who acquired it after the acquisition process had been initiated—filed a writ petition in the Delhi High Court in 2015, arguing that the acquisition should be deemed to have lapsed under Section 24(2) of the LARR Act.

The Delhi High Court ruled in favor of the subsequent purchasers, declaring that the land acquisition had lapsed because compensation had not been paid. Aggrieved by this decision, the DDA appealed to the Supreme Court.

Legal Issues Considered

The Supreme Court examined several key legal issues, including:

Whether a subsequent purchaser has the right (locus standi) to challenge a land acquisition.
The applicability of the Supreme Court’s previous ruling in Govt. of NCT of Delhi vs. Manav Dharma Trust (2017), which was relied upon by the High Court.
Whether non-payment of compensation automatically results in the lapse of land acquisition under Section 24(2) of the LARR Act.
The precedential value of the Supreme Court’s rulings in Shiv Kumar vs. Union of India (2019) and Delhi Development Authority vs. Godfrey Philips (I) Ltd. (2022).

Arguments by the Delhi Development Authority

The DDA argued that:

The original landowners had not challenged the acquisition, and subsequent purchasers had no right to question it.
The High Court relied on the Manav Dharma Trust ruling, which had already been overruled in subsequent judgments.
According to the Supreme Court’s rulings in Shiv Kumar and Godfrey Philips (I) Ltd., subsequent purchasers cannot claim a lapse of acquisition.
Allowing subsequent purchasers to challenge acquisitions would create uncertainty in public infrastructure projects.

Arguments by the Respondents (Subsequent Purchasers)

The subsequent purchasers contended that:

Under Section 24(2) of the LARR Act, if compensation is not paid, the acquisition should be deemed to have lapsed.
They had legally purchased the land and had the right to seek relief against an incomplete acquisition.
The High Court had correctly applied the Manav Dharma Trust precedent in declaring the acquisition invalid.

Supreme Court’s Observations

Subsequent Purchasers Have No Locus Standi

The Supreme Court reaffirmed that subsequent purchasers do not have the legal standing to challenge a land acquisition. It ruled that:

Land acquisition is an executive function meant for public purposes, and challenges must be raised by the original landowners.
The rights of subsequent purchasers, if any, are derived from the original landowners and do not extend to challenging the acquisition.
The ruling in Manav Dharma Trust had been overruled, and the correct position was laid down in Shiv Kumar and Godfrey Philips (I) Ltd..

Non-Payment of Compensation Does Not Automatically Invalidate Acquisition

The Court clarified that non-payment of compensation alone does not result in the automatic lapse of land acquisition under Section 24(2) of the LARR Act. The acquisition remains valid unless set aside by a competent authority.

Final Judgment

The Supreme Court ruled that:

The High Court’s decision was erroneous and was accordingly set aside.
Subsequent purchasers have no right to challenge land acquisition.
The acquisition by the DDA remained valid.
The appeal by the DDA was allowed.

Key Takeaways

Subsequent purchasers cannot challenge land acquisition: The ruling clarifies that only original landowners have the right to contest acquisition.
Non-payment of compensation does not automatically void acquisition: Land acquisition remains valid unless legally annulled.
Manav Dharma Trust is no longer good law: Future cases must follow the rulings in Shiv Kumar and Godfrey Philips (I) Ltd..
Judicial certainty in land acquisition cases: The decision ensures stability in infrastructure projects and government acquisitions.

Conclusion

The Supreme Court’s ruling in Delhi Development Authority vs. Narendra Kumar Jain & Ors. provides critical legal clarity on the rights of landowners and subsequent purchasers in acquisition matters. By upholding the principle that subsequent purchasers have no right to challenge government acquisitions, the Court has reinforced legal certainty in public land acquisitions.

Petitioner Name: Delhi Development Authority.
Respondent Name: Narendra Kumar Jain & Ors..
Judgment By: Justice M.R. Shah, Justice Ahsanuddin Amanullah.
Place Of Incident: Delhi.
Judgment Date: 04-05-2023.

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