Land Acquisition Compensation: Supreme Court Denies Claim for Higher Compensation Under Section 28A

The Supreme Court of India recently delivered a critical judgment in the case of M/S. Model Economic Township Ltd. vs. Land Acquisition Collector, addressing the issue of compensation under the Land Acquisition Act, 1894. The case revolved around whether a company that had earlier accepted compensation without seeking reference could later claim higher compensation under Section 28A based on revised compensation rates.

Background of the Case

The dispute arose when a notification was issued on 19.05.2008 under Section 4 of the Land Acquisition Act, 1894, followed by a declaration under Section 6 on 26.05.2008 for acquiring 136 acres of land. An award was passed on 21.12.2009, granting compensation at a rate of Rs. 25,00,000 per acre. While several landholders sought higher compensation through reference under Section 18, the petitioner, M/S. Model Economic Township Ltd., did not file any such application.

On 16.11.2011, the Reference Court increased the compensation to Rs. 41,81,500 per acre. The petitioner, which had originally not sought a reference, then filed an application under Section 28A on 01.02.2012, seeking redetermination of its compensation based on the revised rates set by the Reference Court. This application was allowed on 06.03.2014, granting the petitioner the same benefits awarded by the Reference Court.

Key Issues Before the Supreme Court

• Whether a company that had earlier accepted compensation could later claim enhanced compensation under Section 28A.
• Whether the petitioner’s application under Section 28A should have been kept pending until final adjudication of the appeals by other landholders.
• Whether the High Court was correct in dismissing the petitioner’s writ petition seeking further compensation.

Petitioner’s (M/S. Model Economic Township Ltd.) Arguments

• The petitioner argued that under Section 28A of the Land Acquisition Act, once compensation had been enhanced in similar cases, all landowners should be entitled to the same benefits.
• The company contended that its compensation should have been revised in line with the final adjudicated amount granted to other landholders.
• The petitioner cited the Supreme Court’s ruling in Babua Ram vs. State of U.P. (1995) to argue that a final decree, rather than an initial reference award, determines the final compensation.
• The company claimed that it had no knowledge of pending appeals regarding compensation when its Section 28A application was decided.

Respondent’s (Land Acquisition Collector) Arguments

• The Collector argued that the petitioner had accepted the compensation and did not seek a reference at the appropriate time.
• The government contended that the petitioner had missed the opportunity to challenge the original award and could not later claim enhanced compensation.
• It was pointed out that Section 28A was designed to help individuals who were unaware of their rights, and not large companies that had the resources to seek reference in time.
• The government asserted that the petitioner filed the writ petition only after learning about the significantly higher compensation awarded to other landholders.

Supreme Court’s Observations

The Supreme Court analyzed the objectives of Section 28A and observed:

“The idea under Section 28A is certainly to extend benefit of equal compensation to landholders who, for some reasons, had not preferred appropriate applications for reference in time. However, for a company with resources such as the petitioner, inaction followed by delay in filing the petition disentitles it from claiming any relief under Article 226.”

“The record indicates that the Collector was given to understand that no appeal or further challenge was pending consideration before any superior court and that the matter had attained finality.”

Key Findings of the Supreme Court

• The Supreme Court ruled that the petitioner had ample opportunity to seek reference at the time of the original award but failed to do so.
• It held that the petitioner’s claim under Section 28A was not valid since it had already accepted the compensation without contesting it.
• The Court observed that companies with significant landholdings and resources cannot invoke Section 28A in the same manner as individual landowners who were unaware of their rights.
• The Court upheld the High Court’s decision to dismiss the petitioner’s writ petition.

Impact of the Judgment

The ruling has significant implications for land acquisition compensation cases:

• Companies cannot misuse Section 28A to claim higher compensation retroactively after initially accepting lower compensation.
• The judgment reinforces that Section 28A is meant to protect small landowners who were unaware of their legal rights, rather than well-resourced corporate entities.
• Landowners must be vigilant and seek references at the appropriate time if they wish to contest compensation awards.

Conclusion

The Supreme Court’s ruling in M/S. Model Economic Township Ltd. vs. Land Acquisition Collector clarifies the scope of Section 28A of the Land Acquisition Act, 1894. The judgment underscores that entities with significant legal and financial resources must exercise their rights in a timely manner and cannot later claim benefits under provisions designed for less-informed landowners. By rejecting the company’s claim for higher compensation, the Court has reinforced the importance of procedural diligence in land acquisition cases.

Petitioner Name: M/S. Model Economic Township Ltd..
Respondent Name: Land Acquisition Collector.
Judgment By: Justice Uday Umesh Lalit, Justice Hemant Gupta.
Place Of Incident: Haryana.
Judgment Date: 26-02-2019.

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