Land Acquisition Dispute: Gujarat Government vs Jayantibhai Ishwarbhai Patel

The case of State of Gujarat & Ors. vs. Jayantibhai Ishwarbhai Patel revolves around a long-standing land acquisition dispute under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement Act, 2013 (hereinafter referred to as the “Act, 2013”). The matter reached the Supreme Court after the Gujarat High Court ruled in favor of the landowner, declaring the acquisition as lapsed under Section 24(2) of the Act, 2013. The Supreme Court was called upon to determine whether the acquisition process had indeed lapsed due to non-payment of compensation and whether possession had been legally transferred.

Background of the Case

The dispute began when a notification under Section 4 of the Land Acquisition Act, 1894, was issued on April 11, 1991, to acquire land for the resettlement of oustees affected by the Narmada Project. The land in question, owned by the respondent, was part of this acquisition. Subsequently, a notification under Section 6 was issued on February 6, 1992, and a consent award was passed on June 11, 1993.

Under the terms of the award, 90% of the compensation was to be paid upfront, while the remaining 10% was to be paid later. However, the landowner later sought to withdraw his consent and requested the release of the land. This led to prolonged litigation over whether the acquisition remained valid or had lapsed under the new Act, 2013.

High Court’s Ruling

The Gujarat High Court ruled in favor of the landowner, stating that since neither possession was taken nor compensation was paid within the prescribed period, the acquisition was deemed to have lapsed under Section 24(2) of the Act, 2013. The court set aside the award, effectively nullifying the acquisition.

Supreme Court Proceedings

The State of Gujarat, dissatisfied with the High Court’s decision, appealed before the Supreme Court. The primary questions before the Court were:

Whether possession of the land had been legally transferred to the acquiring authority?
Whether compensation had been duly paid or tendered to the landowner?
Whether the acquisition could be deemed to have lapsed under Section 24(2) of the Act, 2013?

Arguments by the State of Gujarat

The counsel for the State of Gujarat argued that:

The land was acquired through a legally valid consent award in 1993.
Possession was taken by drawing a panchnama at the time of the award.
The landowner had refused to accept compensation despite being called upon to do so.
As per the ruling in Indore Development Authority vs. Manoharlal, mere non-payment of compensation does not lead to lapse of acquisition.

The state contended that the High Court had failed to appreciate that the acquisition remained valid despite the refusal of the landowner to accept the compensation.

Arguments by the Respondent

The counsel for the landowner, however, argued that:

The landowner had withdrawn his consent and refused to accept compensation.
He remained in continuous possession and continued to cultivate the land.
The acquiring authority failed to pay compensation for over two decades.
The acquisition proceedings had thus lapsed under Section 24(2) of the Act, 2013.

The respondent contended that the long delay in enforcing the acquisition rendered it legally invalid.

Supreme Court’s Judgment

The Supreme Court, after reviewing the evidence, held that:

The landowner had refused to accept compensation despite it being offered.
The panchnama drawn at the time of acquisition indicated that possession was taken.
Under the principles laid down in Indore Development Authority, acquisition does not lapse due to the mere non-payment of compensation if the landowner refuses to accept it.

The Court observed:

“Once the landowner refuses to accept the compensation offered by the acquiring body, it will not be open for him to claim lapse of acquisition on the ground that compensation has not been paid.”

Further, the Court ruled that the twin conditions for lapse under Section 24(2) of the Act, 2013—failure to take possession and failure to pay compensation—were not met in this case. Since possession was taken and compensation was tendered, the acquisition remained valid.

Conclusion

The Supreme Court overturned the High Court’s ruling, upholding the validity of the acquisition. It reiterated that:

Landowners cannot claim lapse of acquisition if they voluntarily refuse compensation.
Drawing a panchnama is a legally valid mode of taking possession.
Authorities cannot be held responsible for non-payment if landowners refuse to accept compensation.

This judgment clarifies the scope of Section 24(2) of the Act, 2013, ensuring that acquisition proceedings are not unduly disrupted due to technical objections by landowners.

Petitioner Name: State of Gujarat & Ors..
Respondent Name: Jayantibhai Ishwarbhai Patel.
Judgment By: Justice M. R. Shah, Justice Manoj Misra.
Place Of Incident: Gujarat.
Judgment Date: 17-03-2023.

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