Supreme Court Rules Against Subsequent Purchaser in Land Acquisition Case

The Supreme Court of India recently ruled in Delhi Development Authority vs. MGS (India) Pvt. Ltd. & Ors., setting an important precedent on the rights of subsequent purchasers in land acquisition disputes. The judgment overturned the Delhi High Court’s ruling, which had declared the land acquisition as lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The Court reaffirmed that a subsequent purchaser has no legal standing to challenge the land acquisition process.

Background of the Case

The case involved a dispute over land acquired by the Delhi Development Authority (DDA) in Delhi. The respondent, MGS (India) Pvt. Ltd., had purchased the land after the land acquisition process had already commenced. The High Court of Delhi ruled in favor of MGS, declaring that the acquisition had lapsed under Section 24(2) of the 2013 Act, as neither possession had been taken nor compensation had been paid.

Arguments by the Appellant (DDA)

The DDA, along with the Government of NCT of Delhi, challenged the High Court’s decision before the Supreme Court. Their arguments included:

“The original writ petitioner, MGS (India) Pvt. Ltd., is a subsequent purchaser who acquired the land after the acquisition process had commenced. Such a purchaser has no legal standing to challenge the lapsing of acquisition.”

The award for the land had been passed before the subsequent purchaser acquired the property.
Under Supreme Court precedents, a subsequent purchaser cannot challenge land acquisition proceedings.
The High Court had failed to consider the legal principle that subsequent purchasers inherit the defects and liabilities attached to the acquired land.

Arguments by the Respondent (MGS (India) Pvt. Ltd.)

The respondent, MGS (India) Pvt. Ltd., countered with the following arguments:

“The decision in Government (NCT of Delhi) vs. Manav Dharam Trust (2017) was applicable, as the landowner is entitled to challenge the acquisition if possession has not been taken and compensation has not been paid.”

Additional arguments included:

Their ownership was acquired through a registered sale deed, distinguishing them from cases where purchasers claimed ownership based on a power of attorney.
The High Court had correctly ruled that acquisition lapses if the authorities fail to take possession or provide compensation.
The principles of fairness and natural justice dictate that the government should not be allowed to retain land without compensating the rightful owner.

Supreme Court’s Observations

The Supreme Court examined past rulings and reaffirmed that a subsequent purchaser has no legal standing to challenge land acquisition proceedings. The Court cited key precedents, including:

Shiv Kumar vs. Union of India (2019) 10 SCC 229: Held that subsequent purchasers cannot challenge land acquisition.
Godfrey Phillips (I) Ltd. vs. DDA: Ruled that subsequent purchasers have no locus standi to challenge lapsing of acquisition.
Indore Development Authority vs. Manoharlal (2020): Established that the presence of encroachments does not invalidate the land acquisition process.

The Court further emphasized:

“Subsequent purchasers buy land subject to the acquisition process. They inherit all existing liabilities and cannot claim fresh rights under Section 24(2) of the 2013 Act.”

Final Judgment

The Supreme Court ruled:

The High Court’s judgment was quashed.
The land acquisition did not lapse under Section 24(2) of the 2013 Act.
MGS (India) Pvt. Ltd. had no legal right to challenge the acquisition.
The appeals filed by the DDA and GNCTD were allowed, restoring the validity of the land acquisition.

Implications of the Judgment

This ruling has far-reaching implications for land acquisition cases:

Legal Standing of Subsequent Purchasers: Individuals who purchase land after acquisition proceedings begin cannot challenge the acquisition.
Clarification on Section 24(2): The provision does not apply to subsequent purchasers and cannot be used to question concluded acquisitions.
Strengthening Government’s Acquisition Rights: Authorities can proceed with acquisitions even if land is later sold.

Conclusion

The Supreme Court’s ruling in Delhi Development Authority vs. MGS (India) Pvt. Ltd. reinforces the principle that land acquisition laws must be interpreted strictly. The decision prevents misuse of Section 24(2) by subsequent purchasers and upholds the legitimacy of government acquisitions.

Petitioner Name: Delhi Development Authority.
Respondent Name: MGS (India) Private Limited & Ors..
Judgment By: Justice M.R. Shah, Justice C.T. Ravikumar, Justice Sanjay Karol.
Place Of Incident: Delhi.
Judgment Date: 17-02-2023.

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