REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.24 OF 2009

M/s. Delhi Airtech Services  Pvt. Ltd. & Anr.     … Appellants

Versus

State of U.P. & Anr.   … Respondents

J U D G M E N T

Swatanter Kumar, J.

1. I had the advantage of reading the well-written judgment  

of  my  learned  brother,  A.K.  Ganguly,  J.   Regretfully  but  

respectfully, I am unable to persuade myself to concur with  

the findings recorded and the exposition of law expressed by  

my learned brother.  In order to discernly state the reasons for  

my expressing a contrary view and dismissing the appeals of  

the appellants on merits, it has become necessary for me to  

state the facts as well as the law in some detail.  It has been  

necessitated for the reason that complete facts, as they appear

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from the record and the facts which were brought to the notice  

of the Court during the course of hearing by the respondents,  

supported by the official records, duly maintained by them in  

normal course of their business, have not,  in their entirety,  

and correctly been noticed in the judgment.  I am also of the  

considered  view  that,  in  fact,  the  questions  framed  

(particularly  question  ‘D’)  in  the  judgment  by  my  learned  

brother neither  so  comprehensively  arise  in  the  facts  and  

circumstances  of  the  present  case  nor  were  argued in that  

manner and to that  extent before the Court.   Be that as it  

may,  I  consider  it  necessary  to  restate  the  facts,  deal  with  

different  legal  aspects  of  the  case  and  then  record  the  

conclusions  which  would  even  provide  answers  to  the  

questions framed by my learned brother at the very beginning  

of his judgment.  Before I proceed to do so, let me briefly but,  

inter alia, state the reasons for my taking a view contrary to  

the one recorded in the judgment of my learned brother:

I. I have already stated that complete and correct facts,  

in  their  entirety,  as  they  emerge  from  the  records

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produced before the Court (including the trial court  

record) as well as the documents referred to during  

the course of arguments by the respondents have not  

been correctly noticed.  The records referred to have  

been  maintained  by  the  authorities  in  the  normal  

course  of  their  business  and their  authenticity  can  

hardly be questioned.   These documents have been  

executed  inter  se various  institutions/departments,  

including the Collector’s office, who discharges quasi-

judicial functions under the Act.    

II. The judgment of  this court in the case of  Satendra  

Prasad Jain & Ors. v. State of U.P. & Ors. [AIR 1993  

SC 2517 = (1993) 4 SCC 369], in my humble view,  

cannot  be  ignored  and  the  principle  stated  therein  

cannot be avoided on the ground that the judgment  

was sub silentio.  This I say so, for the reason that it  

is not a decision in which the point was not raised,  

argued and perceived by the Court.  On the contrary,  

the  issue  in  relation  to  the  consequences  of  non-

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payment  flowing  from  Section  17(3A)  of  the  Land  

Acquisition Act  (for  short,  the  ‘Act’)  was specifically  

noticed by the three-Judge Bench in paragraph 11 of  

the judgment.  It was discussed in some detail and a  

definite  finding  was  recorded  thereby  bringing  the  

judgment  well  within  the  dimensions  of  good  

precedent.   Thus,  I,  with  respect,  would  prefer  to  

follow the larger Bench judgment rather than ignoring  

the same for the reasons stated by my learned brother  

in  his  judgment  do  not  apply  in  the  facts  of  the  

present case.

III. The  ratio  decidendi of the judgment of this Court in  

the case of  Satendra Prasad Jain  (supra) is squarely  

applicable to the present case, on facts and law.

IV. It has not been correctly noticed in the judgment that  

80  per  cent  of  due  compensation,  which  even  the  

appellants  did  not  dispute  during  the  course  of  

hearing,  had  not  been  tendered  or  paid  to  the  

claimants,  as contemplated under Section 17(3A) of

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the  Act.   From the  facts  recorded hereinafter,  it  is  

clear that within the prescribed period, the payments  

were  deposited  with  the  State  office  of  the  

Collector/competent authority and it was for the State  

to  distribute  the  money  in  accordance  with  the  

provisions of the Act.  It is not only the scheme of the  

Act but also an established practice that the amounts  

are disbursed by the Collector to the claimants and  

not directly by the beneficiary, for whose benefit the  

land  had  been  acquired.   The  beneficiary  had  

discharged  its  obligation  by  depositing,  in  fact,  in  

excess of 80 per cent of due compensation with the  

competent authority.  De hors the approach that one  

may adopt in regard to the interpretation of Section  

17(3A), on facts the notification is incapable of being  

invalidated for non-compliance of the said Section.

V. The  doctrine  of  strict  construction  does  not  per  se  

mandate  that  its  application  excludes  the  

simultaneous  application  of  all  other  principles  of

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interpretation.  It is permissible in law to apply the  

rule of strict construction while reading the provisions  

of law contextually or even purposively.  The golden  

rule  of  interpretation is  the  rule  of  plain  language,  

while preferring the interpretation which furthers the  

cause of the Statute rather than that which defeats  

the objects or purposes of the Act.   

VI. Non-providing of consequences under Section 17(3A)  

of the Act, in contradistinction to Sections 6 and 11 of  

the  same Act,  in  my considered view is  largely  the  

determinative  test  for  proper  and  judicious  

interpretation of Section 17(3A).

VII. The  judgment  by  my  learned  brother  does  not  

consider  the  judgments  of  the  Constitution  Bench,  

the  larger  Bench  and  even  the  equi-Bench,  which  

have to some extent a direct bearing on the matters in  

issue before us.  In this regard, reference can be made  

to the Constitution Bench judgment of this Court in  

the case of  Offshore Holdings Pvt.  Ltd. v.  Bangalore

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Development Authority & Ors. [(2011) 3 SCC 139], the  

three-Judge Bench judgment in the case of Tika Ram  

& Ors. v. State of U.P. & Ors., [(2009) 10 SCC 689] and  

particularly  the  judgment  of  another  equi-Bench of  

this  Court  in  the  case  of   Banda  Development  

Authority, Banda v. Moti Lal Agarwal & Ors. [2011 (5)  

SCALE 173], to which my learned brother (Ganguly,  

J.) was a member.  The latter case,  inter  alia, dealt  

with  a  question  of  lapsing  of  proceedings  under  

Section 11A on the ground that the possession of the  

property had not been taken as required under that  

provision.  While rejecting such a contention in that  

case, the Court observed that if the beneficiary of the  

acquisition  is  an  agency  or  instrumentality  of  the  

State  80  per  cent  of  the  total  compensation  is  

deposited in terms of Section 17(3A) and substantial  

portion  of  the  acquired  land  has  been  utilized  in  

furtherance of the particular public purpose, it could  

reasonably  be  presumed that  the  possession of  the  

acquired land had been irrevocably taken.  The Court

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then  held  that  relief  to  the  appellants  (like  the  

appellants  in  the  present  case)  of  invalidating  the  

acquisition proceedings and restoring the land could  

not be granted.

VIII. The 44th Constitutional Amendment, on the one hand,  

omitted  Article  19(1)(f)  and  Article  31  while  

introducing Articles 31A and 300A to the Constitution  

of India on the other.  Right to property was deleted  

as  a  fundamental  right  in  the  Constitution.   Thus,  

this  right  cannot  be  placed  on  equi  terms,  

interpretatively or otherwise, to the pre-constitutional  

amendments.   The  right  to  eminent  domain  would  

operate  on  a  different  sphere,  interpretation  and  

effect,  pre  and  post  constitutional  repealments  of  

these Articles and introduction of Article 300A of the  

Constitution.   Even  on  this  aspect,  I  respectfully  

disagree with the conclusions recorded by my learned  

brother (Ganguly, J.).

FACTS:

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2. Appellant No.1 is a company duly incorporated under the  

provisions of the Indian Companies Act, 1956 and is alleged to  

be  the  owner  of  the  land  sought  to  be  acquired  by  the  

respondents.  The land of the appellant, admeasuring about 2-

06-1/3-0  Bighas  situated  in  Village  Haldauni,  Tehsil  and  

Pargana  Dadri,  District  Gautam  Budh  Nagar,  which  is  an  

abadi land,  was  sought  to  be  acquired  by  the  appropriate  

Government under a notification dated 17th April, 2002 issued  

under Section 4(1) read with Sections 17(1) and 17(4) of the  

Act.  This  land  was  acquired  for  the  planned  industrial  

development in District Gautam Budh Nagar through the New  

Okhla  Industrial  Development  Authority  (NOIDA).  The  

notification also stated that the provisions of Section 5A of the  

Act shall not apply.  In pursuance to the said notification, a  

declaration under Section 6 of the Act was published on 22nd  

August, 2002, declaring the area which was required by the  

Government.  It also stated that after expiry of 15 days from  

the date of the publication of the notification possession of the  

acquired land shall be taken under sub-section (1) of Section 9  

of  the  Act.   The  appellants  have  alleged  that  they  did  not

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receive any notice under Section 9(1) of the Act but possession  

of  the  land  was  nevertheless  taken  on  4th February,  2003.  

According  to  the  appellants,  even after  lapse  of  more  than  

three and a half years after publication of declaration under  

Section  6  of  the  Act,  the  award  had  not  been  made  and  

published.   

The appellants also alleged in the petition that, despite  

inordinate  delay,  they were neither  paid 80 per cent  of  the  

estimated compensation in terms of Section 17(3A) of the Act  

at  the  time  of  taking  of  possession,  nor  had  the  Collector  

passed an award within two years of making the declaration  

under Section 17(1), as required by Section 11A of the Act. It  

was the case of the appellants in the writ petition that this has  

the effect of vitiating the entire acquisition proceedings.  Non-

payment of the compensation and conduct of the Government  

compelled the  petitioners  to  file  a  writ  petition  in  the  High  

Court  of  Allahabad  praying  for  issuance  of  an  order  or  

direction in the nature of  certiorari or any other writ, not to  

create  any  encumbrance  or  interest  on  the  land  of  the

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petitioners.  Further,  they  prayed  that  the  acquisition  

proceedings,  in  so  far  as  they  relate  to  the  land  of  the  

petitioner, be declared void ab initio and that the respondents  

be  directed  to  return  the  land  from  the  possession  of  the  

Government to the owners. Lastly, the petitioners prayed that  

the respondents/Government be directed to pay damages for  

use and occupation of the land.

To this writ petition, the respondents had filed a counter  

affidavit in the High Court, denying that the acquired land was  

in fact a part of the abadi land.  The respondent-authority has  

also stated that 80 per cent compensation in terms of Section  

17(3A) of the Act had been deposited with the authorities.  The  

land had been acquired for  planned development  of  NOIDA  

and  was  in  the  physical  possession  of  the  said  authority.  

Possession of the land had been taken on 4th February, 2003  

and no right had survived in favour of the petitioners as the  

land vested in the Government.   

The  High  Court,  vide  its  judgment  dated  28th August,  

2006, dismissed the writ petition. The High Court relied upon

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the judgment of this Court in the case of Satendra Prasad Jain   

(supra) and dismissed the petition holding that the provisions  

of Section 11A of the Act are not attracted to proceedings for  

acquisition taken by the Government under Section 17 of the  

Act.  However, liberty was granted to the petitioners to pray for  

grant  of  appropriate  compensation  in  accordance  with  law  

before the competent forum.

Aggrieved  by  the  said  order  of  the  High  Court,  the  

appellants  have  filed  the  present  appeal  impugning  the  

judgment dated 28th August, 2006.  

In the counter affidavit filed by respondent No.2 before  

this Court, the submissions made before the High Court have  

been  reiterated  with  an  additional  fact  that  the  sector  in  

question  was  designated  as  industrial  area  and  after  the  

development activity was completed, allotment has been made  

and possession of these industrial plots has also been handed  

over  to  such  entrepreneurs/allottees.  This  land  falls  under  

Sector 88 of the NOIDA City. The rest of the allegations made

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in the writ petition, except the dates in question, have been  

disputed.

It has also been stated at the Bar, on the basis of the  

record  maintained  in  regular  course  of  its  business  by  the  

respondent-authority,  that  10  per  cent  of  the  estimated  

compensation was deposited by the Authority with the State  

Government even prior to the date of  the notification under  

Section 4(1) read with Section 17(4) of the Act, issued by the  

Government, i.e., 17th April, 2002. The remaining 70 per cent  

of  the estimated compensation had allegedly been deposited  

vide  cheque  dated  8/14th July,  2002  amounting  to  

approximately  `6,66,00,000/-.  As  such,  there  is  complete  

compliance with the provisions of Section 17(3A) of the Act by  

the authority concerned.  The Award was made on 9th June,  

2008, which has been accepted by a large number of owners,  

i.e., 97.6 per cent of all owners. Some of these facts have also  

been  averred  in  the  counter  affidavit  filed  before  the  High  

Court.  

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From the  above  pleadings  of  the  parties,  the  admitted  

facts  that  emerge  from  the  record  can  be  usefully  

recapitulated.  The Governor of the State of Uttar Pradesh on  

17th April, 2002, issued a notification under Section 4(1) of the  

Act, expressing the intention of the Government to acquire the  

land  stated  in  the  said  Notification  for  a  public  purpose,  

namely,  for  the  planned  industrial  development  in  District  

Gautam  Budha  Nagar  through  NOIDA.  Vide  the  same  

notification the emergent provisions contained in Section 17 of  

the  Act,  specifically  Section  17(4),  were  also  invoked,  

intimating the public at large that the provisions of Section 5A  

of  the  Act  shall  not  be  applicable.  After  issuance  of  the  

declaration  under  Section  6  of  the  Act,  admittedly  the  

possession of the land in question was taken on 4th February,  

2003.  However, it remains a matter of some dispute before the  

Court  as  to  whether  80  per  cent  compensation,  which  is  

deposited by the beneficiary with the State, had actually been  

received by the land owners/claimants, if so, to what extent  

and by how many.

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The Collector had not made or published the award even  

at  the  time of  pronouncement  of  the  judgment  of  the  High  

Court,  in  Writ  Petition No.  22251 of  2006,  on 28th August,  

2006.  The  High  Court,  in  the  impugned  judgment,  has  

directed the respondent No.1 to ensure that the Award is made  

as early as possible, preferably within a period of three months  

from the date of production of the certified copy of that order.  

In  the  counter  affidavit  filed  before  this  Court,  it  has  been  

stated by the State of Uttar Pradesh that the Award was finally  

made  and  published  on  9th June,  2008.   According  to  the  

appellant, given the fact that the declaration under Section 6  

of  the  Act  was  dated  22nd August,  2002,  then  in  terms  of  

Section 11A of the Act, the acquisition proceedings had lapsed  

as the award ought to have been pronounced on or before 21st  

August, 2004.

Discussion on objects and reasons of the Act

With  the  enormous  expansion  of  the  State’s  role  in  

promoting  public  welfare  and  economic  development  since  

independence, the acquisition of land for public purposes, like

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industrialization, building of institutions, etc., has become far  

more  numerous  than ever  before.   This  not  only  led  to  an  

increase in exercise of executive powers, but also to various  

legislative amendments to the Act.  The 1870 Act abolished the  

system of  uncontrolled  direction  by  arbitrators  and  in  lieu  

thereof, required the Collector, when unable to come to terms  

with  the  persons interested in  the  land which it  desired to  

acquire, to refer these differences to the Civil Courts. It was  

also felt necessary by the framers, to restructure the legislative  

framework for acquisition of land so that it is more adequately  

informed  by  this  objective  of  servicing  the  interests  of  the  

community  in  harmony  with  the  rights  of  the  individual.  

Various amendments were made and certain new provisions  

added to the Act by Amendment Act, 68 of 1984, which took  

effect from 24th September, 1984.  Amongst others, Sections  

11A and 17(3A) of the Act were new provisions added by this  

enactment.   The objects  and reasons  for  amending the  Act  

were  to  bring  a  greater  degree  of  harmony  between  the  

interests of the owners of the land, on the one hand, and the  

acquiring authority on the other.  In its recommendations, the

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Law Commission also expressed a view that individuals and  

institutions,  who are unavoidably  deprived of  their  property  

rights,  need  to  be  adequately  compensated  for  their  loss  

keeping in view the sacrifice they have had to make in the  

larger interests of the community. The pendency of acquisition  

proceedings for long periods causes hardship to the affected  

parties;  so steps were required to  be  taken to truncate  the  

procedural aspect of acquisition proceedings on the one hand,  

and to pay adequate compensation to the owners of the land  

on the other.  By introducing the provisions of Section 11A of  

the  Act  to  the  normal  course  of  acquisition  proceedings,  

greater responsibility  was intended to be fastened upon the  

concerned authorities, whereby they were obliged to make an  

award within two years of the declaration made under Section  

6 of the Act.  The other obvious purpose of the amendment  

was that before emergency provisions are invoked by the State  

and possession is taken in terms of Section 17(1) of the Act, as  

opposed to the normal procedure of acquisition of land where  

possession is taken after the making of an award, it was to be  

obligatory upon the authorities concerned to pay 80 per cent

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of  the  estimated compensation to  the  land owners,  prior  to  

taking possession of the land in terms of Section 17(3A) of the  

Act.  Despite the fact that Right to Property in terms of Article  

19(1)(f)  of the Constitution stood deleted from Chapter III of  

the Constitution, vide 44th Constitutional Amendment, 1978,  

Article  300A  of  the  Constitution  was  added  by  the  same  

Constitutional  Amendment, mandating that ‘no person shall  

be deprived of  his  property save by authority  of  law’.   This  

indicates that the Constitution still mandates two aspects in  

relation  to  acquisition  of  land  by  the  exercise  of  power  of  

eminent domain vested in the State.  Firstly, such acquisition  

has to be by the authority of law; in other words, it has to be  

in  accordance  with  the  law  enacted  by  the  competent  

legislature and not by mere executive action.  Secondly, there  

has  to  be  a  public  purpose  for  acquisition  of  land and the  

person  interested  in  such  land  would  be  entitled  to  

compensation.  

The objects and reasons for introducing the Bill leading  

to  the  Amendment  Act  68  of  1984,  have  explained  the

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amendments made to the Act.  It is not necessary for us to  

dwell upon all the amendments carried out in the Act. Suffice  

it to refer to the amendment made in the definition of ‘public  

purpose’ under Section 3(f) of the Act and to the provisions of  

Sections 11A and 17(3A), with which this Court is primarily  

concerned in the present case.  If I may put it in rather simple  

language,  the  object  of  the  legislation was to  create  greater  

balance between the exercise of power of eminent domain by  

the State and the owner’s deprivation of his property by way of  

compulsory  acquisition  and  the  greater  acceptability  of  

acquisition proceedings amongst land owners.  This balance is  

sought to be created by introducing higher responsibility and  

statutory  obligations  upon  the  acquiring  authority.  

Expeditious and proper payment of fair market value for the  

acquired  land  to  the  claimants  is  required  in  the  light  of  

sacrifice made by them in the larger public interest.

In the case of Devinder Singh & Others v. State of Punjab   

and Others [(2008)1 SCC 728], a Bench of this Court took the  

view  that  the  provisions  of  the  Act  should  be  strictly

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construed. Referring to the provisions of the Act, it spelt out  

the ingredients of valid acquisition to be, (a) the existence of a  

public  purpose;  and  (b)  the  payment  of  requisite  

compensation.  In  cases  of  acquisition  of  land  for  a  private  

company, the existence of a public purpose is not necessary  

but  all  other  statutory  requirements  were  held  to  remain  

imperative in character, requiring strict compliance.

Whether the provisions of Sections 17(3A) and 11A of the  Act are mandatory or directory and to what effect?

Let  us  first  examine  the  general  principles  that  could  

help the Court in determining whether a particular provision  

of a statute is mandatory or directory.  

In  ‘Principles  of  Statutory  Interpretation’,  12th Edition,  

2010, Justice G.P. Singh, at page 389 states as follows:

“As approved by the Supreme Court: “The  question  as  to  whether  a  statute  is  mandatory of directory depends upon the  intent of the Legislature and not upon the  language in which the intent is clothed.  The  meaning  and  intention  of  the  legislation must govern, and these are to  be  ascertained  not  only  from  the  phraseology of the provision, but also by

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considering its nature, its design and the  consequences  which  would  follow  from  construing it  the one way or  the other”  “For ascertaining the real intention of the  Legislature”, points out Subbarao, J, “the  court may consider inter alia, the nature  and  design  of  the  statute,  and  the  consequences  which  would  follow  from  construing  it  the  one  way or  the  other;  the  impact  of  the  other  provisions  whereby the necessity of complying with  the provisions in question is avoided; the  circumstances,  namely,  that  the  statute  provides  for  a  contingency  of  the  non- compliance with the provisions; the fact  that  the  non-compliance  with  the  provisions  is  or  is  not  visited  by  some  penalty;  the  serious  or  the  trivial  consequences,  that  flow  therefrom;  and  above  all,  whether  the  object  of  the  legislation will be defeated or furthered”.  If object of the enactment will be defeated  by holding the same directory, it will be  construed  as  mandatory,  whereas  if  by  holding  it  mandatory,  serious  general  inconvenience will be created to innocent  persons without very much furthering the  object  of  enactment,  the  same  will  be  construed as directory.  But all this does  not mean that the language used is to be  ignored,  but  only  that  the  prima  facie  inference  of  the  intention  of  the  Legislature arising from the words used  may  be  displaced  by  considering  the  nature of the enactment, its design and  the consequences flowing from alternative  construction.  Thus, the use of the words  ‘as nearly as may be’ in contrast to the  words ‘at least’ will prima facie indicate a

22

directory  requirement,  negative  words  a  mandatory requirement ‘may’ a directory  requirement  and  ‘shall’  a  mandatory  requirement.”

Maxwell,  in  Chapter  13  of  his  12th Edition  of  ‘The  

Interpretation  of  Statutes’,  used  the  word  ‘imperative’  as  

synonymous with ‘mandatory’ and drew a distinction between  

imperative  and  directory  enactments,  at  pages  314-315,  as  

follows:

“Passing  from  the  interpretation  of  the  language  of  statutes,  it  remains  to  consider  what  intentions  are  to  be  attributed to the legislature on questions  necessarily arising out of its enactments  and on which it has remained silent.”

The first such question is: when a statute  requires that something shall be done, or  done  in  a  particular  manner  or  form,  without expressly declaring what shall be  the  consequence  of  non-compliance,  is  the  requirement  to  be  regarded  as  imperative  (or  mandatory)  or  forms  prescribed  by  the  statute  have  been  regarded as essential to the act or thing  regulated  by  it,  and  their  omission  has  been held fatal to its validity.  In others,  such prescriptions have been considered  as merely directory, the neglect of them  involving nothing more than liability to a  penalty, if any were imposed, for breach

23

of  the  enactment.  “An  absolute  enactment  must  be  obeyed  or  fulfilled  exactly, but it is sufficient if  a directory  enactment  be  obeyed  or  fulfilled  substantially”.

It is impossible to lay down any general  rule for determining whether a provision  is imperative or directory.  “No universal  rule,”  said Lord Campbell  L.C.,  “can be  laid down for the construction of statutes,  as  to  whether  mandatory  enactments  shall  be  considered  directory  only  or  obligatory with an implied nullification for  disobedience.  It is the duty of Courts of  Justice to try to get at the real intention  of  the Legislature by carefully  attending  to  the  whole  scope of  the  statute  to be  construed.”  And  Lord  Penzance  said:  “I  believe, as far as any rule is concerned,  you cannot safely go further than that in  each case you must look to the subject  matter;  consider  the  importance  of  the  provision that has been disregarded, and  the  relation  of  that  provision  to  the  general object intended to be secured by  the Act; and upon a review of the case in  that aspect decide whether the matter is  what  is  called  imperative  or  only  directory.”

In a recent judgment of this Court, May George v. Special   

Tehsildar and Ors. [(2010) 13 SCC 98], the Court stated the  

precepts, which can be summed up and usefully applied by  

this Court, as follows:

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(a) While determining whether a provision is mandatory or  

directory,   somewhat  on similar  lines  as  afore-noticed,  

the  Court  has  to  examine  the  context  in  which  the  

provision is used and the purpose it seeks to achieve;

(b) To find out the intent of the legislature, it may also be  

necessary to examine serious general inconveniences or  

injustices which may be caused to persons affected by  

the application of such provision;  

(c) Whether the provisions are enabling the State to do some  

things and/or whether they prescribe the methodology or  

formalities for doing certain things;  

(d) As a factor to determine legislative intent, the court may  

also  consider,  inter  alia,  the  nature  and design of  the  

statute  and  the  consequences  which  would  flow  from  

construing it, one way or the other;

(e) It  is  also  permissible  to  examine  the  impact  of  other  

provisions in the same statute and the consequences of  

non-compliance of such provisions;

25

(f) Physiology  of  the  provisions  is  not  by  itself  a  

determinative  factor.   The  use  of  the  words  ‘shall’  or  

‘may’, respectively would ordinarily indicate imperative or  

directory character, but not always.

(g) The test to be applied is whether non-compliance with  

the provision would render the entire proceedings invalid  

or not.

(h) The  Court  has  to  give  due  weightage  to  whether  the  

interpretation intended to be given by the Court would  

further the purpose of  law or if  this purpose could be  

defeated by terming it mandatory or otherwise.

Reference  can be  made  to  the  following  paragraphs  of  

May George (supra) :

“16.  In  Dattatraya Moreshwar  v.  The  State of Bombay and Ors. [AIR 1952 SC  181], this Court observed that law which  creates public duties is directory but if it  confers  private  rights  it  is  mandatory.  Relevant  passage  from this  judgment  is  quoted below:

‘7……..It  is  well  settled  that  generally speaking the provisions of

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the  statute  creating  public  duties  are  directory  and  those  conferring  private rights are imperative. When  the provisions of a statute relate to  the  performance  of  a  public  duty  and  the  case  is  such that  to  hold  null and void acts done in neglect of  this  duty  would  work  serious  general inconvenience or injustice to  persons  who  have  no  control  over  those  entrusted with  the  duty and  at the same time would not promote  the main object of legislature, it has  been the  practice  of  the  Courts  to  hold such provisions to be directory  only,  the  neglect  of  them  not  affecting  the  validity  of  the  acts  done.’

17. A Constitution Bench of this Court in  State  of  U.P.  and  Ors.  v.  Babu  Ram  Upadhya [AIR 1961 SC 751] decided the  issue observing:

‘29…..For  ascertaining  the  real  intention  of  the  Legislature,  the  Court may consider,  inter  alia,  the  nature and the design of the statute,  and the consequences which would  follow  from  construing  it  the  one  way or the other, the impact of other  provisions whereby the necessity of  complying  with  the  provisions  in  question  is  avoided,  the  circumstance,  namely,  that  the  statute provides for a contingency of  the  non-compliance  with  the  provisions,  the  fact  that  the  non- compliance with the provisions is or

27

is not visited by some penalty,  the  serious or trivial consequences that  flow  therefrom,  and,  above  all,  whether the object of the legislation  will be defeated or furthered.’

22.  In  B.S.  Khurana and  Ors.  v.  Municipal Corporation of Delhi and Ors.  [(2000) 7 SCC 679], this Court considered  the  provisions  of  the  Delhi  Municipal  Corporation Act, 1957, particularly those  dealing  with  transfer  of  immovable  property  owned  by  the  Municipal  Corporation.  After  considering  the  scheme  of  the  Act  for  the  purpose  of  transferring the property belonging to the  Corporation,  the  Court  held  that  the  Commissioner could alienate the property  only  on  obtaining  the  prior  sanction  of  the  Corporation  and  this  condition  was  held to be mandatory for the reason that  the  effect  of  non-observance  of  the  statutory  prescription  would  vitiate  the  transfer  though  no  specific  power  had  been conferred upon the Corporation to  transfer the property.

23.  In  State  of  Haryana  and  Anr.  v.  Raghubir Dayal [(1995) 1 SCC 133], this  Court has observed as under:

‘5.  The  use  of  the  word  `shall'  is  ordinarily  mandatory  but  it  is  sometimes not so interpreted if the  scope  of  the  enactment,  or  consequences  to  flow  from  such  construction would not so demand.  Normally,  the  word  `shall'  prima  facie  ought  to  be  considered

28

mandatory but it is the function of  the  Court  to  ascertain  the  real  intention  of  the  legislature  by  a  careful  examination  of  the  whole  scope of the statute, the purpose it  seeks to serve and the consequences  that  would  flow  from  the  construction  to  be  placed  thereon.  The word `shall', therefore, ought to  be  construed  not  according  to  the  language  with  which  it  is  clothed  but  in  the  context  in  which  it  is  used  and  the  purpose  it  seeks  to  serve.  The  meaning  has  to  be  described  to  the  word  `shall;  as  mandatory  or  as  directory  accordingly. Equally, it is settled law  that when a statute is passed for the  purpose  of  enabling  the  doing  of  something  and  prescribes  the  formalities which are to be attended  for  the  purpose,  those  prescribed  formalities  which  are  essential  to  the validity of such thing, would be  mandatory.  However,  if  by  holding  them  to  be  mandatory,  serious  general  inconvenience  is  caused to  innocent persons or general public,  without  very  much  furthering  the  object of the Act, the same would be  construed as directory.’ ”

The Legislature in Sections 11A and 17(3A) of the Act has  

used the word ‘shall’  in contradistinction to the word ‘may’  

used  in  some  other  provisions  of  the  Act.   This  also  is  a

29

relevant  consideration  to  bear  in  mind while  interpreting  a  

provision.

The  distinction  between mandatory  and  directory  

provisions  is  a  well  accepted  norm  of  interpretation.  The  

general  rule  of  interpretation  would  require  the  word to  be  

given its own meaning and the word ‘shall’ would be read as  

‘must’ unless it was essential to read it as ‘may’ to achieve the  

ends of legislative intent and understand the language of the  

provisions. It is difficult to lay down any universal rule, but  

wherever the word ‘shall’ is used in a substantive statute, it  

normally would indicate mandatory intent of  the legislature.  

Crawford  on  ‘Statutory  Construction’  has  specifically  stated  

that language of the provision is not the sole criteria; but the  

Courts  should  consider  its  nature,  design  and  the  

consequences which could flow from construing it one way or  

the other.

Thus,  the  word  ‘shall’  would  normally  be  mandatory  

while the word ‘may’ would be directory. Consequences of non-

compliance would also be a relevant consideration. The word

30

‘shall’  raises  a  presumption that  the  particular  provision is  

imperative but this  prima facie inference may be rebutted by  

other  considerations  such  as  object  and  scope  of  the  

enactment  and  the  consequences  flowing  from  such  

construction.  Where  a  statute  imposes  a  public  duty  and  

proceeds to lay down the manner and timeframe within which  

the  duty  shall  be  performed,  the  injustice  or  inconvenience  

resulting from a rigid adherence to the statutory prescriptions  

may not be a relevant factor in holding such prescription to be  

only directory. For example, when dealing with the provisions  

relating to criminal law, legislative purpose is to be borne in  

mind for its proper interpretation. It is said that the purpose of  

criminal law is to permit everyone to go about their daily lives  

without fear of  harm to person or property and it  is in the  

interests  of  everyone  that  serious  crime  be  effectively  

investigated  and  prosecuted.  There  must  be  fairness  to  all  

sides. (Attorney General's Reference (No. 3 of 1999) (2001) 1 All  

ER  577  Reference  :  Justice  G.P.  Singh  on  ‘Principles  of  

Statutory  Interpretation’,  11th  Edition  2008).  In  a  criminal  

case,  the  court  is  required  to  consider  the  triangulation  of

31

interests taking into consideration the position of the accused,  

the victim and his or her family and the public.

The basic purpose of interpretation of statutes is further  

to aid in determining either the general object of the legislation  

or the meaning of the language in any particular provision. It  

is  obvious  that  the  intention  which  appears  to  be  most  in  

accordance  with  convenience,  reason,  justice  and  legal  

principles should,  in all  cases of  doubtful  interpretation,  be  

presumed to  be  the  true  one.  The  intention  to  produce  an  

unreasonable result is not to be imputed to a statute. On the  

other hand, it is not impermissible, but rather is acceptable, to  

adopt a more reasonable construction and avoid anomalous or  

unreasonable construction. A sense of the possible injustice of  

an interpretation ought not to induce Judges to do violence to  

the well settled rules of construction, but it may properly lead  

to  the  selection  of  one,  rather  than  the  other,  of  the  two  

reasonable interpretations. In earlier times, statutes imposing  

criminal  or  other  penalties  were  required  to  be  construed  

narrowly in favour of the person proceeded against and were

32

more rigorously applied. The Courts were to see whether there  

appeared any reasonable doubt or ambiguity in construing the  

relevant provisions. Right from the case of  R. v. Jones, ex p.   

Daunton [1963(1)  WLR 270],  the  basic  principles  state  that  

even statutes dealing with jurisdiction and procedural law are,  

if they relate to infliction of penalties, to be strictly construed;  

compliance  with  the  procedures  will  be  stringently  exacted  

from  those  proceedings  against  the  person  liable  to  be  

penalized and if  there is  any ambiguity or  doubt,  it  will  be  

resolved  in  favour  of  the  accused/such  person.  These  

principles have been applied with approval by different courts  

even in India. Enactments relating to procedure in courts are  

usually construed as imperative. A kind of duty is imposed on  

court  or  a  public  officer  when no  general  inconvenience  or  

injustice is caused from different construction. A provision of a  

statute  may  impose  an  absolute  or  qualified  duty  upon  a  

public  officer  which  itself  may  be  a  relevant  consideration  

while understanding the provision itself. (See ‘Maxwell on The  

Interpretation of Statutes’, 12th Edition by P. St. J. Langan and  

R. v. Bullock, [(1964)1 QB 481])

33

One school of thought has accepted that the word ‘shall’  

raises  a  presumption  that  the  particular  provision  is  

imperative,  while  the  other  school  of  thought  believes  that  

such presumption is merely prima facie, subject to rebuttal by  

the other considerations mentioned above.   For example, in  

M/s.  Sainik  Motors,  Jodhpur  &  Others  v.  The  State  of   

Rajasthan [AIR 1961 SC 1480], the word ‘shall’ has been held  

to be merely directory.

G.P. Singh in the same edition of the above-mentioned  

book, at page 409, stated that the use of the word ‘shall’ with  

respect to one matter and use of word ‘may’ with respect to  

another matter in the same section of a statute will normally  

lead  to  the  conclusion  that  the  word  ‘shall’  imposes  an  

obligation,  whereas  the  word  ‘may’  confers  a  discretionary  

power.  But that by itself is not decisive and the Court may,  

having regard to the context and consequences, come to the  

conclusion  that  the  part  of  the  statute  using  ‘shall’  is  also  

directory.   It is primarily the context in which the words are

34

used which will be of significance and relevance for deciding  

this issue.   

Statutes which encroach upon rights, whether as regards  

person or property,  are subject to strict construction in the  

same  way  as  penal  Acts.  It  is  a  recognized  rule  that  they  

should be interpreted, if possible, so as to respect such rights  

and if  there is  any ambiguity,  the  construction which is  in  

favour of the freedom of the individual should be adopted. (See  

‘Maxwell on The Interpretation of Statutes’, 12th Edition by P.  

St. J. Langan)

This Court in the case of Devinder Singh (supra) held that  

the Land Acquisition Act is an expropriatory legislation and  

followed the case of Hindustan Petroleum Corporation v. Darius   

Shapur  Chennai  and  Ors. [(2005)  7  SCC 627].  Therefore,  it  

should  be  construed strictly.  The Court  has  also  taken the  

view that even in cases of directory requirements, substantial  

compliance with such provision would be necessary.

35

If  I  analyze  the  above  principles  and  the  various  

judgments of this Court, it is clear that it may not be possible  

to  lay  down  any  straitjacket  formula,  which  could  

unanimously  be  applied  to  all  cases,  irrespective  of  

considering the facts,  legislation in question,  object of  such  

legislation, intendment of the legislature and substance of the  

enactment.  In my view, it will always depend upon all these  

factors as stated by me above.  Still, these precepts are not  

exhaustive and are merely indicative.  There could be cases  

where the word ‘shall’ has been used to indicate the legislative  

intent  that  the  provisions  should  be  mandatory,  but  when  

examined in light of the scheme of the Act, language of the  

provisions, legislative intendment and the objects sought to be  

achieved, such an interpretation may defeat the very purpose  

of  the  Act  and,  thus,  such  interpretation  may  not  be  

acceptable in law and in public interest.  Keeping in mind the  

language of the provision, the Court has to examine whether  

the  provision  is  intended  to  regulate  certain  procedure  or  

whether  it  vests  private  individuals  with  certain  rights  and  

levies a corresponding duty on the officers concerned.   The

36

Court  will  still  have  to  examine  another  aspect,  even  after  

holding that a particular provision is mandatory or directory,  

as the case may be, i.e., whether the effect or impact of such  

non-compliance  would  invalidate  or  render  the  proceedings  

void  ab  initio or  it  would  result  in  imposition  of  smaller  

penalties or in issuance of  directions to further protect and  

safeguard the interests of the individual against the power of  

the  State.   The  language  of  the  statute,  intention  of  the  

legislature and other factors stated above decide the results  

and impacts of non-compliance in the facts and circumstances  

of  a  given  case,  before  the  Court  can  declare  a  provision  

capable of  such strict construction,  to term it as absolutely  

mandatory or directory.

Having  analysed  the  principles  of  statutory  

interpretation,  I  will  now  refer  to  the  provisions  of  Section  

17(3A) of the Act.  Section 17 of the Act vests the appropriate  

Government with special powers to be exercised in cases of  

urgency.  This provision falls within Part II of the Act.  Part II  

of the Act deals with the entire scheme of acquisition of land

37

by the State, right from the stage of issuance of a notification  

under  Section  4  of  the  Act  till  making  of  an  award  taking  

possession of acquired land and its consequential vesting in  

the State.   However, to some extent, the provisions of Section  

17 of the Act are an exception to the provisions under Sections  

4  to  16  of  the  Act.   The  distinguishing  features  of  normal  

acquisition  are that  after  the  issuance of  notification under  

Section 4 of the Act, the State must provide an opportunity to  

the owners of the land to object to the acquisition in terms of  

Section 5A of the Act, issue a declaration under Section 6 of  

the Act, issue notice under Section 9 of the Act and determine  

compensation by making an award under Section 11 of the  

Act.  However, under the scheme of Section 17 of the Act, the  

Government  can  take  possession  of  the  property  on  the  

expiration of 15 days from publication of notice mentioned in  

Section 9(1) of the Act.  Furthermore, the provisions of Section  

5 of the Act, i.e., the right of the owner to file objection can be  

declared  to  be  inapplicable.   Besides  these  two  significant  

distinctions, another important aspect that the land vests in  

the  Government  under  Section 16 of  the  Act  only  after  the

38

award  is  made  and  possession  of  the  land  is  taken,  while  

under Section 17(1), at the threshold of the acquisition itself,  

the land could vest absolutely in the Government free from all  

encumbrances.  The possession of the acquired property has  

to be taken by the Collector in terms of Sections 17(2) and  

17(3) of the Act.  Section 17(3A) of the Act, as already noticed,  

was  introduced  by  the  Amendment  Act  68  of  1984 for  the  

purposes of  safeguarding the interests of  the claimants and  

required  the  payment  of  80  per  cent of  the  estimated  

compensation before taking possession.  At this stage itself, it  

will be useful to refer to the relevant provisions of Section 17  

of the Act.

Section 17 reads as under:

“17. Special powers in case of urgency. –  (1)  In  cases  of  urgency  whenever  the  appropriate  Government,  so  directs,  the  Collector,  though  no  such  award  has  been  made,  may,  on  the  expiration  of  fifteen days  from the  publication  of  the  notice  mentioned  in  section  9,  sub- section  (1)  take  possession  of  any  land  needed for a public purpose. Such land  shall  thereupon  vest  absolutely  in  the  Government, free from all encumbrances.

39

(2)  xxxxxx

(3) xxxxxx

(3A) Before taking possession of any land  under sub-section (1) or sub-section (2),  the  Collector  shall,  without  prejudice to  the provisions of sub-section (3)(a) tender  payment  of  eighty  per  centum  of  the  compensation for such land as estimated  by him to the person interested entitled  thereto,  and  (b)  pay  it  to  them,  unless  prevented  by  some  one  or  more  of  the  contingencies  mentioned  in  section  31,  sub-section (2),and where the Collector is  so  prevented,  the  provisions  of  section  31,  sub-section  (2),  (except  the  second  proviso thereto), shall apply as they apply  to  the  payment  of  compensation  under  that section.

(3B) The amount paid or deposited under  section (3A), shall be taken into account  for  determining  the  amount  of  compensation  required  to  be  tendered  under section 31, and where the amount  so  paid  or  deposited  exceeds  the  compensation  awarded  by  the  Collector  under section 11, the excess may, unless  refunded  within  three  months  from the  date of Collector's award, be recovered as  an arrear of land revenue.

(4) In the case of any land to which, in  the  opinion  of  the  appropriate  Government,  the  provisions  of  sub- section  (1)  or  sub-section  (2)  are  applicable,  the  appropriate  Government

40

may direct that the provisions of section  5A  shall  not  apply,  and,  if  it  does  so  direct, a declaration may be made under  section 6  in  respect  of  the  land at  any  time after the date of  the publication of  the  notification  under  section  4,  sub- section (1).”

Section 17(3A) of the Act makes it obligatory on the part  

of the authority concerned to tender/pay 80 per cent of the  

compensation  for  the  acquired  land,  as  estimated  by  the  

Collector,  to  the  persons  interested  and  entitled  thereto;  

unless prevented by any of the contingencies mentioned under  

Section 31(2) of the Act.  The use of the word ‘shall’ in Section  

17(3A)  indicates  that  the  enactors  of  law  desired  that  the  

above mentioned procedure should be complied with by the  

authority concerned prior to taking of  possession.    That is  

why the legislature has even taken care to make a provision  

for deposit of due compensation in court in terms of Section  

31(2)  of  the  Act,  where  an  authority  is  prevented  from  

tendering the amount to the claimants for reasons stated in  

Section  31(1)  of  the  Act.   80  per  cent of  the  estimated  

compensation  is  to  be  deposited  in  the  Court  to  which

41

reference under Section 18 of the Act would lie.  This clearly  

shows that there is statutory obligation upon the authorities  

concerned to tender to the interested persons, compensation  

in accordance with law.  Deposit of money, certainly, is the  

condition precedent to taking of possession as is amply clear  

from the language ‘before taking possession of any land’.  The  

amount so deposited or paid in terms of Section 17(3A) of the  

Act will be taken into account for determining the amount of  

compensation required to be tendered under Section 31 of the  

Act and provides for the recovery of amounts if it exceeds the  

awarded amount.  Section 17(3A) unambiguously provides a  

complete  mechanism  of  taking  possession  and  the  

requirement  of  payment  of  80  per  cent of  estimated  

compensation to the claimants.

Now,  I  would  examine  WHAT  ARE  THE  

CONSEQUENCES of default in compliance to the provisions of  

Section 17(3A) of the Act.  The said Section is completely silent  

on such consequences. Where the Legislature has, in specific  

terms, provided for the extent of payment, mode of payment

42

and even the difficulties which are likely to arise, i.e, where a  

person may not be entitled to receive the compensation or in  

any other eventuality such as where the compensation cannot  

be paid for the reasons stated in Section 31(1) of the Act, there  

the Legislature in its wisdom has provided no contingencies  

and/or consequences of non-deposit of this money.  This is in  

complete  contradistinction  to  the  provisions  contained  in  

Sections 6 and 11A of  the Act.   Section 6 provides that no  

declaration shall be issued where the period specified in the  

first proviso to Section 6(1) of the Act has expired.  In other  

words, it spells out the consequences of failure to do an act  

within the stipulated period. Similarly, Section 11A of the Act  

provides that the acquisition proceedings shall lapse where the  

Collector fails to make an award within a period of two years  

from the date of publication of declaration under Section 6 of  

the Act.

Thus,  the  legislative  intent  is  very  clear.   Keeping  the  

objects and reasons for amendment in mind, the Act strives  

for a fair balance between the rights of private individuals and

43

the power of eminent domain of the State and also attempts to  

ensure  expeditious  disbursement  of  compensation,  as  

determined  in  accordance  with  law,  to  the  claimants.  The  

legislature  has  provided  for  every  contingency  for  tendering  

payment, while remaining silent about consequences flowing  

from default under some other provisions.  Sections 11A and  

17(3A) of the Act are clear illustrations of clarity and purpose  

in  legislative  intent.   When  the  framers  of  law  have  not  

provided for any penal consequences for default in compliance  

to Section 17(3A), then it will be uncalled for to provide such  

consequences by judicial interpretation. While interpreting the  

provisions  for  compensation,  the  Court  can  provide  such  

interpretation  as  would  help  to  bridge  the  gaps  left  by  the  

Legislature, if any, in implementation of the provisions of the  

Act.   But  it  will  hardly  be  permissible  for  the  Court  to  

introduce  such  consequences  by  way  of  judicial  dicta,  like  

requiring  lapse  of  acquisition  proceedings.   This  is  not  a  

matter covered by the principles of judicial interpretation.

44

It is a well settled canon of statutory interpretation that  

the  courts  would  neither  add  nor  subtract  from  the  plain  

language of the statutory provision.  In the present case also,  

there  is  hardly  any  justification  for  the  courts  to  take  any  

contrary  view.   Once the  land has vested in the  State  and  

there being no provision for re-vesting the land in the original  

owners  under  the  provisions  of  the  Act,  then  it  will  be  in  

consonance with the scheme of the Act and legislative intent to  

give an interpretation that would allow provisions of Section  

17(1)  to  operate  without  undue  impediment  and  keep  the  

vesting of land in the State intact.  Otherwise, in some cases  

the purpose for which such lands were acquired might stand  

frustrated,  while  in  other  cases  the  purpose  of  acquisition  

might  have  already  been  achieved  and,  therefore,  divesting  

State of its title and possession in the acquired land will be  

incapable of performance.  Under such circumstances, then,  

to interpret Section 17(3A) of the Act to be so mandatory in its  

absolute terms that the non-payment of money would result in  

vitiating or lapsing entire acquisition proceedings, can hardly  

be  justified  on  the  strength  of  any  known  principle  of

45

interpretation of statutes.  This question arises more often, as  

the provisions of Section 17 of the Act are being invoked by the  

Union of India and State Governments very frequently, so, the  

consequences of this default, within the framework of law and  

anything short of  invalidation of the acquisition proceedings  

should be stated by the court with reference to the facts and  

circumstances  of  each  case.   It  is  a  complete  safeguard  

provided to  the  land owner  inasmuch as  the  compensation  

stipulated under Section 17(3A) of the Act should be paid in  

terms of  the provisions of  the Act so that  the owner is  not  

made to suffer on both counts i.e. he is deprived of his land as  

well  as  compensation.   It  will  be  unfair  for  the  authorities  

concerned  not  to  pay  the  compensation  as  contemplated  

under the provisions of the Act.  It would be just and fair to  

read into the provisions of the Section 17(3A) as imposing an  

obligation  on  the  part  of  the  authorities  concerned/the  

Collector  to pay the  compensation within the time specified  

under  Section  17(3A).   Of  course,  no  specific  time,  within  

which the payment has to be made in terms of Section 17(1)  

has been stated in the provision.  But, it is a settled principle

46

of  law that  wherever specific  limitations are not  stated,  the  

concept  of  ‘reasonable  time’  would  become  applicable.   So,  

even if it is argued that there is no specific time contemplated  

for  payment/deposit  of  80  per  cent of  the  estimated  

compensation,  even then the claimants would be entitled to  

receive the amount expeditiously and in any case within very  

reasonable  time.  If  the  authorities  are  permitted  to  take  

possession  of  the  land  without  payment  of  the  amounts  

contemplated under Section 17(3A) of the Act, then it would  

certainly amount to abuse of power of  eminent domain within  

its known legal limitations.  The authorities should discern the  

distinction spelt out under Section 16 of the Act on the one  

hand and Section 17(1) read with Section 17(3A) of the Act on  

the other.

Let me examine the judgment of this Court dealing with  

the provisions of Section 17(3A) of the Act.  The judgments of  

different High Courts have been brought to the notice of this  

Court,  taking  divergent  views  on  the  question  whether  the  

provisions of Section 17(3A) are mandatory or directory.  Some

47

of  these  judgments,  I  would  shortly  refer  to,  if  necessary.  

However,  I  may  notice  that  none  of  these  judgments  have  

specifically discussed the consequences of  non-adherence to  

the provisions of Section 17(3A) of the Act.  A Bench of Delhi  

High Court in the case of  Banwari  Lal  & Sons Pvt.  Ltd.  vs.   

Union  of  India  &  Ors.,  [1991  (1)  DRJ  (Suppl.)  317  (Delhi  

Reported  Journal)],  whilst  quashing  the  notification  issued  

under  Section  4  read  with  Section  17(1)  of  the  Act  on  the  

ground of  factual  lack of  urgency  for  acquisition,  held  that  

there was non-compliance to the provisions of Section 17(3A)  

of the Act.  Of course, the High Court took the view that the  

notification issued under Section 4 read with Section 17(1) of  

the  Act  was  not  maintainable  and while  quashing  the  said  

notification, it also held that there was violation of provisions  

of Section 5A of the Act and, in fact, no urgency existed.  There  

was  no  direct  discussion  as  to  whether  the  provisions  of  

Section 17(3A) of the Act are mandatory or directory. However,  

this  judgment  neither  provides  any  reasoning  nor  actually  

states the consequences of non-compliance with the provisions  

of Section 17(3A).  For these reasons, this judgment is of no

48

help to the parties appearing in the present appeal.   Against  

the judgment of Delhi High Court in Banwari Lal  (supra), the  

Special  Leave  Petition  preferred  before  this  Court  was  

dismissed at the admission stage itself.  

In the case of Union of India & Ors. v. Krishan Lal Arneja  

&  Ors.,  [(2004)  8  SCC  453],  a  part  of  the  acquisition  was  

challenged and writ petitions had been filed for quashing the  

notification dated 6th March, 1987 issued under Section 4 and  

Section 17(1) of the Act by Banwari Lal and other owners of  

the  acquired  lands.  These  writ  petitions  were  allowed by  a  

learned Single Judge of the High Court, appeal against which  

was dismissed by the Division Bench of the High Court. While  

considering the appeal against the order of the Division Bench,  

this Court also dismissed the same. In the appeal, arguments  

had also been advanced that since the Government before this  

Court had not made the payment of 80 per cent of estimated  

compensation  in  terms  of  Section  17(3A)  of  the  Act,  the  

acquisition  had  lapsed.  However,  in  paragraph  36  of  that  

judgment, this Court declined to deal with these contentions

49

as it had dismissed the appeal on other grounds. The Court  

incidentally observed that it was not a fair stand to be taken  

by the State before the Court to argue that it could de-notify  

the acquired land on the plea that it had failed to comply with  

the statutory provisions of the Act.  In short, the question in  

controversy in the present case was not actually pronounced  

upon by the Court in that case.

The question of the provisions of Section 17(3A) of the Act  

being mandatory or directory again fell for consideration before  

this Court in the case of  Tika Ram & Ors. v. State of U.P. &   

Ors.  [(2009)  10  SCC  689].  In  this  case,  challenge  to  the  

constitutional validity of the provisions of Section 17 was also  

made.  The Court, while holding that the said provisions are  

constitutional,  also  declared  that  the  provisions  of  Section  

17(3A) were not mandatory and their non-compliance would  

not  vitiate  the  whole  acquisition  proceedings.  The  following  

paragraphs of the judgment are relevant:

“91. However, the question is as to what  happens when such payment is not made

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and  the  possession  is  taken.  Can  the  whole acquisition be set at naught?

92. In  our  opinion,  this  contention  on  the  part  of  the  appellants  is  also  incorrect. If we find fault with the whole  acquisition  process  on  account  of  the  non-payment  of  80%  of  the  compensation, then the further question  would be as to whether the estimation of  80% of compensation is correct or not. A  further controversy can then be raised by  the landlords that what was paid was not  80% and was short of 80% and therefore,  the acquisition should be set at naught.  Such  extreme  interpretation  cannot  be  afforded because indeed under Section 17  itself,  the  basic  idea  of  avoiding  the  enquiry under Section 5-A is  in view of  the urgent need on the part of the State  Government for the land to be acquired  for  any  eventuality  discovered by  either  sub-section  (1)  or  sub-section  (2)  of  Section 17 of the Act.

93.

The only question that  would remain is  that  of  the  estimation  of  the  compensation.  In  our  considered  view,  even if the compensation is not paid or is  short of  80%, the acquisition would not  suffer.  One  could  imagine  the  unreasonableness  of  the  situation.  Now  suppose,  there is  state  of  emergency as  contemplated in Section 17(2) of the Act  and the compensation is not given, could the whole acquisition come to a naught?  It would entail serious consequences.

51

94.

This situation was considered, firstly, in  Satendra Prasad  Jain  v.  State  of  U.P. It  was held therein that once the possession  is  taken  as  a  matter  of  fact,  then  the  owner is divested of the title to the land.  The Court  held that  there  was then no  question  of  application  of  even  Section  11-A. Commenting upon Section 11-A, it  was held that that the Section could not  be  so  construed  as  to  leave  the  Government  holding  title  or  the  land  without  an  obligation  to  determine  the  compensation, make an award and pay to  the  owner  the  difference  between  the  amount of the award and the amount of  the 80% of the estimated compensation.  The three-Judge Bench of the Court took  the  view  that  even  where  80%  of  the  estimated compensation was not paid to  the landowners, it did not mean that the  possession was taken illegally or that the  land did not vest in the Government. In  short,  this  Court  held  that  the  proceedings  of  acquisition  are  not  affected  by  the  nonpayment  of  compensation.  In  that  case,  the  Krishi  Utpadan  Mandi  Samiti,  for  which  the  possession was made,  sought  to  escape  from the  liability  to make the  payment.  That was not allowed. The Court, in para  17, held as under : (Satendra Prasad Jain  case, SCC p. 375, para 17)

"17.  In the instant case,  even that  80% of the estimated compensation  was  not  paid  to  the  appellants  although  Section  17  (3-A)  required

52

that it should have been paid before  possession  of  the  said  land  was  taken but that does not mean that  the possession was taken illegally or  that the said land did not thereupon  vest in the first respondent. It is, at  any  rate,  not  open  to  the  third  respondent, who, as the letter of the  Special  Land  Acquisition  Officer  dated  27.6.1990  shows,  failed  to  make  the  necessary  monies  available  and  who  has  been  in  occupation  of  the  said  land  ever  since  its  possession  was  taken,  to  urge that the possession was taken  illegally and that, therefore, the said  land  has  not  vested  in  the  first  respondent and the first respondent  is  under  no obligation to  make an  award."

95. Further, in a judgment of this Court  in Pratap v. State of Rajasthan, a similar  view was reported. That was a case under  the  Rajasthan  Urban  Improvement  Act,  1987,  under  which  the  acquisition  was  made  using  Section  17  of  the  Act.  The  Court  took  the  view  that  once  the  possession was taken under Section 17 of  the  Act,  the  Government  could  not  withdraw  from  that  position  under  Section  18  and  even  the  provisions  of  Section 11-A were not attracted. That was  of course a case where the award was not  passed under Section 11-A after taking of  the  possession.  A  clear-cut  observation  came to be made in that behalf in para  12, to the effect that the non-compliance  with  Section  17  of  the  Act,  insofar  as

53

payment  of  compensation  is  concerned,  did  not  result  in  lapsing  of  the  land  acquisition  proceedings.  The  law  laid  down by this  Court in Satendra Prasad  Jain v. State of U.P. was approved. The  Court  also  relied  on  the  decision  in  P.  Chinnanna  v.  state  of  A.P.  and  Awadh  Bihari  Yadav  v.  State  of  Bihar,  where  similar view was taken regarding the land  acquisition  proceedings  not  getting  lapsed. The only result that may follow by  the non-payment would be the payment  of interest, as contemplated in Section 34  and  the  proviso  added  thereto  by  the  1984 Act. In that view, we do not wish to  further refer the matter, as suggested by  Shri Trivedi, learned Senior Counsel and  Shri Qamar Ahmad, learned counsel for  the  appellants.  Therefore,  even  on  the  sixth  question,  there  is  no  necessity  of  any reference.”

As  is  obvious  from the  above  paragraphs,  there  is  an  

indefeasible obligation on the part of the Government to make  

the payment in terms of Section 17(3A) of the Act but non-

compliance  thereto  could  not  result  in  vitiation  of  the  

acquisition proceedings. The observations made by this Court  

in the case of Satendra Prasad Jain (supra), in paragraph 17,  

suggest that the Government was required to hold title to the  

acquired  land  coupled  with  its  obligation  to  determine  the

54

compensation, make the award and then to pay to the owner  

the  difference  between  the  amount  of  80  per  cent  of  the  

estimated compensation and the amount finally  determined.  

The  Court  even  went  to  the  extent  of  observing  that  non-

payment of 80 per cent of the estimated compensation per se  

does not mean that possession was taken illegally or that the  

said  land  did  not  thereupon  vest  in  the  Government.  This  

decision does provide any reasoning  and conclusions which  

support  the  view  that  Section  17(3A)  of  the  Act  is  not  a  

mandatory provision. Following this judgment, another Bench  

of this Court in the case of Pratap & Anr. v. State of Rajasthan  

[(1996) 3 SCC 1] took the same view.  

However,  another  Bench  of  this  Court,  in  the  case  of  

Rajender Kishan Gupta v.  Union of  India [(2010) 9 SCC 46],  

had made certain observations which were at some variance to  

the dicta of this Court in the cases referred above.  In that  

case,  neither  the  validity  nor  the  effects  of  non-compliance  

with  Section  17(3A)  of  the  Act  were  directly  in  issue.  The  

challenge was to a notification issued under Section 4(1) of the

55

Act for the land which was subsequently needed for the Metro  

Project  in  Delhi.  The  challenge  was  primarily  based  on the  

ground that the land could only be acquired under the Metro  

Rail Construction Works Act, 1978 and the emergency clause  

could not be used as a way to dispense with enquiry under  

Section 5A of the Act. The Court, while dismissing the appeal  

preferred by  the  claimants  and rejecting  the  contentions  in  

paragraph 29, made the following observations :

“In the light of the above discussion, we  are satisfied that the existence of public  purpose  and  urgency  in  executing  the  project before the Commonwealth Games,  the  adjoining  land  belonging  to  DDA  being forest land as per the notification  and also of the fact that the respondents  have fully  complied with the mandatory  requirements including deposit of 80% of  the  compensation  amount,  we  are  in  entire agreement with the stand taken by  the respondents as well as the conclusion  of the High Court.”

The  Bench,  dealing  with  the  matter,  did  use  the  

expression ‘mandatory requirements, including deposit of 80  

per  cent  of  the  compensation  amount’,  but  there  was  no  

discussion  or  reasoning  of  the  effects  and  consequences  of

56

such default,  anywhere in the judgment, before it  has been  

concluded that the said provisions are mandatory.    Thus,  

these observations do not come to the aid of the appellants in  

challenging the entire acquisition proceedings on this ground.

Consistent with the view expressed by this Court in the  

cases referred (supra),  I  am of  the considered view that the  

provisions  of  Section  17(3A)  of  the  Act  are  not  mandatory.  

Such a conclusion can safely be arrived at, even for the reason  

that  the  Court  would  have  to  read  into  the  provisions  of  

Section 17(3A) consequences and a strict period of limitation  

within which amount should be deposited, which has not been  

provided  by  the  Legislature  itself  in  that  section.   The  

consequences and contingencies arising from non-compliance  

of the said provisions have not been stated in the Act. Once  

the land has vested in the Government, non-compliance with  

the  obligation  of  payment  of  80  per  cent  of  estimated  

compensation would not render the possession taken under  

Section  17(1)  as  illegal.  The  land  cannot  be  re-vested  or  

reverted back to the claimants as no provisions under the Act

57

so prescribe. Furthermore, if the interpretation put forward by  

the appellants is accepted, it would completely frustrate the  

objects  and  purpose  of  the  Act,  rather  than  advancing  the  

same. The expression ‘shall’ used in Section 17(3A) has to be  

understood  in  its  correct  perspective  and  is  not  to  be  

construed  as  suggestive  of  the  provisions  being  absolutely  

mandatory in its application.  Inter alia for these reasons and  

as  per  the  above  discussions,  I  hold  that  the  provisions  of  

Section  17(3A)  are  not  mandatory.  They  are  directive  

provisions, though their compliance is necessary in terms of  

the Act.

Having held as above, I hasten to add that the obligation  

on  the  part  of  the  Government  or  concerned  authority  to  

deposit the amount prior to taking possession under Section  

17(1)  of  the  Act  should  essentially  be  complied  with.  The  

amount of 80 per cent of the estimated compensation in terms  

of  Section  17(3A)  should  be  deposited.  Once   we  read  the  

provisions  of  Sections  17(1)  and  17(3A)  conjunctively,  it  

implies that the amounts are to be deposited within 15 days

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from the publication of the notice in terms of Section 9(1) of  

the Act and before taking of possession of the acquired land.  

The Legislature has sufficiently indicated that the payment of  

the due 80 per cent of compensation should be made at the  

earliest  and,  particularly,  before  possession  is  taken.  Non-

compliance  of  the  provisions  of  Section  17(3A)  would  not  

vitiate the acquisition proceedings, but depending on the facts  

of a given case, the payment should be made within the time  

indicated and in any case within a reasonable time, and the  

claimant  should  then  be  entitled  to  additional  benefits  for  

such non-compliance. The Court would fill a part of the gap  

which has remained unfilled by the Legislature.

Irrespective  of  whether  the  provision  is  held  to  be  

mandatory  or  directory,  compliance  with  its  substance  is  

equally important.  In either case, the authority entrusted with  

a duty is not absolved of its obligation to perform the specified  

duty or obligation in the manner stated in law.  It is primarily  

the consequences which result from non-performance of duty,  

which  are  of  significance  in  determining  the  impact  of

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mandatory  or  directory  nature  of  a  provision.  Normally,  in  

both  cases,  some  consequences  should  flow  from  non-

performance.   Even  if  the  provisions  of  Section  17(3A)  are  

directory, as held by me above, the deposit of 80 per cent of  

estimated compensation within the period of limitation i.e. 15  

days and prior  to  taking  possession of  the  land,  has  to  be  

made.  There is no ambiguity in this requirement.  Thus, it  

shall  be  the  duty  of  the  Court  to  fill  the  lacuna  (i.e.,  the  

consequences of  non-payment of  compensation)  to complete  

the chain of the legislative scheme contained in Section 17 of  

the Act.  Having taken recourse to the emergency provisions  

and having taken possession of the land, the Government and  

its authorities cannot be permitted to defer the payment of the  

requisite  amount,  in  terms  of  Section  17(3A)  of  the  Act,  

indefinitely or for  an unduly long period.  A responsibility  is  

cast upon the authorities concerned to make payments within  

time and not unduly cause inconvenience and harassment to  

persons interested in the compulsorily acquired land and who  

have been deprived of possessory benefits also.  Persons who  

are so deprived of their land and possessory benefits thereof,

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are not in a position to carry out agricultural activity or derive  

any other benefit  as they might have been deriving prior to  

compulsory  acquisition/taking  possession  of  the  land.   In  

other words, it is a case of deprivation of property and to some  

extent deprivation of sources of income.  Without hesitation,  

the  claimants/owners  of  land  should  be  and  ought  to  be  

entitled  to  certain  additional  benefits  within  the  legislative  

framework of the Act.  Certain additional and interest benefits  

are provided under Sections 23(1A), 23(2), 28 and 34 of the  

Act. The legislature has even taken care of providing higher  

rates of interest where the possession of the land has already  

been taken and compensation has not been paid or deposited  

within the specified time or in the manner prescribed under  

Section 34 of the Act.  Proviso to this Section states that where  

the compensation payable, or any part thereof, has not been  

paid or deposited within a period of one year from the date on  

which possession is taken, interest at the rate of 15 per cent  

per annum shall be payable from the date of expiry of the said  

period of one year, calculated on the amount of compensation  

or part thereof which has not been paid or deposited before

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the date of such expiry, until the time such payment is finally  

made. We have to read the provisions of Section 34 together  

with the provisions of  Sections 17(1) and 17(3A) of  the Act.  

They have to be construed harmoniously, keeping in mind the  

object sought to be achieved by a conjoint  reading of  these  

provisions.  The  expression  ‘before  taking  possession  of  the  

land’ has been used in Section 17 read with Section 17(3A)  

and in Section 34 as well.  Once the Government has invoked  

the  emergency  provisions,  it  is  pre-supposed  that  the  

Government needs the land urgently and, in its wisdom, has  

decided  that  it  is  not  in  public  interest  to  go  through  the  

normal procedure prescribed for acquisition and payment of  

compensation under Part II of the Act.  It requires immediate  

possession  of  the  land  for  achievement  of  the  purpose  for  

which  land  was  required.   As  the  Government  would  take  

possession  by  depriving  the  land  owners  of  some  of  their  

rights,  as would have been available  to them under normal  

acquisition  procedure,  the  Legislature  has  created  special  

safeguards in their  favour.   Firstly,  they would be given 15  

days notice prior to taking of possession of the land (Section

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9(1)  of  the  Act).  Secondly,  80  per  cent  of  the  estimated  

compensation shall be paid to them in terms of Section 17(3A)  

of  the  Act,  before  the  possession  is  taken.   Thus,  the  

Legislature has balanced the rights and obligations between  

the parties.   Section 34,  therefore,  cannot be read so as to  

destroy  the  protections  or  safeguards  provided  to  

claimants/owners  of  the  land under  Section  17  of  the  Act.  

These  provisions  must  be  read  harmoniously.   These  

provisions should  be construed so as to give  benefit  to  the  

owners  of  the  land  against  compulsory  acquisition,  rather  

than  accepting  an  interpretation  which  would  defeat  the  

benefits intended by the Legislature.  The Legislature was fully  

aware of the provisions of Section 34 while introducing Section  

17(3A) into the Act, as both the provisions were introduced by  

the same Amending Act of 1984.  This clearly demonstrates  

the  legislative  intent  that  the  protections  specified  under  

Section  17(1)  would  operate  in  their  own  field  and  the  

provisions of Section 34 would also apply in its own sphere.  It  

will  be  unfair,  if  the  Government  takes  possession  of  the  

property within 15 days of the notice issued under Section 9(1)

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(as is contemplated under Section 17(1) of the Act) and does  

not make payment of compensation for a long period, with no  

additional liability whatsoever. It appears to me that this is not  

the legislative intent that the Government would not be liable  

to pay higher rate of interest where it has taken possession of  

the land in exercise of its powers under Section 17 of the Act.  

It will be unfair if the liability to pay higher rate of interest in  

terms of Section 34 would arise only after a period of one year  

from  the  date  of  possession  even  in  cases  of  emergent  

acquisition.  Such an interpretation may result in frustrating  

the balance sought to be created by the Legislature. For these  

reasons, I am of the considered view that the statutory benefit  

contained in Section 34 of the Act should be made applicable  

to the provisions of Section 17(1) read with Section 17(3A) in  

the  manner  that  it  would  give  the  requisite  benefit  to  the  

owners/claimants  of  the  land  rather  than  deprive  them  of  

both,  their  land and income, without  any additional  benefit  

despite non-compliance of the provisions of the Act.  Thus, the  

owners/claimants  should  be  entitled  to  receive,  on  the  

strength of  these  provisions  and alike,  the  interest  payable

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under the proviso to Section 34 i.e. interest at the rate of 15  

per cent per annum from the date of expiry of the period of 15  

days  as  stated  under  Section  17(1)  and  from  taking  of  

possession of the land from the owners/persons interested in  

the  land  till  payment  of  compensation  in  terms  of  Section  

17(3A) of the Act.

These conditions have to be satisfied cumulatively and  

not alternatively, to give rise to the liability to pay interest of  

15 per cent from the date afore-stated.  This approach that I  

am adopting  is  restricted  in  application  to  the  acquisitions  

made by the Government in exercise of its emergency powers  

under  Section  17  of  the  Act.   Section  34  would  otherwise  

operate in its own sphere and only after the lapse of the period  

specified  in  the  proviso.  The  conclusion  of  the  above  

discussion  is  that  non-compliance  of  provisions  of  Section  

17(1)  read  with  Section  17(3A)  would  not  render  the  

acquisition proceedings invalid or void ab initio in law however,  

liability to pay interest at the rate of 15 per cent per annum  

would arise from the date and for the period afore-noticed.  

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Do the provisions of Section 11A apply to the acquisition  proceedings commenced by the Government in exercise of  its powers of urgency under Section 17 of the Act?

I have already noticed that Section 11A of the Act was  

introduced into the statute book by the Legislature vide Land  

Acquisition (Amendment) Act (68 of 1984).  This provision was  

introduced primarily to provide safeguards and to secure the  

interests  of  owners/persons  interested,  whenever  their  land  

was acquired under the provisions of the Act.  Section 11A of  

the Act reads as under :

“11A.  Period  within  which  an  award  shall  be  made.—(1)  The  Collector  shall  make an award under section 11 within a  period of two years from the date of the  publication of  the  declaration and if  no  award  is  made  within  that  period,  the  entire  proceedings for  the acquisition of  the land shall lapse:

Provided  that  in  a  case  where  the  said  declaration has been published before the  commencement  of  the  Land  Acquisition  (Amendment) Act, 1984, the award shall  be made within a period of two years from  such commencement.

Explanation.-In computing the  period of  two years referred to in this section the  period  during  which  any  action  or  proceeding to be taken in pursuance of

66

the said declaration is stayed by an order  of a Court shall be excluded.”

A  bare  reading  of  the  above  provision  shows  that  the  

Legislature places an obligation upon the Collector to make an  

award at the earliest. Wherever the award under Section 11 of  

the Act has not been made within two years from the date of  

publication  of  the  declaration,  the  entire  proceedings  for  

acquisition of land shall lapse.  Explanation to Section 11A of  

the Act further excludes from this period, any period during  

which any action or proceeding, to be taken in pursuance of  

the said declaration, is stayed by an order of a Court which  

had  been  in  force.   Exclusion  of  no  other  period  is  

contemplated under this provision.  Thus, a definite intention  

of the framers of law is clear that the award should be made at  

the earliest and, in any case, within a maximum period of two  

years from the declaration under Section 6 of the Act, if the  

acquisition proceedings are to survive.  The acquisition under  

the Act being compulsory acquisition, a safeguard or right has  

been provided to the private party against the State. Thus, the  

statute imposes a duty upon the State to act within time and

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also provides for consequences that shall ensue in the event of  

default.   These  consequences  are  of  a  very  serious  nature,  

whereby the entire acquisition proceedings shall stand lapsed.  

This  would  render  the  land  free  from  acquisition  or  any  

restriction and title over the land would stand reverted to the  

owners/persons interested.

I  have  already  discussed in  some detail  the  principles  

which will help the Court in determining whether a provision  

is directory or mandatory.  It is clear from the substance of the  

language  and from the  intention  of  the  legislature  that  the  

right created in favour of the citizen and the duties imposed on  

the State should be construed strictly.  Section 11A of the Act  

provides for discharge of obligations within the specified time  

and there are serious consequences of  such non-fulfillment.  

This would clearly lead to the conclusion that the provisions of  

Section 11A of the Act are capable of strict construction and  

are  mandatory  in  their  application.   In  number  of  cases,  

including  the  case  of  Mohan  & Anr. v.  State  of  Maharahtra  

[(2007) 9 SCC 431], this Court has already held that Section

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11A of the Act is mandatory.  This view, with respect, and for  

the reasons recorded above, I follow.   

A  three-Judge  Bench  of  this  Court  in  the  case  of  

Satendra  Prasad  Jain (supra)  went  further  to  specifically  

consider the question as to whether the provisions of Section  

11A of the Act were attracted and, if so, whether they should  

be strictly construed and where the possession of the acquired  

land is taken and it is vested in the Government under Section  

17 of the Act, whether the acquisition proceedings could lapse  

in terms of Section 11A of the Act.  Answering the question in  

the negative, the Court stated that the Government could not  

withdraw from the acquisition under Section 48 of the Act and  

claim the benefit of its own default in not making an award  

within  the  period  of  two  years.   The  Court  laid  down  the  

following dictum:

“15. Ordinarily, the Government can take  possession  of  the  land  proposed  to  be  acquired  only  after  an  award  of  compensation in respect thereof has been  made under Section 11. Upon the taking  of  possession  the  land  vests  in  the  Government, that is to say, the owner of  the land loses to the Government the title

69

to it. This is what Section 16 states. The  provisions of Section 11-A are intended to  benefit  the  landowner  and  ensure  that  the award is made within a period of two  years  from  the  date  of  the  Section  6  declaration.  In  the  ordinary  case,  therefore, when Government fails to make  an  award  within  two  years  of  the  declaration under Section 6, the land has  still not vested in the Government and its  title  remains  with  the  owner,  the  acquisition proceedings are still  pending  and, by virtue of the provisions of Section  11-A, lapse. When Section 17(1)  is  applied  by  reason  of  urgency,  Government takes possession of the land  prior to the making of the award under  Section 11 and thereupon the  owner  is  divested of the title to the land which is  vested in the Government. Section 17(1)  states so in unmistakable terms. Clearly,  Section 11-A can have no application to  cases  of  acquisitions  under  Section  17  because the lands have already vested in  the Government and there is no provision  in the said Act by which land statutorily  vested in  the  Government  can revert  to  the owner.

16.  Further,  Section  17(3-A)  postulates  that the owner will be offered an amount  equivalent to 80 per cent of the estimated  compensation  for  the  land  before  the  Government takes possession of it under  Section 17(1). Section 11-A cannot be so  construed  as  to  leave  the  Government  holding  title  to  the  land  without  the  obligation  to  determine  compensation,  make an award and pay to the owner the  difference  between  the  amount  of  the  award and the amount of 80 per cent of  the estimated compensation.”

70

This  judgment  was  followed  by  another  Bench  of  this  

Court in the case of  Awadh Bihari  Yadav & Ors. v.  State  of   

Bihar & Ors. [(1995) 6 SCC 31], which held, “…we, therefore,  

hold that the land acquisition proceedings in the instant case  

did not lapse…”.   

The  principle  of  law  stated  in  Satendra  Prasad  Jain   

(supra)  was  again  followed by  this  Court  in  the  case  of  P.  

Chinnanna & Ors. v.  State of A.P. & Ors. [(1994) 5 SCC 486]  

and Pratap (supra) and in the case of Allahabad Development  

Authority v.  Nasiruzzaman  & Ors.   [(1996) 6 SCC 424],  this  

Court held as under :

“In  the  impugned  judgment,  it  would  appear that the learned Judges asked the  counsel to verify whether the award came  to  be  made  within  two  years,  as  indicated. The counsel on verification had  stated  that  the  award  was  not  made  within two years from the commencement  of  the  Amendment  Act,  namely,  24-9- 1984. Consequently, the declaration was  given that the notification under Section  4(1) and the declaration under Section 6  stood  lapsed.  This  question  was  examined  by  this  Court  in  Satendra  Prasad Jain v.  State  of U.P. and  Awadh  Bihari  Yadav v.  State  of  Bihar and held  that Section 11-A does not apply to cases  of  acquisitions  under  Section  17  where  possession  was  already  taken  and  the  land  stood  vested  in  the  State.  The

71

notification  under  Section  4(1)  and  declaration under Section 6 do not lapse  due to failure to make an award within  two  years  from  the  date  of  the  declaration. The view of the High Court is  erroneous in law.”

In a very recent judgment of  a  Division Bench of  this  

Court, (to which, one of us, Asok Kumar Ganguly, J. was a  

member) in the case of Banda Development Authority, Banda v.  

Moti  Lal  Agarwal  &  Ors. [2011 (5)  SCALE 173],  this  Court  

followed the aforesaid view with further clarification.  Usefully,  

paragraphs 33, 36 and 38 of the said judgment can be referred  

to at this stage, which read as under :

“33.  XXX XXX XXX

… v) If beneficiary of the acquisition is an  agency/instrumentality of  the State  and  80%  of  the  total  compensation  is  deposited in terms of Section  17(3A) and  substantial  portion of the acquired land  has  been  utilized  in  furtherance  of  the  particular public purpose, then the Court  may reasonably presume that possession  of the acquired land has been taken.

XXX XXX XXX   

36. Once it is held that possession of the  acquired  land  was  handed  over  to  the  BDA on 30.6.2001, the view taken by the  High  Court  that  the  acquisition

72

proceedings  had  lapsed  due  to  non- compliance  of  Section  11A  cannot  be  sustained…...

XXX XXX XXX

38. In the result, the appeal is allowed.  The impugned order is set aside and the  writ petition filed by Respondent No. 1 is  dismissed  with  cost  quantified  at  Rs.  1,00,000/-.  Respondent  No.  1  shall  deposit  the  amount  of  cost  with  the  Appellant within a period of two months  from today.”

However, the learned counsel appearing for the appellant  

has placed reliance upon a judgment of this Court in the case  

of Yusufbhai Noormohmed Nendoliya v. State of Gujarat [(1991)  

4 SCC 531] to contend that the provisions of Section 11A of  

the Act are applicable to the acquisition under Section 17 as  

well.   For  non-adherence  to  those  provisions,  the  entire  

acquisition proceeding should be declared to have lapsed and  

the applicants should be entitled to their lands free from any  

encumbrance.  Let me analyze this judgment to appreciate the  

contention raised by the counsel appearing for the appellants.  

In  this  case,  the  appellants  were  occupants  of  the  lands

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sought to be acquired by the State of Gujarat for the purposes  

of establishing North Gujarat University and notification under  

Section 6 of the Act in respect of the said land was issued on  

12th May, 1988.  An interim order restraining the State from  

taking possession was granted by the  Court.   However,  the  

Acquisition Officer proceeded to issue a notice under Section  

9(1) of the Act and determined the compensation payable.  As  

the  award  had  not  been  made,  the  appellants  therein  had  

made a representation to the Government that the award had  

not been made within the period of two years mentioned under  

Section  11A  of  the  Act  and,  therefore,  the  acquisition  

proceedings  had  lapsed.   This  plea  was  rejected.   The  

appellants filed an application challenging the said decision,  

praying for a declaration that the acquisition proceedings had  

lapsed.  The Division Bench of the Gujarat High Court took the  

view that  the explanation to Section 11A is not confined to  

stay of  making of  the award pursuant to notification under  

Section 6, but it is widely worded and covers in its sweep the  

entire period during which any matter or proceedings due to  

be taken are stayed by a competent Court.  This decision was

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challenged before this Court.  In other words, this Court, in  

Yusufbhai (supra), was  primarily  concerned  with  the  

interpretation of  Explanation to Section 11A of  the Act  and  

was determining the period which needs to be excluded while  

computing the limitation period of two years provided for the  

making of an award.  While rejecting the view taken to the  

contrary  by  a  Single  Judge  of  the  Kerala  High  Court,  this  

Court made a reference to taking of possession under Section  

17 of the Act and held :  

“In the first place, as held by the learned  Single  Judge himself,  where the case is  covered by Section 17, the possession can  be taken before an award is made and we  see  no  reason  why  the  aforesaid  expression in the Explanation should be  given  a  different  meaning  depending  upon  whether  the  case  is  covered  by  Section 17 or otherwise… The benefit is  that  the  award must  be  made within  a  period  of  two  years  of  the  declaration,  failing which the acquisition proceedings  would lapse and the land would revert to  the landholder…”.

It is obvious from a bare reading of the above observation  

that the question of applicability of Section 11A to acquisition

75

proceedings  under  Section  17  was  not  in  issue  before  the  

Court.  This controversy was neither argued nor was it even  

remotely necessary for the adjudication of the dispute between  

the parties.   These observations are merely an  obiter of  the  

Court, which is made to support its conclusion in paragraph 8  

of the judgment and cannot be treated as ratio decidendi of the  

judgment  or  a  precedent  for  the  proposition  raised  in  the  

present case.  The learned counsel attempted to argue that the  

expression  ‘whether  the  case  is  covered  by  Section  11  or  

otherwise’  unequivocally  states  the  principle  of  law  that  

Section 11A is applicable to the present case.  I am unable to  

accept  this  contention  as  it  is  not  an  authority  for  the  

proposition.   This  controversy  was  never  raised  before  the  

Bench.  The argument raised on behalf of the appellants is,  

therefore, misplaced.   

A  half  hearted attempt  was  also  made  by  the  learned  

counsel for the appellants to advance the argument that there  

is difference of opinion by equi Benches of this Court, in the  

case of  Satendra Prasad  Jain (supra)  on the one hand and

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Yusufbhai  Noormohmed  Nendolia (supra)  on  the  other  and,  

therefore, this matter should be referred to a larger Bench.  I  

am not  impressed with this  contention at  all.   There  is  no  

conflict.  Satendra Prasad Jain (supra) lays down the law and  

on true application of the principle of  ratio decidendi, it is a  

direct  precedent  for  the  proposition  involved in  the  present  

case.  I can squarely answer the questions of law arising in the  

present  case  with  reference  to  the  settled  principles  and,  

therefore, have no hesitation in rejecting this request made on  

behalf of the appellants.

Let me also examine the other reasons which will support  

the view taken by this Court in Satendra Prasad Jain (supra)  

and  followed  in  subsequent  cases  referred  above.   Section  

17(1) of the Act uses the expression ‘though no such award  

has been made’.  This clearly demonstrates that making of an  

award  is  not  a  sine  qua  non for  issuance  of  a  notification  

under Section 4(1) read with Section 17(1) of the Act or even  

taking  possession in terms thereof.    After  publication of  a  

notification under Section 4 read with Sections 17(1) and 17(4)

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of the Act,  the authority is obliged only to publish a notice  

under Section 9(1) of the Act and comply with the provisions of  

Section  17(3A)  before  it  can  take  possession  within  the  

stipulated period.   Once possession of  the land is taken,  it  

shall thereupon vest absolutely in the Government free from  

all  encumbrances.   In other  words,  Section 17(4)  itself  is  a  

permissible exception to the provisions of Section 11 of the Act  

and, therefore, the question of enforcing Section 11A against  

proceedings under Section 17 would not arise.  Under Section  

16,  the  land  shall  vest  in  the  Government  free  from  all  

encumbrances only after the award is made and possession is  

taken.  In  contradistinction  to  this,  under  Section  17(1)  the  

land  shall  vest  absolutely  in  the  Government  free  from all  

encumbrances even when no award is made and possession  

thereof is taken in terms of Sections 17(1) and 17(3A) of the  

Act.  We have to give the language of Section 17(1) its plain  

meaning, within the field of its operation.  Another reason in  

support of taking such a view is that, once such possession is  

taken and the land is so vested, the Act does not make any  

provision  for  re-vesting  of  land  in  the  owners/persons

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interested.   Reversion  of  title  or  possession  of  property  

acquired,  which  has  vested  in  the  Government  or  in  the  

authority  for  whose  benefit  such  lands  are  acquired,  is  

unknown  to  the  scheme  of  the  Act.   To  introduce  such  a  

concept by interpretative process would neither be permissible  

nor proper.

Discussion  on  reverting  back  of  land  to  the  owners  in  terms of Section 48 of the Act

A Constitution  Bench of  this  Court  (to  which  I  was  a  

member)  in  the  recent  judgment  in  the  case  of  Offshore  

Holdings Pvt.  Ltd. v.  Bangalore Development Authority & Ors.  

[(2011)  3  SCC  139],  while  dealing  with  the  provisions  of  

Sections 27 and 36 of the Bangalore Development Authority  

Act read with the provisions of the Land Acquisition Act and  

while referring to non-reversion of property to owners where it  

is vested in the Government, held as under :

“Where,  upon  completion  of  the  acquisition  proceedings,  the  land  has  vested in the State Government in terms  of Section 16 of the Land Acquisition Act,  the  acquisition  would  not  lapse  or

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terminate  as  a  result  of  lapsing  of  the  scheme under Section 27 of the BDA Act.  An argument to the  contrary cannot  be  accepted for the reason that on vesting,  the land stands transferred and vested in  the  State/Authority  free  from  all  encumbrances  and  such  status  of  the  property is incapable of being altered by  fiction of law either by the State Act or by  the Central Act.  Both these Acts do not  contain any provision in terms of which  property, once and absolutely, vested in  the State can be reverted to the owner on  any condition.  There is no reversal of the  title  and  possession  of  the  State.  However,  this may not  be true in cases  where  acquisition  proceedings  are  still  pending and land has not been vested in  the Government in terms of Section 16 of  the Land Acquisition Act.”

As already discussed, no award is required to be made  

before the provisions of Section 17(1) can be invoked.  Such an  

approach  is  further  buttressed  by  another  factor  that  is  

reflected under Section 17(3B) of the Act.  The amount of 80  

per  cent  of  the  estimated  compensation  deposited  under  

Section 17(3A) of the Act is to be finally adjusted against the  

award made under Section 11 in terms of Section 17(3B) of the  

Act.  A cumulative reading of these provisions clearly suggests

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that provisions of Section 11A of the Act can hardly be applied  

to the acquisition under Section 17 of the Act.

Another point which would support the view that I am  

taking is with reference to the provisions of Section 48 of the  

Act.  Section 48 empowers the Government to withdraw from  

the acquisition of the land of which possession has not been  

taken.  Where  the  Government  withdraws  from  such  an  

acquisition,  it  is  its  duty  to  determine  the  amount  of  

compensation for  the damages suffered by the owners as a  

consequence  of  the  notice  or  any  other  proceeding  taken  

thereunder, which amounts have to be paid as per provisions  

of  Part  III.   Section 48,  thus,  is  a clear  indication that  the  

power  of  the  Government  to  withdraw  the  acquisition  is  

subject to the limitation stated under Section 48 itself.  The  

scheme of Section 48 can be summarized as follows:

A. Except in cases provided under Section 36, the Government  

has the power to withdraw from the acquisition of any land;

B. Provided the possession of such land had not been taken;

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C. Government is liable to pay compensation for the damages  

suffered by the owner as a consequence of  notice  or any  

proceeding  thereunder  which  have  to  be  computed  in  

accordance with the provisions of Part III.

There is no ambiguity in the language of Section 48 of the  

Act  to  give  it  any  other  interpretation  except  that  the  

Government is not vested with the power of withdrawing from  

the acquisition of any land, of which the possession has been  

taken. Where the award has been made and possession has  

been taken,  the  land  vests  in  the  Government  in  terms  of  

Section  16  of  the  Act.   On  the  contrary,  the  land  vests  

absolutely  in  the  Government  free  from  all  encumbrances  

where  award  has  not  been  made  and  only  possession  as  

contemplated under Section 17(1) of the Act has been taken.  

If the Government has no power to withdraw from acquisition  

of any land, the possession of which has been taken, then by  

no stretch of imagination can it be held that the Government  

will have the power to withdraw from the acquisition of any  

land where the land has vested in the Government or the land

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has been subsequently transferred in favour of an authority  

for whose development activity the lands were acquired.  In  

the  case  of  Lt.  Governor  of  Himachal  Pradesh  and  Anr.  v.   

Avinash Sharma [(1970) 2 SCC 149 ], this Court took the view  

that  once  the  notification under  Section 17(1)  of  the  Act  is  

issued and land accordingly vested with the Government, the  

notification can neither be cancelled under Section 21 of the  

General  Clauses Act nor can it  be withdrawn in exercise of  

powers conferred by the Government under Section 48 of the  

Act.   This  Court  in Avinash  Sharma’s  case  (supra)  held  as  

under :

“But these observations do not assist the  case  of  the  appellants.  It  is  clearly  implicit  in  the  observations  that  after  possession has been taken pursuant to a  notification under Section 17(1) the land  is  vested  in  the  Government,  and  the  notification  cannot  be  cancelled  under  Section  21  of  the  General  Clauses  Act,  nor can the notification be withdrawn in  exercise of the powers under Section 48  of  the  Land  Acquisition  Act.  Any  other  view would enable the State Government  to  circumvent  the  specific  provision  by  relying  upon  a  general  power.  When  possession  of  the  land  is  taken  under  Section  17(1),  the  land  vests  in  the

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Government.  There  is  no  provision  by  which  land  statutorily  vested  in  the  Government reverts to the original owner  by mere cancellation of the notification.”

In  another  case  titled  Rajasthan  Housing  Board  and   

Others v. Shri Kishan  and Others [(1993) 2 SCC 84], this Court  

was concerned with a notification issued under Section 4 of  

the  Act  and also  a  notification  issued a  few days  after  the  

issuance of  the first notification,  under Section 17(4) of  the  

Act. These were challenged on the ground that there was no  

urgency and so, the provisions of Section 5A of the Act could  

not be dispensed with and that there were structures on the  

land which could not have been acquired.  An argument was  

also raised that  the Government had intended and, in fact,  

issued letters de-notifying the lands acquired and, thus, they  

should  be  treated  as  having  been  de-notified  as  per  the  

decision  of  the  Government.   In  these  circumstances,  the  

Court held as under:

“26. We are of the further opinion that in  any event the government could not have  withdrawn  from  the  acquisition  under  Section  48  of  the  Act  inasmuch as  the  Government had taken possession of the

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land. Once the possession of the land is  taken it is not open to the government to  withdrawn from the acquisition. The very  letter dated 24.2.1990 relied upon by the  counsel  for  the  petitioner  recites  that  "before  restoring  the  possession  to  the  society  the  amount  of  development  charges will have to be returned back....”  This  shows  clearly  that  possession  was  taken over by the Housing Board. Indeed  the very tenor of the letter is, asking the  Housing  Board  as  to  what  development  work  they  had  carried  out  on  the  land  and  how  much  expenditure  they  had  incurred thereon,  which could  not  have  been  done  unless  the  Board  was  in  possession  of  the  land.  The  Housing  Board  was  asked  to  send  the  full  particulars of the expenditure and not to  carry on any further development works  on  that  land.  Reading  the  letter  as  a  whole,  it'  cannot  but  be  said  that  the  possession of the land was taken by the  government and was also delivered to the  Housing  Board.  Since  the  possession of  the  land  was  taken,  there  could  be  no  question  of  withdrawing  from  the  acquisition under Section 48 of the Land  Acquisition Act, 1894.”

In  the  case  of  Sanjeevanagar  Medical  &  Health   

Employees’ Cooperative Housing Society v. Mohd. Abdul Wahab   

and Others [(1996) 3 SCC 600], it was held that the acquired  

land had already been transferred to the society for the benefit

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of  which the  lands were acquired,  by  invoking  the  urgency  

clauses.   The  question  of  reverting  acquired  land  had  not  

arisen  in  this  case  directly,  as  the  Court  was  primarily  

concerned  with  the  contention  that  the  notification  issued  

under Section 4 was liable to be quashed.  A question, with  

regard  to  inconsistency  between  the  Central  and  the  State  

Acts,  was  also  raised.  The  Court,  in  paragraph  12  of  the  

judgment, held that by operation of Section 16, land had been  

vested  in  the  State  free  from  all  encumbrances  and  while  

referring to the  judgment of  this  Court  in  Satendra  Prasad  

Jain (supra) reiterated the principle that ‘Divesting the title to  

the land statutorily vested in the Government and reverting  

the same to the owner is not contemplated under the Act. Only  

Section 48 gives power to withdraw from acquisition that too  

before possession is taken.’  

This  principle  was  followed  by  another  Bench  of  this  

Court  in  the  case  of  Bangalore  Development  Authority  and  

Others  v.  R.  Hanumaiah  and  Others [(2005)  12  SCC  508]  

wherein, it was held as follows:

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“46.  The  possession  of  the  land  in  question was taken in the year 1966 after  the  passing  of  the  award  by  the  Land  Acquisition  Officer.  Thereafter,  the  land  vested in the Government which was then  transferred  to  CITB,  predecessor-in- interest of the appellant. After the vesting  of the land and taking possession thereof,  the  notification  for  acquiring  the  land  could  not  be withdrawn or  cancelled in  exercise  of  powers  under  Section  48  of  the  Land  Acquisition  Act.  Power  under  Section  21  of  the  General  Clauses  Act  cannot  be  exercised after  vesting of  the  land  statutorily  in  the  State  Government.”

Similarly,  even in  the  case  of  National  Thermal  Power   

Corporation Limited v.  Mahesh Dutta and Others [(2009) 8 SCC  

339],  the  Government  had  desired  to  withdraw  lands  from  

acquisition after the lands had vested in it, in exercise of its  

power under Section 48 of the Act.  Rejecting the contention of  

the State in paragraph 16 of the judgment, the Court stated  

that ‘it is a well settled proposition of law that in the event the  

possession of the land, in respect whereof a notification had  

been issued, had been taken over, the State would be denuded  

of  its  power  to  withdraw  from  the  acquisition  in  terms  of  

Section 48 of the Act.’  The Court then went to the extent of

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expressing  the  view  that  the  possession  taken  may  be  

symbolic or actual.

I must notice that in the case of U.P. Jal Nigam, Lucknow  

through its Chairman and Another v. Kalra Properties (P) Ltd.,   

Lucknow & Others [(1996) 3 SCC 124], a Bench of this Court  

had  made  a  passing  observation  in  paragraph  3  of  the  

judgment:  

“It  is  further  settled  law  that  once  possession  is  taken  by  operation  of  Section 17(2), the land vests in the State  free  from  all  encumbrances  unless  a  notification  under  Section  48(1)  is  published  in  the  Gazette  withdrawing  from  the  acquisition.   Section  11A,  as  amended  by  the  Act  of  68  of  1984,  therefore,  does  not  apply  and  the  acquisition does not lapse”.

The aforesaid observations that  the State  may issue ‘a  

notification under Section 48(1)’ and this notification may be  

‘published in the Gazette withdrawing from the acquisition’,  

are nothing but an obiter of the Court without any discussion  

thereto.   The  question  whether  the  acquisition  proceedings  

lapse or that the notification cancelling acquisition could be

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issued after the possession is taken, where the land has vested  

in the Government did not arise in that case.   The Court was  

primarily concerned with three main questions:  

1. What  was the  effect  of  possession of  land subsequent to  

notification issued under Section 4(1) of the Act?  

2. Whether  the  provisions  of  Section  11A  of  the  Act  would  

apply  to  the  acquisition  under  Section  17(1)  read  with  

Section 17(4) of the Act? and  

3. How the market value should be determined?

Firstly,  if  the  said  interpretation  is  given,  it  shall  be  

contrary  to  the  specific  language  of  Section  48  of  the  Act.  

Secondly, the learned Judges did not refer to any judgment of  

this  Court  while  making  the  observation  that  ‘it  is  further  

settled  law’.   I  have  referred to  the  consistent  view  of  this  

Court right from the year 1970 till 2011 and no judgment to  

the  contrary  has  been  brought  to  the  notice  of  the  Court.  

Thus, I must hold that the observations made in paragraph 3,

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as  reproduced,  are  merely  an  obiter and  not  a  binding  

precedent.

The lands which have been acquired under the provisions  

of Section 17 of the Act are incapable of being reverted to the  

owners/persons interested.  The Act does not make any such  

provision and, thus, the Court is denuded of any such power.  

The Court  must exercise  its  power within the  framework of  

law, i.e., the provisions of the Act.  

In the case of  an ordinary acquisition,  if  the land has  

vested in the State Government then neither the Government  

nor the court can take recourse to the provisions of Section  

48(1) of the Act, there the question of applying Section 11A of  

the Act to acquisition proceedings under Section 17 of the Act  

cannot arise, as it would tantamount to achieving something  

indirectly  which  would  be  impermissible  to  be  achieved  

directly.  For all the above reasons, I hold that Section 11A of  

the  Act  has  no  application  to  the  acquisition  proceedings  

under the provisions of Section 17 of the Act.

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There  is  no  dispute  in  the  present  case  that  the  

provisions of Section 11A of the Act have not been complied  

with.  Admittedly, the notification under Section 4(1) read with  

Section 17(4) was published on 17th April, 2002, declaration  

under  Section  6  was  made  on  22nd August,  2002  and  the  

possession of the property was taken on 4th February, 2003.  

The award has been made on 9th June, 2008, much after the  

expiry of the prescribed period of two years under Section 11A  

of the Act.  There being an admitted violation of the provisions  

of Section 11A of the Act, the natural consequence is that its  

rigours  would  be  attracted.  However,  the  most  pertinent  

question  that  arises  for  consideration  is:  whether  the  

provisions  of  Section  11A  of  the  Act  are  applicable  to  the  

acquisition of land under Section 17 of the Act?

The  main  thrust  of  submissions  on  behalf  of  the  

appellants  is  that  the  provisions  of  Section  11A of  the  Act  

would  be  attracted  even  to  the  acquisition  proceedings  

undertaken  by  the  appropriate  Government  in  exercise  of  

powers  vested  in  it  under  Section  17  of  the  Act.   It  is

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contended that Section 17 in the scheme of the Act is at parity  

to the normal and ordinary process of acquisition except that  

it  is  a  power  to  be  exercised  in  urgent  basis.   The  other  

provisions  like  publication  of  notification  under  Section  4,  

declaration under Section 6, notice under Sections 9 and 12  

and passing of award under Section 11 of the Act are argued  

to be essential features of an acquisition made under Section  

17 of the Act as well.  Thus, it is submitted that the provisions  

of Section 11A of the Act would also apply to an acquisition  

made under Section 17 of the Act.  If an award is not made  

within two years from the date of declaration under Section 6  

of  the  Act,  the  acquisition  proceedings  should  lapse  

irrespective of whether the acquisition had commenced under  

Section 4 by invoking powers of urgency or otherwise.  It is  

argued that there is no justification, whatsoever, for excluding  

the  application of  Section 11A of  the  Act  from acquisitions  

made  under  Section  17  of  the  Act.   On  the  contrary,  the  

contention on behalf of the respondents is that provisions of  

Section 11A of the Act have no application to the provisions of  

Section 17 of the Act.  In fact, there is an apparent, though

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limited, conflict between these provisions.  The very purpose  

and object  of  the  Act  would  stand defeated if  provisions  of  

Section 11A of the Act are applied to the acquisitions under  

Section 17 of the Act.

I may now examine the scheme of the Act, with particular  

reference to the difference between acquisitions in exercise of  

emergent  powers  under  Section  17  of  the  Act  and  the  

acquisitions made otherwise.  In both the cases, notification  

under Section 4(1) has to be published in accordance with the  

provisions of the Act.  Notification under Section 4 is a  sine  

qua non for commencement of the acquisition proceedings and  

this has been the consistent view of this Court right from the  

case of Narender Jeet Singh v. State of U.P. [(1970) 1 SCC 125]  

wherein the Court clearly held that issuance of a notification  

under sub-section (1) of Section 4 is a condition precedent to  

exercise  of  any  further  powers  under  the  Act  and  the  

notification issued under that  provision should comply with  

the  essential  requirements  of  law  under  that  provision.  

Thereafter, the owners/persons interested have to be given an

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opportunity to file objections as contemplated under Section  

5A of the Act and after granting them hearing, a declaration  

under Section 6 of the Act has to be published.  Subsequent to  

the  publication  of  such a  declaration,  notice  under  Section  

9(1) of the Act has to be issued stating the intention of the  

Government to take possession of the land and that claims for  

compensation and for all interests in such land may be made  

to  the  competent  authority.   Following  the  procedure  

prescribed, an award has to be made under Section 11 of the  

Act awarding compensation for acquisition of the land with its  

complete details.  Under the scheme of the Act, in the event of  

an ordinary acquisition in contradistinction to acquisition in  

exercise of emergent powers, if the award is not made within a  

period of two years from publication of the declaration under  

Section 6, the acquisition proceedings would lapse.  In these  

proceedings,  the  possession  of  the  land  remains  with  the  

claimant/owners of  the land and it  is only when the award  

becomes final in terms of Section 12 of the Act, possession of  

the  land  is  taken  and  the  acquired  land  vests  in  the

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Government free from all encumbrances under Section 16 of  

the Act.

Where  the  lands  are  acquired  in  exercise  of  emergent  

powers of the State under Section 17 of the Act, a notification  

under  Section 4(1)  of  the Act  is  issued and the notification  

itself refers to the provisions of Section 17(1) as well as Section  

17(4) of the Act.  A specific power is vested in the appropriate  

Government to declare that provisions of Section 5A would not  

be  applicable  to  such  acquisition.   Therefore,  there  is  no  

obligation  upon  the  Collector/authority  concerned  to  invite  

and decide upon objections in terms of Section 5A of the Act,  

prior to publication of a declaration under Section 6 of the Act.  

However,  notice  under  Section  9(1)  of  the  Act  has  to  be  

published to completely and fully invoke the powers vested in  

the State for taking possession of the land, in terms of Section  

17(1)  of  the  Act.   After  the  expiry  of  15  days  from  such  

publication under Section 9(1), the possession of the land can  

be  validly  taken  by  the  Government,  whereupon  the  land  

would  vest  absolutely  in  the  Government,  free  from  all

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encumbrances.  In other words, for proper computation of the  

specified  period  of  15  days,  issuance  of  notification  under  

Section 9(1) of the Act would be necessary, but it cannot be  

held  to  be  mandatory  in  its  operation  so  as  to  render  the  

execution  proceedings  invalid.   In  the  case  of  May  George  

(supra), a Bench of this Court has expressed the view that the  

notification  under  Section  9(1)  of  the  Act  as  contemplated  

under Section 17(1) of the Act is not mandatory.

Before the Government takes possession of the land in  

exercise of its powers under Section 17(1) of the Act, it has to  

comply  with  the  requirements  of  Section 17(3A)  of  the  Act.  

The  amount  so  paid,  if  falls  short,  and/or  is  in  excess  of  

compensation actually due to the land owners, the same shall  

be  determined  and  adjusted  while  making  the  final  award  

under  Section 11 of  the  Act.   It  is  evident  that  both these  

acquisitions have distinct schemes of acquisition.  Section 17  

of the Act itself refers to some other provisions, like Sections  

5A, 9, 11, and 31 of the Act.  Wherever such reference was  

considered necessary by the Legislature, it has been so made.

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Thus, there is no occasion for the Court to read into Section  

17, the language of Section 11A of the Act which has not been  

provided by  the  Legislature;  more  so  when doing  so  would  

destroy or frustrate the very object of the urgent acquisition.  

Marked distinction between the implementation of these two  

types of  acquisition schemes contained in the Act is  clearly  

suggestive that these schemes operate in their respective fields  

without any contradiction.  Hence, the Court would adopt an  

interpretation which would further such a cause, rather than  

the one which will go contra to the very scheme of the Act.  

In my considered view, it will be difficult for me to hold  

that  the provisions of  Section 11A of the Act,  despite being  

mandatory,  would  apply  to  the  scheme  of  acquisition  

contained under Section 17 of the Act.

Whether the Claimants can be granted any relief even on  equitable grounds?

The facts, as already noticed by me above, are hardly in  

dispute.   Admittedly,  the  possession  of  the  land  had  been  

taken on 4th February, 2002 and the Writ Petition No. 2225

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was  filed  by  the  petitioners  in  the  year  2006  i.e.  after  the  

possession has been taken.  In terms of Section 17(1) of the  

Act,  the  land  has  been vested absolutely  and free  from all  

encumbrances in the Government.  After vesting of the land,  

the development activity had been carried out over the years  

and it  is informed that Sector 88, NOIDA is fully developed  

and operational.

Once the development activity has been completed in the  

entire  sector,  will  it  be  equitable  to  release  the  lands  from  

acquisition?  Even if for the sake of argument, it is assumed  

that there is some merit in the contention raised on behalf of  

the  appellant,  the  answer  has  to  be  in  the  negative.   It  is  

settled  canon  of  equitable  jurisdiction  that  the  person  who  

feels aggrieved by an action of the State should approach the  

Court  without  any  unnecessary  delay,  particularly  in  cases  

such as the present one.  While the notification under Section  

4 read with Sections 17(1) and 17(4) of the Act was issued on  

14th April, 2002 and possession taken on 4th February, 2003  

the writ petitions in question were filed in August 2006, i.e.,

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more  than  four  years  subsequent  to  the  issuance  of  the  

notification under Section 4.  It was contended that the cause  

of action to challenge the acquisition proceedings arose only  

after  the  period  of  two  years  had  lapsed  from  the  date  of  

issuance of the notification.  Even if that be so, still there is an  

unexplained  and  undue  delay  of  more  than  two  years  in  

approaching  the  Court.   This  would  itself  disentitle  the  

appellants  to  claim  any  equitable  relief  in  the  facts  and  

circumstances of the present case.  

I  must not  be understood to say that in every case of  

delay,  per  se,  the  Court  would  decline  to  exercise  its  

jurisdiction if  the  party to the  lis can otherwise be granted  

relief in accordance with law.  This has to be decided keeping  

in view the facts and circumstances of a given case.   

It is not in dispute and, in fact, can hardly be disputed  

that in the intervening period of nearly ten years, the acquired  

areas have fully developed. Not only this, it is informed during  

the course of hearing that the award was finally made by the  

authorities on 9th June, 2008 and has been accepted by nearly

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97.6 per cent of the owners whose lands were acquired vide  

the said notification.  In other words, nearly all land owners  

have  accepted  the  award  and  permitted  the  development  

activity to be carried out.   This conduct of the owners as a  

whole would again be a factor which will  weigh against the  

grant of any relief to the appellants.  Huge amounts of money  

and resources of the State, as well as other bodies or persons  

have been invested on the development of this sector which is  

stated to be an industrial sector.  It will be unjust and unfair  

to uproot such a developed sector on the plea raised by the  

present appellants.  In this view, I am fully supported by the  

judgment  of  a  Division  Bench  of  this  Court,  to  which  my  

learned brother (Ganguly, J.)  was a member, in the case of  

Tamil  Nadu Housing Board v.  L.  Chandrasekaran  (Dead)  by  

Lrs.  & Ors. [(2010)  2 SCC 786].   The Bench was primarily  

dealing  with  the  question  of  re-conveyance  of  the  acquired  

lands on the grounds of discrimination and arbitrariness.  The  

High Court had passed a direction against the Board to re-

convey the acquired land, which was held by this Court, on  

appeal,  to be contrary to the provisions of Section 48 of the

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Act.  This Court settled the point of law holding that it is not  

appropriate for the Court to quash the acquisition proceedings  

at  the  instance  of  one  or  two  land  owners,  where  the  

development had taken place and majority of the land owners  

had not challenged the acquisition.  The Court, while relying  

upon the case of  A.S. Naidu v.  State of Tamil Nadu  [(2010) 2  

SCC 801] held as under:  

“15. The  first  issue  which  requires  consideration is whether the order passed  by this Court in A.S. Naidu case has the  effect  of  nullifying the  acquisition in its  entirety. In this context, it is apposite to  mention that neither the appellant Board  nor  have  the  respondents  placed before  the Court copies of the writ petitions in  which  the  acquisition  proceedings  were  challenged,  order(s)  passed  by  the  High  Court  and  the  special  leave  petitions  which were disposed of by this Court on  21-8-19903 and  without  going  through  those  documents,  it  is  not  possible  to  record a finding that  while  disposing of  the  special  leave  petitions  preferred  by  A.S.  Naidu  and  others,  this  Court  had  quashed  the  entire  acquisition  proceedings.  So  far  as  A.S.  Naidu  is  concerned, he did not even make a prayer  before  the  High Court  for  quashing  the  preliminary  notification  issued  under  Section 4(1) of the Act.

16. This is evident from the prayer made  by him in Writ Petition No. 7499 of 1983,  which reads as under:

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“For  the  reasons  stated  in  the  accompanying  affidavit,  it  is  most  respectfully prayed that this Hon’ble  Court may be pleased to issue a writ  of certiorari or any other proceeding  or  any  other  appropriate  writ  or  direction or order in the nature of a  writ to call for the records of the first  respondent  relating  to  GOMs  No.  1502,  Housing  and  Urban  Development  Department  dated  7- 11-1978  published  in  the  Tamil  Nadu  Government  Gazette  Extraordinary  dated 10-11-1978 in  Part II Section 2 on pp. 22 to 26 and  quash  the  said  notification  issued  under  Section  6  of  the  Land  Acquisition  Act,  1894 insofar  as  it  relates to the land in the petitioners’  layout  approved  by  the  Director  of  Town Planning in LPDM/DTP/2/75  dated 7-3-1975 in Survey Nos. 254,  257,  258,  260,  268  and  271  in  Mogapperi Village, No. 81, Block V,  Saidapet Taluk, Chingleput District  and render justice.”

From  the  above  reproduced  prayer  clause,  it  is  crystal  clear  that  the  only  relief sought by Shri A.S. Naidu was for  quashing  the  notification  issued  under  Section  6  insofar  it  related  to  the  land  falling in Survey Nos. 254, 257, 258, 260,  268  and  271  in  Mogapperi  Village,  No.  81, Block V, Saidapet Taluk and in the  absence of a specific prayer having been  made  in  that  regard,  neither  the  High  Court nor this Court could have quashed  the entire acquisition. This appears to be  the reason why the Division Bench of the  High  Court,  while  disposing  of  Writ  Appeals  Nos.  676  of  1997  and  8-9  of  1998  observed  that  quashing  of  acquisition  by  this  Court  was  only  in  relation  to  the  land of  the  petitioner  of  that case and, at this belated stage, we

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are  not  inclined  to  declare  that  order  dated 21-8-19903 passed by  this  Court  had  the  effect  of  nullifying  the  entire  acquisition and that too by ignoring that  the appellant Board has already utilised  portion of the acquired land for housing  and other purposes. Any such inferential  conclusion  will  have  disastrous  consequences inasmuch as it will  result  in uprooting those who may have settled  in the flats or houses constructed by the  appellant  Board or  who may have  built  their  houses  on  the  allotted  plots  or  undertaken other activities.

XXX XXX XXX

26. A  glance  at  the  impugned  order  shows that the Division Bench did not at  all advert to the factual matrix of the case  and  the  reasons  incorporated  in  the  Government’s  decision  not  to  reconvey  the acquired land to the respondents. The  Division Bench also did not examine the  correctness  or  otherwise  of  the  order  passed by the learned Single Judge and  allowed  the  appeals  preferred  by  the  respondents simply by relying upon order  dated  18-2-2000 passed  in  Writ  Appeal  No.  2430 of  1999 and that  too without  even  making  an  endeavour  to  find  out  whether  the  two  cases  were  similar.  In  our  view,  the  direction  given  by  the  Division Bench to the appellant Board to  reconvey  the  acquired  land  to  the  respondents  is  per  se  against  the  plain  language  of  Section  48-B  of  the  Act  in  terms of which only the Government can  transfer the acquired land if it is satisfied  that  the  same  is  not  required  for  the  purpose for which it was acquired or for  any other public purpose. The appellant  Board is  not  an authority  competent  to  transfer the acquired land to the original  owner.  Therefore,  the  Division Bench of  the High Court could not have issued a  mandamus  to  the  appellant  Board  to

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reconvey  the  acquired  land  to  the  respondents. As a matter of fact, the High  Court  could  not  have  issued  such  direction  even  to  the  Government  because  the  acquired  land  had  already  been transferred to  the  appellant  Board  and  the  latter  had  utilised  substantial  portion  thereof  for  execution  of  the  housing  scheme  and  other  public  purposes.

27. There  is  one  more  reason  why  the  impugned  judgment  deserves  to  be  set  aside.  Undisputedly,  the  land  of  the  respondents  forms  part  of  large  chunk  which was acquired for execution of the  housing scheme. The report sent by the  appellant Board to the State Government  shows  that  the  purpose  for  which  the  land was acquired is still subsisting. The  respondents  had  neither  pleaded  before  the  High  Court  nor  was  any  material  produced by them to show that the report  which formed basis of the Government’s  decision not to entertain their prayer for  reconveyance of the land was vitiated by  mala  fides  or  that  any  extraneous  or  irrelevant  factor  had  influenced  the  decision-making  process  or  that  there  was  violation  of  the  rules  of  natural  justice. Therefore, the Division Bench of  the High Court could not have exercised  the power of judicial review and indirectly  annulled  the  decision  contained  in  communication dated 18-3-1999.

28. It need no emphasis that in exercise  of power under Section 48-B of the Act,  the Government can release the acquired  land only till the same continues to vest  in it and that too if it is satisfied that the  acquired  land  is  not  needed  for  the  purpose for which it was acquired or for  any  other  public  purpose.  To  put  it  differently,  if  the  acquired  land  has  already been transferred to other agency,  the  Government  cannot  exercise  power  under  Section  48-B  of  the  Act  and

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reconvey the same to the original owner.  In any case, the Government cannot be  compelled  to  reconvey  the  land  to  the  original owner if the same can be utilised  for any public purpose other than the one  for which it was acquired.”

I am of the considered view that what has been stated by  

the learned Judges in that case is squarely applicable, even on  

facts,  to the present case.  Firstly,  there is  no merit in the  

contentions  of  law  raised  by  the  appellants,  which  I  have  

already rejected. Secondly, even on equity, the appellants have  

no case.

Before  I  part  with  this  file,  I  cannot  ignore  one  very  

important  aspect  which  has  come  to  my  notice  during  the  

hearing of the case and which, as stated at the Bar, is an often  

repeated default on the part of the Government Departments  

causing  undue  inconvenience,  harassment,  hardship  and  

ultimately resulting in the acquisition itself being inequitable  

against  the  land  owners/persons  interested  therein.   The  

declaration under Section 6 was made on 22nd August, 2002,  

the notice under Section 9(1) had been issued and possession  

of the land was taken on 4th February, 2003.  In the normal

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course  and  as  per  the  requirements  of  the  provisions  of  

Section  17(3A)  read  with  Section  17(1),  80  per  cent  of  the  

estimated  compensation  ought  to  have  been  paid  to  the  

owners of the land/persons interested, within that period prior  

to taking possession and/or, in any case, within a very limited  

and reasonable time.  This I am only noticing subject to my  

finding that there is unequivocal statutory obligation upon the  

respondents to pay the amount prior to taking possession of  

the land in question.  However, the award made on 9th June,  

2008  would  have  otherwise  vitiated  the  entire  acquisition  

proceedings, but for the fact that, as held by me above and for  

reasons recorded supra that Section 11A does not apply to the  

acquisition made in exercise of emergent powers in terms of  

Section 17 of the Act.  Still, to do things within a reasonable  

time  is  an  obligation  of  the  State,  as  is  imposed  by  the  

Legislature  itself  and  even  otherwise  as  per  the  canons  of  

proper  governance,  i.e.,  vigilantibus,  non  dormientibus,  jura   

subveniunt,  which  means  the  laws  assist  those  who  are  

vigilant, not those who sleep over their rights.  According to  

Respondent  No.2,  they  had  deposited  10  per  cent  of  the

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estimated compensation prior to issuance of notification under  

Section 4, i.e., 17th April, 2002 and 70 per cent of the amount  

was deposited with the Government on 8/14th July, 2002 by a  

cheque.   The  amount  deposited  was  nearly  `  6,66,00,000/-  

and odd.  For reasons best known to the State Government,  

this amount was not disbursed to the claimants until passing  

of the award.  In other words, the amount was made available  

to the Government and its authorities for disbursement to the  

owner/claimants  prior  to  (or  soon  after)  taking  of  the  

possession, which was taken on 4th February, 2003,  but still  

the claimants were deprived of their legitimate dues without  

any  justification or  reason.   In  order  to  show this,  learned  

counsel appearing for respondent No.2 had even shown the  

records to the Court.  It was also the duty of respondent No.2  

to ensure that the payments were made to the claimants prior  

to taking of possession but, in any case, it was an unequivocal  

statutory  obligation  on  the  part  of  the  State/Collector  to  

ensure that the payments were made to the claimants in terms  

of  Section 17(1)  read with Section 17(3A)  prior  to taking of  

possession.   No justification whatsoever had been advanced

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and can be advanced for such an intentional default and the  

casual attitude of the concerned officers/officials in the State  

hierarchy.   

These authorities are instrumentalities of the State and  

the officers are empowered to exercise the power on behalf of  

the State.  Such exercise of power attains greater significance  

when  it  arises  from  the  statutory  provisions.  The  level  of  

expectation of timely and just performance of duty is higher,  

as  compared  to  the  cases  where  the  power  is  executively  

exercised  in  discharge  of  its  regular  business.   Thus,  all  

administrative  norms and principles of  fair  performance are  

applicable  to  them  with  equal  force,  as  they  are  to  the  

Government department, if not with a greater rigour.   The well  

established precepts of public trust and public accountability  

are fully  applicable to the functions which emerge from the  

public servants or even the persons holding public office.  In  

the case of State of Bihar v. Subhash Singh [(1997) 4 SCC 430],  

this Court, in exercise of the powers of judicial review, stated  

that the doctrine of ‘full faith and credit’ applies to the acts

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done by the officers in the hierarchy of the State.  They have to  

faithfully discharge their duties to elongate public purpose.

The concept of public accountability and performance of  

functions  takes  in  its  ambit,  proper  and  timely  action  in  

accordance with law.  Public duty and public obligation both  

are essentials of good administration whether by the State or  

its instrumentalities.  In the case of  Centre for Public Interest   

Litigation & Anr. v. Union of India & Anr. [(2005) 8 SCC 202],  

this Court declared the dictum that State actions causing loss  

are actionable under public law. This is a result of innovation,  

a new tool  with the courts which are the protectors of  civil  

liberties of the citizens and would ensure protection against  

devastating  results  of  State  action.  The principles  of  public  

accountability and transparency in State action are applicable  

to cases of  executive or statutory exercise of  power, besides  

requiring that such actions also not lack bona fides.  All these  

principles  enunciated  by  the  Court  over  a  passage  of  time  

clearly mandate that public officers are answerable for both  

their inaction and irresponsible actions.  If what ought to have

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been done is not done, responsibility should be fixed on the  

erring  officers;  then  alone,  the  real  public  purpose  of  an  

answerable administration would be satisfied.

The doctrine of ‘full faith and credit’ applies to the acts  

done  by  the  officers.  There  is  a  presumptive  evidence  of  

regularity in official acts, done or performed, and there should  

be faithful discharge of duties to elongate public purpose in  

accordance  with  the  procedure  prescribed.   Avoidance  and  

delay in decision making process in Government hierarchy is a  

matter of growing concern.  Sometimes delayed decisions can  

cause prejudice to the rights of the parties besides there being  

violation of  the statutory rule.   This Court  had occasion to  

express  its  concern in  different  cases  from time to  time  in  

relation  to  such  matters.   In  the  case  of  State  of  Andhra  

Pradesh v. Food Corporation of India [(2004) 13 SCC 53], this  

Court observed that it is a known fact that in transactions of  

Government  business,  no  one  would  own  personal  

responsibility  and  decisions  would  be  leisurely  taken  at  

various levels.

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Principles of public accountability are applicable to such  

officers/officials  with all  their  rigour.   Greater  the power to  

decide, higher is the responsibility to be just and fair.  The  

dimensions of administrative law permit judicial intervention  

in decisions,  though of  administrative  nature,  which are  ex  

facie discriminatory.  The adverse impact of lack of probity in  

discharge of public duties can result in varied defects, not only  

in the decision making process but in the final  decision as  

well.  Every officer in the hierarchy of the State, by virtue of  

his being ‘public officer’ or ‘public servant’, is accountable for  

his  decisions  to  the  public  as  well  as  to  the  State.   This  

concept  of  dual  responsibility  should  be  applied  with  its  

rigours in the larger public interest and for proper governance.  

I  find no justification, whatsoever, for the Government,  

despite deposit by the beneficiary, not to pay 80 per cent of the  

estimated  compensation  due  to  the  claimants  within  the  

requisite time and not even within the reasonable time.  It was  

breach of statutory and governance obligation of the State’s  

officers/officials to pay the amount to the claimants after more

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than five years.  It is expected of the State officers not to forget  

that these are compulsory acquisitions in exercise of State’s  

power  of  eminent  domain  and  the  legislative  intent  behind  

providing  safeguards  and  some  benefits  against  such  

acquisition  ought  not  to  be  frustrated  by  inaction  and  

omissions  on the  part  of  the  officers/officials.   There  being  

patent  unexplained  mistakes,  omissions  and  errors,  

committed  by  the  officers/officials  in  the  State  of  Uttar  

Pradesh in dealing with this entire matter,  I  hereby impose  

cost of ` 1,00,000/- on the State Government which at the first  

instance shall be paid by the State to the owners of the land,  

i.e., present appellants or persons situated alike. However this  

amount  shall  be  recovered  from  the  salary  of  all  the  

officers/officials found guilty by the State which shall conduct  

an  inquiry  for  that  purpose  in  accordance  with  law.   The  

inquiry shall be completed within a period of six months from  

today and a report shall be submitted to the Secretary General  

of this Court on the administrative side.  Imperatively, it must  

follow that the Central Government and all State Governments  

must issue appropriate directions to ensure that there is no

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harassment,  hardship  or  inequality  caused  to  the  

owners/persons interested in the lands acquired by the State,  

in  exercise  of  its  powers  of  eminent  domain  under  Section  

17(1) of the Act.  Wherever the payments are not made within  

time  and  appropriate  steps  are  not  taken  to  finalize  the  

acquisition  of  the  land,  the  concerned  Government  should  

take  appropriate  disciplinary  action  against  the  erring  

officers/officials involved in and responsible for the process of  

acquisition.

I will prefer to record my conclusions and also answer the  

four legal questions (‘A’ to ‘D’) as framed in the judgment by  

my learned brother.  They are as follows:

(A)I  hold  and  declare  that  Section  11A  of  the  Act  has  no  

application to the acquisition proceedings conducted under  

the provisions of Section 17 of the Act;

Once the acquired land has vested in the Government in  

terms of  Section 16 or  17(1)  of  the  Act,  possession of  

which has already been taken, such land is incapable of  

being  re-vested  or  reverted  to  the  owners/persons

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interested therein, for lack of any statutory provision for  

the same under the Act.

(B) The provisions of Section 17(3A) of the Act, on their  

bare reading, suggest that the said provision is mandatory  

but, as no consequences of default have been prescribed by  

the  Legislature  in  that  provision,  thus,  it  will  hardly  be  

permissible for the Court to read into the said provision any  

drastic  consequences  much  less  lapsing  of  entire  

acquisition  proceedings.   In  other  words,  default  in  

complying with provisions of Section 17(3A) cannot result in  

invalidating or vitiating the entire acquisition proceedings,  

particularly when the possession of the acquired land has  

been taken and it has vested in the Government free from  

all encumbrances.

(C) Keeping in view the scheme of the Act, the provisions  

of Section 17 of the Act can be construed strictly but such  

interpretation must be coupled with the doctrine of literal  

and  contextual  interpretation,  while  ensuring  that  the  

object  of  the  legislation  is  not  defeated  by  such  an

114

interpretation.   Strict  compliance  to  the  conditions  

contemplated under Section 17 of the Act should be given  

effect to but within the framework of the statute, without  

making any additions to the language of the section.  

(D) Once  the  right  to  property  ceases  to  be  a  Fundamental  

Right after omission of Articles 19(1)(f) of the Constitution of  

India,  the  addition of  Articles  31A and 300A by the  44th  

Constitutional  Amendment,  1978,  cannot  place  the  legal  

right  to  property  at  the  same  pedestal  to  that  of  a  

fundamental  right  falling  under  Chapter  III  of  the  

Constitution.  It has been clearly held by the Courts that  

the provisions of the Land Acquisition Act are not violative  

of Article 14 of the Constitution.  The rights of the citizens  

and  interest  of  the  State  can  be  balanced  under  the  

provisions  of  the  Act,  without  any  violation  of  the  

Constitutional mandate.

Besides answering the questions of law and stating my  

conclusions as above, it is both appropriate and necessary to  

pass  certain  directive  orders  to  ensure  the  maintenance  of

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balance between the might of the State on the one hand and  

the  rights  of  land  owners  on  the  other.   It  is,  therefore,  

necessary to issue the following directions :

(i) The  Government/acquiring  authority  shall  be  liable  to  

pay interest at the rate of 15 per cent per annum with  

reference to or alike the provisions of Section 34 of the  

Act,  after  the  expiry  of  15  days  from  issuance  of  

notification under Section 9(1) of the Act, and from the  

date on which the possession of the land is taken, till the  

amount of 80 per cent of the estimated compensation is  

paid to the claimants.   

In the facts of the present case, it is clear that 80 per  

cent of the estimated compensation had been deposited  

by the beneficiary.  However, it is no way clear on record  

that  these  amounts  had actually  been received by  the  

owners/interested  persons.   Where  the  amounts  have  

been paid beyond the period as stated in Section 17(3A),  

the claimants still would be entitled to the rate of interest  

afore-indicated.  Interest should be computed from the

116

date of  the notification till  the  date  of  payment to the  

claimants.  The Government is also liable to pay interest  

as  afore-indicated  on  the  balance  amount  determined  

upon making of an award in accordance with Section 11  

of the Act.   

(ii) The Central Government and all the State Governments  

shall issue appropriate and uniform guidelines, within 8  

weeks from today, to ensure that the land owners and  

the persons interested in the lands cquired by the State  

or  its  instrumentalities  are  not  put  to  any  undue  

harassment, hardship and inequity because of inaction  

and omission on the part of the acquiring authority, in  

cases of urgent acquisition under Section 17 of the Act.  

The  Government  should  ensure  timely  action  for  

acquisition and payment of compensation in terms of the  

provisions of the Act, particularly Section 17(3A) of the  

Act, as explained in this judgment.  

(iii) Wherever  the  Government  exercises  its  power  under  

Section 17(1) of the Act and there is default in deposit of

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the  amount  in  terms  of  Section  17(3A)  of  the  Act,  as  

explained in this judgment,  the concerned Government  

shall  take  appropriate  disciplinary  action  against  the  

erring  officers/officials  including  making  good  the  loss  

caused  to  the  Government  revenue  on  account  of  the  

liabilities towards interest or otherwise, because of such  

undue delay on the part of such officers/officials;   

(iv) In this case, the claimants would be entitled to the cost  

of  `  1,00,000/-  (Rupees one  lakh only)  which shall  be  

deposited at the first instance by the State Government of  

Uttar  Pradesh  and  then  would  be  recovered  from  the  

salaries  of  the  defaulting/erring  officers/officials  in  

accordance  with  law.  The  inquiry  shall  be  completed  

within a period of six months from today and a report  

shall be submitted to the Secretary General of this Court  

on the administrative side immediately thereafter.

In result,  the appeal  is  accordingly dismissed with the  

above directions.

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.. …........................................J.

                       [Swatanter Kumar] New Delhi; August 18, 2011

REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.24 OF 2009

M/s. Delhi Airtech Services  Pvt. Ltd. & Anr.     … Appellants

Versus

State of U.P. & Anr.   … Respondents

J U D G M E N T

Ganguly, J.

1. The facts giving rise to the present appeal are simple  

and  fall  within  a  narrow  compass.  However,  they  raise  

questions  which  are  of  public  importance  and  legal  

significance.  Thus, it will be appropriate for us to state the  

questions of law at the very threshold:

A. When the  Government,  in  exercise  of  its  emergency  

powers under Section 17 of the Land Acquisition Act,  

1894 (for short the ‘Act’)  acquires lands, which have  

since  vested  in  the  State,  can  such  an  acquisition  

proceeding  lapse and  consequently  the  land  can  be  

119

transferred  to  the  owners/persons  interested  in  the  

event of  default  by the State,  in complying  with the  

provisions of Section 11A of the Act?

B. Whether the provisions of Section 17(3A) of the Act are  

mandatory or directory?  In either event, would  non-

compliance  with  this  Section  have  the  effect  of  

invalidating  or  vitiating  the  entire  acquisition  

proceedings, even where the land has  vested in the  

State in terms of Section 17(1) of the Act?

C. Whether with the invoking of the emergency provisions  

which have the effect of dispensing with the provision  

of hearing under Section 5A of the Act, the Court is  

entitled to construe the emergency provisions strictly,  

being drastic provisions in an exproprietory law and  

consider  the  safeguards  inbuilt  in  Section  17(3A)  

against  such  drastic  provisions  as  conditions  

precedent  and  mandatory  for  a  valid  exercise  of  

emergency provisions.

D. Whether  having  regard  to  the  principle  of  

reasonableness  being  a  basic  component  of  

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fundamental rights under the Constitution, this Court  

has to construe the provisions of the said Act, a pre-

constitutional  law  in  consonance  with  reason  and  

justice-the fundamental tenets of Article 14 and thus  

arrive at a balanced interpretation of the interest of the  

State as against the rights of citizens or land owners.  

FACTS:

2. The  appellant  No.1  is  a  company  duly  incorporated  

under  the  provisions  of  the  Indian  Companies  Act,  

1956 and is alleged to be the owner of the land sought  

to  be acquired by the  respondents.   The appellant’s  

land, admeasuring about 2-06-1/3-0 Bighas situated  

in Village Haldauni, Tehsil and Pargana Dadri, District  

Gautam Budh Nagar which is abadi land, was sought  

to be acquired by the appropriate Government under a  

notification  dated  17th April,  2002  issued  under  

Section 4(1) read with Sections 17(1) and 17(4) of the  

Act.  This land was acquired for the planned industrial  

development in District Gautam Budh Nagar through  

the  New  Okhla  Industrial  Development  Authority  

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(NOIDA).   The  notification  also  stated  that  the  

provisions of Section 5A of the Act shall not apply.  In  

pursuance to the said notification, a declaration under  

Section 6 of  the  Act  was published on 22nd August,  

2002,  declaring the  area which was required by the  

Government. It also stated that after expiry of 15 days  

from  the  date  of  the  publication  of  the  notification  

under  sub-section  (1)  of  Section  9  of  the  Act,  

possession of the acquired land shall be taken.  The  

appellants have alleged that they did not receive any  

notice under Section 9(1) of the Act but possession of  

the land was nevertheless taken on 4th February, 2003.  

According to the appellants, even after a lapse of more  

than three and a half years after the declaration under  

Section 6 of  the Act,  no award had been made and  

published.

3. The appellants further alleged that, despite inordinate  

delay,  they  were  neither  paid  80  per  cent  of  the  

estimated compensation in terms of Section 17(3A) of  

the Act at the time of taking of possession, nor had the  

Collector passed an award within two years of making  

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the  declaration  under  Section  17(1),  as  required  by  

Section  11A  of  the  Act.  It  was  the  case  of  the  

appellants that this has the effect of vitiating the entire  

acquisition  proceedings.   Non-payment  of  

compensation  and  conduct  of  the  Government  

compelled the appellants to file a writ petition in the  

High Court  of  Allahabad  praying  for  issuance  of  an  

order  or  direction  in  the  nature  of  certiorari or  any  

other  writ,  and  not  to  create  any  encumbrance  or  

interest on the land of  the appellants.  Further,  they  

prayed  that  the  acquisition  proceedings,  insofar  as  

they relate to the land of the appellants, be declared  

void  ab initio and that the respondents be directed to  

return  the  land  under  the  possession  of  the  

Government to the owners. Lastly, the appellants pray  

that the respondents/Government be directed to pay  

damages for use and occupation of the land.

4. To this  writ  petition,  on  behalf  of  NOIDA a  counter  

affidavit was filed in the High Court, denying that the  

acquired land was in fact part of  abadi land.  NOIDA  

also stated that 80 per cent compensation in terms of  

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Section  17(3A)  had  been  deposited  with  the  state  

authorities.  The land had been acquired for planned  

development  of  NOIDA  and  it  was  in  the  physical  

possession  of  the  said  authority.   Possession of  the  

land had been taken on 4th February,  2003 and no  

right  had survived in favour of  the  appellant  as the  

land had vested in the Government.

5. The High Court, vide its judgment dated 28th August,  

2006,  dismissed  the  writ  petition.  The  High  Court  

relied upon the judgment of this Court in the case of  

Satendra Prasad Jain & Ors. v. State of U.P. &  

Ors.,  [AIR 1993 SC 2517 = (1993) 4 SCC 369],  and  

dismissed  the  petition  as  the  High  Court  held  that  

provisions of Section 11A of the Act are not attracted  

to  proceedings  for  acquisition  by  the  Government  

under  Section  17  of  the  Act.   However,  liberty  was  

granted  to  the  appellants  to  pray  for  grant  of  

appropriate  compensation  in  accordance  with  law  

before the competent forum.

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6. Aggrieved  by  the  said  order  of  the  High  Court,  the  

appellants have filed the present appeal impugning the  

judgment dated 28th August, 2006.  

7. In  the  counter  affidavit  filed  before  this  Court  by  

NOIDA, the stand in the counter filed before the High  

Court has been reiterated, with an additional fact that  

the  sector  in  question  was  designated  as  industrial  

area,  and,  after  development activity  was completed,  

allotment  has  been  made  and  possession  of  these  

industrial  plots  has  also  handed  over  to  such  

entrepreneurs/allottees. This falls under Sector 88 of  

the NOIDA City. The rest of the allegations made in the  

writ petition, except the dates in question, have been  

disputed.

8. It  has  also  been  stated  at  the  Bar  by  the  State  

Counsel, on the basis of the record, without filing an  

affidavit, despite directions given to that effect by this  

Court on 5.1.2009, that 10 per cent of the estimated  

compensation was deposited by NOIDA with the State  

Government even prior to the date of the notification  

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under Section 4(1) read with Section 17(4) of the Act,  

issued  by  the  Government  on  17.4.2002.  The  

remaining 70 per cent of the estimated compensation  

had been allegedly deposited vide cheque dated 8/14th  

July,  2002  amounting  to  approximately  

Rs.6,66,00,000/-.  As  such,  it  is  claimed  there  is  

compliance with the provisions of Section 17(3A) of the  

Act.   The Award was made on 9.6.2008,  which has  

been accepted by a large number of owners, i.e., 97.6  

per cent of all owners. Some of these facts have also  

been averred in  the  counter  affidavit  of  NOIDA filed  

before the High Court.

9. It may be noted that neither before the High Court nor  

before this Court any affidavit was filed either by the  

State or by the Collector. The assertion of the appellant  

about non-payment of compensation as contemplated  

under  Section  17(3A)  of  the  Act  has  not  been  

controverted. Such payment has to be tendered by the  

Collector to the person interested and entitled to the  

same,  subject  to  certain  statutory  conditions.  

Assuming  there  has  been  deposit  of  80%  of  the  

126

compensation  amount  by  NOIDA  with  the  state  

authorities,  that  does  not  satisfy  the  requirement  of  

Section 17(3A) of the Act. From the above pleadings of  

the parties,  the admitted facts that emerge from the  

record can be usefully recapitulated.

10. The Governor of State of Uttar Pradesh on 17th April,  

2002, issued a notification under Section 4(1) of  the  

Act,  expressing  the  intention  of  the  Government  to  

acquire the land stated in the said Notification for a  

public  purpose,  namely,  for  the  planned  industrial  

development  in  District  of  Gautam  Budha  Nagar  

through  NOIDA.  Vide  the  same  notification  the  

emergency provisions contained in Section 17 of  the  

Act,  specifically  Section  17(4)  of  the  Act,  were  also  

invoked,  intimating  the  public  at  large  that  the  

provisions  of  Section  5A  of  the  Act  shall  not  be  

applicable.  After  issuance  of  the  declaration  under  

Section 6 of the Act, admittedly the possession of the  

land  in  question  was  taken  on  4th February,  2003.  

Another undisputed fact is that the claimants-owners  

of the land were not paid 80 per cent of the estimated  

127

compensation prior to taking of possession in terms of  

Section 17(3A) of the Act.

11. The Collector had not made or published this award  

even at the time of pronouncement of the judgment of  

the High Court, in Writ Petition No. 22251 of 2006, on  

28  August  2006.  The  High  Court,  in  the  impugned  

judgment, directed respondent No.1 to ensure that the  

Award is made as early as possible, preferably within a  

period of three months from the date of production of  

the certified copy of that order.  In the counter affidavit  

filed before this Court by NOIDA, it  has been stated  

that the Award was finally made and published on 9th  

June, 2008.  According to the appellant, in terms of  

Section 11A of the Act, the Award ought to have been  

pronounced  on  or  before  26th August,  2004  as  the  

declaration under Section 6 of the Act was dated 22nd  

August, 2002.

Legal Issues

12. If I may consider certain features of the said Act and  

the constitutional provisions.  

128

13. Enactment of the said Act was rooted in the colonial  

past  of  this  country  having  been  brought  on  the  

statute  book  on  1894  as  Act  1  of  1984.   With  

enormous  expansion  of  State’s  role  in  promoting  

welfare and development activities since independence,  

acquisition of land for public purposes increased with  

the  passage  of  time.  Several  decades  after  the  

enactment of  the Act,  came Constitution in India in  

1950.  Along  with  it  came the  concept  of  social  and  

economic justice based on expansive values of human  

rights. Under article 366 (10) of the Constitution the  

Act  was  an  ‘existing  law’  made  before  the  

commencement of the Constitution.

Article 366(10) is quoted below:-

“366 (10) “existing law” means any law,  Ordinance,  order,  bye-law,  rule  or  regulation  passed or made before the commencement of  this Constitution by any Legislature, authority  or person having power to make such a law,  Ordinance, order, bye-law, rule or regulation;”

129

14. Article  372  of  the  Constitution  provides  for  

continuance in force of  such ‘existing law’  and their  

adaptation. Article 372 (1) of the Constitution makes it  

clear that notwithstanding the provision of the Article  

395,  but  subject  to  the   other  provisions  of  the  

Constitution, all laws in force in the territory of India  

immediately  before  the  commencement  of  the  

Constitution  shall  continue  in  force  until  altered  or  

repealed  or  amended  by  a  competent  Legislature  or  

other competent authority.

15. Article  13  of  the  Constitution,  which  is  a  part  of  

Fundamental Right (Part III), also defines ‘laws in force’  

under Article 13(3)(b).   Article 13(3)(b) is set out:-

“13 (3) (b) “laws in force” includes laws passed  or made by a Legislature or other competent  authority  in  the  territory  of  India  before  the  commencement  of  this  Constitution  and  not  previously repealed, notwithstanding that any  such law or any part thereof may not be then  in  operation  either  at  all  or  in  particular  areas.”

130

16. The said definition of ‘laws in force’ under Article 13(3)

(b)  with  certain  changes,  is  consistent  with  the  

definition of ‘existing laws’ in  Article 366(10).  

17. The said Act is thus both an ‘existing law’ within the  

meaning of Article  366(10) and ‘laws in force’  within  

the meaning of Article 13(3)(b) of the Constitution.

18. Article 13(1), which is relevant in this context, is set  

out below:

“Article 13. Laws inconsistent with or in  derogation of the fundamental rights: (1) All  laws  in  force  in  the  territory  of  India  immediately before the commencement of this  Constitution, in so far as they are inconsistent  with the provisions of  this Part, shall,  to the  extent of such inconsistency, be void.”

19. Under Article 372 such laws in force can continue with  

some amendments, subject to ‘the other provisions of  

this  Constitution’.  Article  13  certainly  comes  within  

‘the other provisions of the Constitution’.

20. Therefore,  Article  372  and  Article  13  must  be  read  

together  in  as  much  as  both  the  articles  relate  to  

continuance  of  pre-constitutional  laws  validly  made.  

131

Article 372 permits such continuance and Article 13  

stipulates the condition on which they can continue.  

Article  13  is  of  greater  importance  as  it  is  part  of  

fundamental right and makes all laws, whether pre or  

post-constitution,  subject  to  the  primacy  of  

fundamental rights. The continuance of the said Act is  

thus  made  to  depend  on  its  compliance  with  the  

mandate of Article 13. The mandate of Article 13(1) is  

clear  that  such  law can continue  provided  it  is  not  

inconsistent with the provision of Part III. In the event  

of such laws becoming inconsistent with the provision  

of  Part  III,  such  laws,  to  the  extent  of  their  

inconsistency, shall be void. This is the mandate of the  

Constitution.

21. Therefore, several amendments were made to the said  

Act  keeping in view the broad concept of  social  and  

economic  justice  which  is  one  of  the  main  

constitutional  goals.  In  the  instant  case  I  am  

concerned with some amendments to the said Act by  

amendment Act 68 of 1984 which took effect from 24th  

September 1984. Among several new sections, Section  

132

11(A)  and 17(3A)  were  introduced  by  amendment  to  

the said Act.

22. From the  Statement  of  Objects  and Reasons for  the  

said  amendment  it  will  be  clear  that  the  said  

amendment was brought into existence to give effect to  

the message of social and economic justice based on  

the concept of Social Welfare State on broad principles  

of  human  rights.  The  Statements  of  Objects  and  

Reasons are as follows:

“With the enormous expansion of the State’s role  in  promoting  public  welfare  and  economic  development  since  independence,  acquisition  of  land  for  public  purposes,  industrialization,  building of institutions, etc., has become far more  numerous  than  ever  before.  While  this  is  inevitable, promotion of public purpose has to be  balanced with the rights of the individual whose  land is acquired, thereby often depriving him of  his means of livelihood. Again, acquisition of land  for private enterprises ought not to be placed on  the same footing as acquisition for the State or  for  an  enterprise  under  it.  The  individual  and  institutions who are unavoidably to be deprived  of  their  property  rights  in  land  need  to  be  adequately compensated for the loss keeping in  view the sacrifice they have to make for the larger  interests  of  the  community.  The  pendency  of  acquisition  proceedings  for  long  periods  often  causes  hardship  to  the  affected  parties  and  renders  unrealistic  the  scale  of  compensation  offered to them.

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2. It is necessary, therefore, to restructure the  legislative  framework  for  acquisition  of  land  so  that  it  is  more  adequately  informed  by  this  objective  of  serving  the  interests  of  the  community  in  harmony  with  the  rights  of  the  individual. Keeping the above objects in view and  considering  the  recommendations  of  the  Law  Commission,  the  Land  Acquisition  Review  Committee  as  well  as  the  State  Governments,  institutions  and  individuals,  proposals  for  amendment  to  the  Land  Acquisition  Act,  1894,  were formulated and a Bill for this purpose was  introduced in the  Lok Sabha on the 30th April,  1982. The same has not been passed by either  House  of  Parliament.  Since  the  introduction  of  the Bill, various other proposals for amendment  of the Act have been received and they have also  been  considered  in  consultation  with  State  Governments  and  other  agencies.  It  is  now  proposed to include all these proposals in a fresh  Bill after withdrawing the pending Bill….”

                                                    (emphasis added)

23. It is clear from the aforesaid objects and reasons that  

by  introducing  the  provisions  of  Section  11A  and  

17(3A)  by  way  of  amendment  to  the  Act,  greater  

responsibility was  fastened upon the concerned State  

authorities,  whereby  they  were  obliged  to  make  an  

award within two years of the declaration made under  

Section 6 of the Act. Thus the rights of the land owners  

were  sought  to  be  protected  by  balancing  the  same  

against the rights of the State. In respect of emergency  

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provisions where land is acquired without a hearing, it  

is  provided  under  Section  17(3A)  that  before  taking  

possession either under Section 17(1) and 17(2) it was  

obligatory upon the authorities  concerned to pay 80  

per  cent  of  the  estimated  compensation  to  the  land  

owners. This was also for protecting the right of  the  

land owners.

24. These amendments along with Statement, Objects and  

Reasons are very crucial in interpretation of some of  

the amended provisions. The amendment was brought  

about  in  1984  and  by  that  time,  the  contents  and  

reach of Fundamental Rights in Part III, as interpreted  

by this Court had assumed a very expansive profile. In  

view of the mandate of Article 13, the provision of the  

said  Act  must  be  tested  on  the  anvil  of  the  broad  

interpretation  of  Fundamental  Rights  given  by  this  

Court. In view of the decision of this Court in Maneka  

Gandhi v.  Union of India & Another – (1978) 1 SCC  

248, the interpretation of Part III rights namely rights  

under  Article  14,  19  and  21  given  therein  by  this  

Court, read with Article 141, becomes the law of the  

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land.  Therefore,  the  reach  of  Article  13(1)  is  

correspondingly widened. Thus, the 1984 amendments  

must  be  construed  as  a  conscious  attempt  by  the  

legislature being aware of the expansive interpretation  

of Fundamental Rights by this  Court, to bring the said  

act  consistent  with  the  rights  of  the  citizens  and  

persons in Part III.

25. Despite  the  fact  that  Right  to  Property  in  terms  of  

Article 19(1)(f)  of the Constitution stood deleted from  

Chapter III of the Constitution, vide 44th Constitutional  

Amendment, 1978,  Article  300A of the Constitution  

was  added  by  the  same  Constitutional  Amendment,  

mandating  that  ‘no  person  shall  be  deprived  of  his  

property save by authority of law’.  This indicates that  

the Constitution still mandates that right to property  

may have ceased to be a fundamental right, but it is  

still  protected  by  the  Constitution  and  is  a  

Constitutional  right.  Constitution  also  provides  that  

deprivation of that right cannot be brought about save  

by authority of law.   

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26. It is accepted in every jurisprudence and by different  

political thinkers that some amount of property right is  

an  indispensable  safeguard  against  tyranny  and  

economic oppression of the Government. Jefferson was  

of the view that liberty cannot long subsist without the  

support of  property.  “Property must be secured, else  

liberty cannot subsist” was the opinion of John Adams.  

Indeed the  view that  property  itself  is  the  seed bed  

which must be conserved if other constitutional values  

are  to  flourish  is  the  consensus  among  political  

thinkers  and  jurists.  The  U.S.  Supreme  Court  in  

Dorothy Lynch v.  Household Finance Corporation,  

405 US 538: 31 L Ed. 2d 424  held:

“….the dichotomy between personal liberties and  property rights is a false one. Property does not  have  rights.  People  have  rights.  The  right  to  enjoy property without unlawful deprivation, no  less than the right to speak or the right to travel,  is  in  truth  a  “personal”  right,  whether  the  “property”  in  question  be  a  welfare  check,  a  home,  or  a  savings  account.  In  fact,  a  fundamental interdependence exists between the  personal right to liberty and the personal right  in property. Neither could have meaning without  the other. That rights in property are basic civil  rights  has  long  been  recognized. J.  Locke,  of  Civil  Government  82-85  (1924);  J.  Adams,  A  Defence of  the Constitutions of  Government of  

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the  United  States  of  America,  in  F.  Coker,  Democracy,  Liberty,  and  Property  121-132  (1942);  1  W.  Blackstone,  Commentaries  138- 140...”  (P.552 of the report)

27. Justice  K.K.  Mathew in  his  treatise  on  “Democracy,  

Equality  and  Freedom”:  (1978)  very  categorically  

expressed the view:

“In a Society with a mixed economy, who can be  sure that  freedom in relation to property might  not  be  regarded  as  an  aspect  of  individual  freedom?  People  without  property  have  a  tendency  to  become  slaves.  They  become  the  property  of  others  as  they  have  no  property  themselves.  They  will  come  to  say:  “Make  us  slaves, but feed us”. Liberty, independence, self- respect, have their roots in property. To denigrate  the institution of property is to shut one’s eyes to  the stark reality evidenced by the innate instinct  and  the  steady  object  of  pursuit  of  the  vast  majority of people. Protection of property interest  may  quite  fairly  be  deemed  in  appropriate  circumstances an aspect of freedom.” (P.38-39)

28. Explaining  the  interrelation  between  the  right  of  

property and personal liberty, Learned Hand ruled that  

property right is a personal right. (Learned Hand : The  

Spirit of Liberty)

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29. In our Constitution the word ‘law’ finds place both in  

Article 21 and in Article 300A. The term ‘law’ in Article  

21 has been interpreted by the Supreme Court from  

time to time. In  A.K. Gopalan v.  State of Madras,  

(AIR 1950 SC 27), the expression ‘law’ meant enacted  

law,  meaning  thereby  if  the  law  was  passed  by  a  

competent  legislature  and  was  not  violative  of  any  

other provision of the Constitution, the law would be  

valid. But the said interpretation does no longer hold  

good after the epoch making decision of this Court in  

Maneka Gandhi (supra), where this Court held the law  

does  not  mean any  enacted  piece.  According  to  the  

majority  decision in  Maneka Gandhi (supra)  “law is  

reasonable law not any enacted piece” (para 85 page  

338 of the report)

30. In  Maneka Gandhi (supra)  this  Court  held  that  the  

expression ‘procedure established by law’ in Article 21  

means a procedure established by a just, reasonable  

and fair law. Thus the concept of due process of law  

was incorporated in our constitutional  framework by  

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way  of  judicial  interpretation  even  though  it  was  

rejected by the framers.

31. As a  result  of  incorporation  of  this  doctrine  of  ‘due  

process’ in our constitutional framework, the concept  

of Articles 14 and 21 has undergone a sea-change. In  

Maneka  Gandhi (supra),  Justice  Bhagwati,  as  His  

Lordship then was, gave a very dynamic interpretation  

of Articles 14 and 21.

32. Even prior to the decision in Maneka Gandhi (supra),  

a Constitution Bench of this Court in  R.C. Cooper v.  

Union  of  India –  (1970)  1  SCC  248  also  gave  a  

composite and integrated interpretation of rights under  

Part III  of  the Constitution.  The question before this  

Court in  R.C. Cooper (supra) was whether the rights  

under  Articles  19(1)(f)  and  31(2)  are  mutually  

exclusive.  Answering the said question, the majority of  

the  Constitution  Bench,  speaking  through  Shah,  J.  

analysed the different features of Fundamental Rights  

in para 52 at page 289 of the report and came to a  

conclusion that part III of the Constitution “weaves a  

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pattern of guarantees on the texture of basic human  

rights. The guarantees delimit the protection of those  

rights in their allotted fields: they do not attempt to  

enunciate distinct rights.” (page 289)

33. In  the  following  paragraph  53,  the  learned  judges  

further made it clear by saying:

“acquisition must be under the authority of a law  and the expression “law” means a law which is  within  the  competence  of  the  Legislature,  and  does  not  impair  the  guarantee  of  the  rights  in  Part III.”

34. In  view  of  this  clear  enunciation  of  law  by  two  

Constitution Benches of this Court and the wording of  

Article  300A of  the  Constitution,  let  us examine the  

correctness  of  the  impugned  Judgment  of  the  High  

Court which relies only on S.P. Jain’s case (supra).

35. The facts are totally different in S.P. Jain (supra).  It is  

clear from the facts in S.P. Jain (supra) that the third  

respondent,  the  Krishi  Utpadan Mandhi Samity,  in  

whose favour the land was acquired for construction of  

market-yard,  resolved  on  13th January,  1989  to  

withdraw from the acquisition as it was suffering from  

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a fund crunch and the proposed Mandhi site was far  

away from Baraut (para 5).

36. The  second  round  of  litigation,  out  of  which  the  

judgment in  S.P.  Jain (supra)  was rendered by this  

Court,  was filed after  the aforesaid resolution of  the  

third respondent was passed.  Challenging the same,  

the writ petition was filed before the High Court on 10th  

August, 1989 wherein the writ petitioner prayed that  

the State of Uttar Pradesh (the first respondent), The  

Collector,  Merrut  (the  second  respondent)  and  the  

Mandhi (the third respondent) be directed by Writ of  

Mandamus to make and publish an award in respect  

of  the  land.  In  that  context  this  Court  examined  

various provisions of the Act and gave a direction upon  

the first and second respondents to publish an award  

within 12 weeks and imposed a cost of Rs.10,000/- on  

the third respondent. In fact the writ petition in terms  

of the prayer was allowed.

37. In coming to the aforesaid conclusion this Court held  

that  in  a  case  where  the  emergency  provisions  are  

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invoked under Section 17 of the Act, the provisions of  

Section 11A will not apply. And this Court came to an  

incidental finding, though it was not strictly in issue,  

that  taking  over  the  possession  without  making  

payment under Section 17 (3A) of the Act is not illegal.  

This finding was not at all necessary for deciding the  

issue, namely whether prayer in the writ petition for  

publishing the award was correctly made or not.

38. It  has  been  held  in  the  decision  of  this  Court  in  

Municipal  Corporation  of  Delhi v.  Gurnam  Kaur,  

reported in AIR 1989 SC 38 that when a point does not  

fall for decision of a Court but incidentally arises for its  

consideration and is not necessary to be decided for  

the ultimate decision of the case, such a decision does  

not form a part of the ratio of the case but the same is  

treated as a decision passed sub silentio. The concept  

of  ‘sub  silentio’  has  been  explained  by  Salmond  on  

Jurisprudence “12th Edition” as follows:

“A decision passes sub silentio, in the technical  sense  that  has  come  to  be  attached  to  that  phrase, when the particular point of law involved  in the decision is not perceived by the Court or  

143

present to its mind. The Court may consciously  decide in favour of one party because of point A,  which it considers and pronounces upon. It may  be  shown,  however,  that  logically  the  Court  should  not  have  decided  in  favour  of  the  particular party unless it also decided point B in  his  favour;  but  point  B  was  not  argued  or  considered by the Court. In such circumstances,  although point  B was logically  involved in  the  facts  and  although  the  case  had  a  specific  outcome,  the  decision  is  not  an  authority  on  point  B.  Point  B is  said to pass sub silentio.”  (page 43)

39. The aforesaid passage has been quoted with approval  

by the three Judge Bench in  Gurnam Kaur  (supra).  

This  Court  in  Gurnam  Kaur  (supra),  in  order  to  

illustrate the aforesaid proposition further relied on the  

decision of the English Court in  Gerard v.  Worth of  

Paris Ltd., reported in 1936 (2) All England Reports  

905.  In  Gerard,  the  only  point  argued  was  on  the  

question of priority of the claimant’s debt. The Court  

found that no consideration was given to the question  

whether a garnishee order could be passed. Therefore,  

a point in respect of which no argument was advanced  

and no citation of authority was made is not binding  

and would not be followed. This Court held that such  

decisions, which are treated having been passed sub  

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silentio and without argument, are of no moment. The  

Court further explained the position by saying that one  

of the chief reasons behind the doctrine of precedent is  

that  once  a  matter  is  fully  argued  and  decided  the  

same  should  not  be  reopened  and  mere  casual  

expression carry no weight. In  Gurnam Kaur (supra)  

this  Court  conclusively  held  that  not  every  passing  

expression  of  a  Judge,  however  eminent,  can  be  

treated as “ex cathedra statement, having the weight of  

authority” (see para 12 page 43)

40. Similarly, it has also been held by the majority opinion  

in  Constitution  Bench  of  this  Court  in  the  case  of  

Madhav Rao Jivaji Rao Scindia v.  Union of India,  

reported in  AIR  1971 SC 530 that  “it  is  difficult  to  

regard a word, a clause or a sentence occurring in a  

judgment of this Court, divorced from its context, as  

containing a full exposition of the law on a question  

when the question did not even fall to be answered in  

that judgment.” (page 578 of the report)

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41. In another Constitution Bench decision of this court in  

Padma Sundara Rao (Dead) & Ors., v. State of Tamil  

Nadu & others reported in (2002) 3 SCC 533, similar  

views have been expressed by this Court in para 9, at  

page  540  of  the  report  wherein  the  unanimous  

Constitution Bench of this Court opined:

“9. Court should not place reliance on decisions  without  discussing  as  to  how  the  factual  situation  fits  in  with  the  fact  situation  of  the  decision  on  which  reliance  is  placed.  There  is  always peril in treting the words of a speech or  judgment  as  though  they  are  words  in  a  legislative enactment, and it is to be remembered  that judicial utterances are made in the seting of  the facts of a particular case, said Lord Morris in  Herrington V. British Railways Board - (1972) AC  877. Circumstantial flexibility, one additional or  different  fact  may  make  a  world  of  difference  between conclusions in two cases.”

42. The reason behind enacting Section 17 (3A) of the Act  

is  clear  from  the  Statement  of  Object  and  Reasons  

extracted  above.  It  is  clear  therefore  the  provisions  

were incorporated in order to strike a balance between  

the rights of the State and those of the land owner. A  

clear  legislative  intent  in  Section  17(3A)  was  thus  

expressed that  before  taking  possession of  any land  

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under sub-section (1) or sub-section (2) of Section 17,  

the  Collector  shall  tender  payment  of  80%  of  the  

estimated compensation for such land to the persons  

interested  and  entitled  thereto.  This  is  the  clear  

mandate of law.  

43. In view of  the principles enunciated in  R.C. Cooper  

(supra)  and  Maneka Gandhi  (supra),  reasonableness  

in law has to be its implicit content. Here no challenge  

to  the  reasonableness  of  Section  17  (3A)  is  either  

argued  or  considered  by  this  Court.  But  when  law  

gives  a  specific  mandate  on the  State  to  tender  the  

payment before taking possession under Section 17(1)  

and Section 17(2) by invoking the emergency powers,  

to  hold  that  the  taking  over  of  possession  without  

complying  with  that  mandate  is  legal  is  clearly  to  

return  a  finding  which  is  contrary  to  the  express  

provision of the statute. Such a finding is certainly not  

on  a  reasonable  interpretation  of  Section  17  (3A).  

Therefore, the casual observation in para 17 (page 375)  

in  S.P. Jain (supra) to the effect of taking possession  

of  land  under  emergency  provision  and  without  

147

making the payment mandated under Section 17(3A) is  

a valid mode of taking possession is in clear violation  

of Section 17(3A) and be regarded made per incuriam  

and does not have the effect of a binding precedent.

44. If  I  look  at  the  emergency  provisions  of  the  statute  

which  empowers  the  State  to  acquire  land  by  

dispensing with the provisions of making an enquiry it  

is clear that the said provision is a drastic provision. It  

is well-known that the provisions of the said Act are  

expropriatory  in  nature  and  must  be  strictly  

construed. In that expropriatory legislation, Section 17  

is  a  very  drastic  provision  as  Section 17  of  the  Act  

seeks  to  authorize  acquisition  and  taking  over  of  

possession without hearing the land owner. This Court  

held  that  the  right  of  hearing  which  is  given under  

Section 5A of the Act and which is taken away in view  

of the emergency acquisition is a very valuable right  

and is akin to a fundamental right. (See Dev Sharan &  

Ors.  v. State of U.P. & Ors. - JT 2011 (3) SC 102).  

Therefore, when that right is taken away and the land  

is  acquired  by  invoking  the  emergency  provision  of  

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Section  17(3A)  to  hold  that  even  the  safeguards  

provided under Section 17(3A) are not mandatory and  

taking over of possession without complying with the  

provisions of Section 17 (3A) is not illegal is to overlook  

the clear provisions of the Act and come to a finding  

which is contrary to the Act. This Court is unable to  

accept  that  the  taking  over  of  the  possession  by  

invoking Section 17(1) or Section 17(2) of the Act and  

without making the payment under Section 17(3A) is  

legal taking over of possession.   

45. This Court is of the view that Section 17(3A) is not an  

isolated  provision.  Section  17(3A)  figures  very  

prominently  as  part  of  the  statutory  mechanism  in  

Section 17 of the Act which confers special powers in  

cases of urgency. Section 17 has four sub sections and  

all  these  sub  sections  comprise  a  composite  

mechanism and are closely intertwined. Power under  

one sub section cannot be exercised without complying  

with the conditions imposed by the other sub section.  

For a proper appreciation of this question, section 17  

with all its sub sections are set out:

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“17.  Special  powers  in  cases  of  urgency.  (1)  In  cases  of  urgency,  whenever  the  appropriate  Government, so directs, the Collector, though no  such  award  has  been  made,  may,  on  the  expiration of fifteen days from the publication of  the notice mentioned in section 9, sub-section (1),  take possession of any land needed for a public  purpose.  Such  land  shall  thereupon  vest  absolutely  in  the  Government,  free  from  all  encumbrances.  

(2) Whenever, owing to any sudden change in the  channel  of  any  navigable  river  or  other  unforeseen emergency, it becomes necessary for  any  Railway  administration  to  acquire  the  immediate  possession  of  any  land  for  the  maintenance of their traffic or for the purpose of  making thereon a river-side or ghat station, or of  providing convenient connection with or access to  any such station, or the appropriate Government  considers it necessary to acquire the immediate  possession  of  any  land  for  the  purpose  of  maintaining any structure or system pertaining to  irrigation,  water  supply,  drainage,  road  communication or electricity, the Collector may,  immediately  after  the  publication  of  the  notice  mentioned  in  sub-section  (1)  and  with  the  previous sanction of the appropriate Government,  enter  upon  and  take  possession  of  such  land,  which  shall  thereupon  vest  absolutely  in  the  Government free from all encumbrances:  

Provided  that  the  Collector  shall  not  take  possession of any building or part of a building  under  this  sub-section  without  giving  to  the  occupier thereof at least forty-eight hours' notice  of his intention so to do, or such longer notice as  may  be  reasonably  sufficient  to  enable  such  occupier  to  remove  his  movable  property  from  such  building  without  unnecessary  inconvenience.  

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(3)  In  every case  under  either  of  the  preceding  sub-sections  the  Collector  shall  at  the  time  of  taking possession offer to the persons interested  compensation for the standing crops and trees (if  any)  on  such  land  and  for  any  other  damage  sustained  by  them  caused  by  such  sudden  dispossession  and  not  excepted  in  section  24;  and, in case such offer is not accepted, the value  of such crops and trees and the amount of such  other  damage  shall  be  allowed  for  in  awarding  compensation for the land under the provisions  herein contained.  

(3A) Before taking possession of any land under  sub-section (1)  or  sub-section  (2),  the  Collector  shall, without prejudice to the provisions of sub- section (3),-  

(a)  tender payment of  eighty per centum of  the  compensation for such land as estimated by him  to the persons interested entitled thereto, and  

(b) pay it to them, unless prevented by some one  or more of the contingencies mentioned in section  31, sub-section (2),  

and  where  the  Collector  is  so  prevented,  the  provisions of section 31, sub-section (2), (except  the second proviso thereto),  shall  apply as they  apply to the payment of compensation under that  section.  

(3B)  The  amount  paid  or  deposited  under  sub- section  (3A),  shall  be  taken  into  account  for  determining  the  amount  of  compensation  required  to  be  tendered  under  section  31,  and  where the amount so paid or deposited exceeds  the compensation awarded by the Collector under  section  11,  the  excess  may,  unless  refunded  within  three  months  from  the  date  of  the  Collector's  award,  be  recovered as  an arrear  of  land revenue.  

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(4)  In  the  case  of  any  land  to  which,  in  the  opinion  of  the  appropriate  Government,  the  provisions of sub-section (1) or sub-section (2) are  applicable,  the  appropriate  Government  may  direct that the provisions of section 5A shall not  apply, and, if it does so direct, a declaration may  be made under section 6 in respect of the land at  any  time  after  the  date  of  publication  of  the  notification under section 4, sub-section (1).”

46. Sub-section  (3A)  of  Section  17  is  linked  with  sub  

section (2) of Section 31. Sub section (2) of Section 31  

runs thus:

“(2)  If  they shall  not consent to receive it,  or  if  there  be  no  person  competent  to  alienate  the  land, or if there be any dispute as to the title to  receive  the  compensation  or  as  to  the  apportionment  of  it,  the  Collector  shall  deposit  the amount of the compensation in the Court to  which  a  reference  under  section  18  would  be  submitted:  

Provided  that  any  person  admitted  to  be  interested  may  receive  such  payment  under  protest as to the sufficiency of the amount:  

Provided also  that  no  person who  has  received  the amount otherwise than under protest shall be  entitled  to  make  any  application  under  section  18:  

Provided also that nothing herein contained shall  affect the liability of any person, who may receive  the  whole  or  any  part  of  any  compensation  awarded under this Act, to pay the same to the  person lawfully entitled thereto.”

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47. It is thus clear that sub section (3A) of Section 17 read  

with sub section (2) of  Section 31 of  the Act form a  

composite  statutory  scheme.  The  said  scheme  has  

been legislatively framed to balance the promotion of  

public  purpose  in  acquisition  with  rights  of  the  

individual whose land is acquired. This is clear from  

the Statement of Objects and Reasons which was kept  

in view for bringing about the amendment of the said  

Act  by  Amendment  Act  68  of  1984.  By  the  said  

amendment  Section  17(3A)  was  brought  on  the  

statute.

48. Therefore,  the  provision of  Section 17(3A)  cannot  be  

viewed in isolation as it is an intrinsic and mandatory  

step  in  exercising  special  powers  in  cases  of  

emergency. Sections 17(1) and 17(2) and 17(3A) must  

be  red  together.  Section  17(1)  and  17(2)  cannot  be  

worked out in isolation.

49. It  is  well  settled  as  a  canon  of  construction  that  a  

statute has to be read as a whole and in its context. In  

Attorney General v.  HRH Prince Earnest Augustus  

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of  Hanover,  reported  in  (1957)  1  AER  49,  Lord  

Viscount Simonds very elegantly stated the principle  

that it is the duty of Court to examine every word of a  

statute  in  its  context.  The learned Law Lord further  

said  that  in  understanding  the  meaning  of  the  

provision, the Court must take into consideration “not  

only other enacting provisions of the same statute, but  

its  preamble,  the  existing  state  of  the  law,  other  

statutes in pari material, and the mischief which I can,  

by those and other legitimate means, discern that the  

statute  was  intended  to  remedy”  (page  53  of  the  

report).  

50. Lord Normand expressed the same view differently and  

which is equally pertinent and worth remembering and  

parts of which are excerpted below:

“The key to the opening of every law is the reason  and  spirit  of  the  law  –  it  is  the  animus  imponentis,  the  intention  of  the  law  maker,  expressed  in  the  law  itself,  taken  as  a  whole.  Hence  to  arrive  at  the  true  meaning  of  any  particular  phrase  in  a  statute,  that  particular  phrase  is  not  to  be  viewed  detached  from  its  context … meaning by this as well the title and  the preamble as the purview or enacting part of  the statute” (page 61 of the report).

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51. These principles have been followed by this Court in its  

Constitution  Bench  decision  in  Union  of  India v.  

Sankalchand Himatlal Sheth & anr., [(1977) 4 SCC  

193].  At page 240 of the report, Justice Bhagwati, as  

His Lordship then was, in a concurring opinion held  

that  words in a statute  cannot  be read in isolation,  

their colour and content are derived from their context  

and every word in a statute is to be examined in its  

context. His Lordship explained that the word context  

has  to  be  taken  in  its  widest  sense  and  expressly  

quoted the formulations of Lord Viscount Simonds, set  

out above. (See para 54, P.241 of the report).

52. In this connection,  if  I  compare the normal mode of  

vesting of acquired property under Section 16 of the  

Act  with  the  mode  of  vesting  under  emergency  

provisions  of  Section  17  thereof,  I  will  discern  that  

under the said Act the vesting of acquired property in  

the State presupposes compliance with two conditions.  

Under Section 16, first there has to be an award under  

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section  11  and then  there  has  to  be  taking  over  of  

possession.  Only  thereupon  the  land  shall  vest  

absolutely  in  the  state,  free  from all  encumbrances.  

Section 16 of the act which makes it clear is as under:

“16.  Power to take possession.- When  the  Collector  has  made  an  award  under  section 11, he may take possession of the land,  which shall  thereupon vest absolutely  in the  Government, free from all encumbrances.”

53. But  in  case  of  emergency  acquisition,  possession  is  

taken before  the  making  of  an  award.  This  is  clear  

from section 17(1) and section 17(2). But the intention  

of the legislature is that even though the award is not  

made, payment mandated under Section 17(3A) must  

be  made  before  possession  is  taken  either  under  

Section  17(1)  and  17(2).  Therefore  this  provision  

relating to payment under Section 17(3A) is a condition  

precedent to the vesting of  land under Section 17(1)  

and 17(2). In the later part of this judgment, I  shall  

discuss some authorities which have opined that when  

possession is illegally taken over without following the  

conditions  precedent  for  taking  such  possession,  

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vesting of a property in law does not take place in the  

authority  which  thus  illegally  enters  upon  the  

property.  

54. Judicial  opinion  is  uniformly  in  favour  of  strict  

construction of an expropriatory law which admittedly  

Land  Acquisition  Act,  1894  is.    Reference  in  this  

connection  can  be  made  to  the  observations  of  

Cottenham, L.C. in  Webb v.  Manchester and Leeds  

Rail  Co  .,   [(1839),  4  Myl.  &  Cr.116]  where  the  Lord  

Chancellor held:

“The powers are so large - it may be necessary for  the benefit of the people – but they are so large,  and  so  injurious  to  the  interests  of  the  individuals,  that  I  think it  is  the duty of  every  court  to  keep  them  most  strictly  within  those  powers; and if there be any reasonable doubt as  to  the  extent  of  their  powers,  they  must  go  elsewhere and get enlarged powers; but they will  get none from me by way of construction of their  Act of Parliament.”

55. In the Indian context, as early as in 1916.  Judicial  

committee of Privy Council in Secretary of State for  

India v. Birendra Kishore Manikya (ILR 44 Cal 328),  

speaking  through  Lord  Dunedin  held,  ‘the  Act  is  

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drastic in its character and makes invasion in private  

rights…matter  must  be  brought  “strictly  within  its  

provisions”.’ (p 343)

56. Cripps in “The Law of Compensation for Land Acquired   

under Compulsory Powers” (8th ed., Stevens and Sons,  

Ltd.)  has  quoted  the  above  opinion  of  the  Lord  

Chancellor  and further  dealt  with this  aspect  of  the  

matter  at  page  27  of  the  book  wherein  the  learned  

author  said,  “Where  the  promoters  of  a  public  

undertaking  have  authority  from  Parliament  to  

interfere with private  property on certain terms, any  

person whose property is interfered with by virtue of  

that authority has a right to require that the promoters  

shall comply with the letter of the enactment, so far as  

it makes provision on his behalf.” Again at page 100,  

the  learned  author  has  stressed  the  above  position  

very strongly to the following effect:-

“If  no  consent  has  been  given,  and  the  promoters have not complied with the statutory  conditions  as  to  entry  on  lands,  they  can  be  proceeded against as trespassers by any owner  who has an interest in the lands. The principle  is that all statutory conditions which have been  

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imposed as condition precedent to an entry on  lands must be fulfilled.”

57. In support  of  this  aforesaid  proposition,  the  learned  

author has relied on  Parkdale Corporation v.  West  

[(1887), 12 App. Cas. 602, 614].

58. And again at page 173, the learned author opines:

“It must be borne in mind that promoters have  no powers, other than those comprised in their  special Acts and the Acts therewith incorporated,  to enter upon or take lands against the wish of  the  owners.  It  is  incumbent  on  promoters  to  comply  with  all  conditions  and  limitations  imposed  upon them,  and,  unless  they  have  so  complied, any interested owner can restrain them  by injunction from taking, as against him, further  proceedings”.

I  am  in  respectful  agreement  with  the  aforesaid  

principles.

59. I  find  that  same  principles  have  been  laid  down in  

Cooley’s  ‘A Treatise  on the  Constitutional  Limitations’   

Volume II, (Eight Edition). Cooley while dealing with the  

concept  of  ‘Eminent  Domain’  in  Chapter  15  opined  

(p.1120):

“…whenever in pursuance of law the property of  an individual  is  to  be  divested by proceedings  

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against his will, a strict compliance must be had  with all the provisions of law which are made for  his protection and benefit, or the proceeding will  be  ineffectual.  Those  provisions  must  be  regarded  as  in  the  nature  of  conditions  precedent,  which  are  not  only  to  be  observed  and  complied  with  before  the  right  of  the  property  owner  is  disturbed,  but  the  party  claiming authority under the adverse proceeding  must show affirmatively such compliance”.

(emphasis added)

60. The learned author explained the aforesaid proposition  

with certain illustration which very closely fit in with  

the legal framework with which I am concerned in this  

case. The learned author said:

“So  if  the  statute  vests  the  title  to  lands  appropriated in the state or in a corporation on  payment therefore being made, it is evident that,  under the rule stated, the payment is a condition  precedent to the passing of the title.”  

(Emphasis added)

61. Reference in  this  connection should be made to  the  

decision of  Supreme Court  of  Vermont  in  Henry B.  

Stacey v  The Vermont Central Railroad Co, (27 Vt.  

39).  In  that  case,  while  discussing  the  concept  of  

Eminent Domain, the court after referring to various  

decisions held “that this provision (relating to deposit  

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of  the  appraised value)  should  be  considered in  the  

nature  of  a  condition  precedent,  not  only  to  the  

acquisition of the legal title to the land, but also to the  

right to enter and take the permanent possession of  

the land for the use of the corporation.”

62. The expression condition precedent has been defined in  

Words  and  Phrases  (permanent  edition,  Vol.  8.  St.  

Paul, Minn, West Publishing Co., 1951, p 629) as those  

which ‘must be punctually performed before the estate  

can  vest’.  Similarly,  in  Bouvier’s  Law  Dictionary,  (A  

Concise  encyclopedia  of  the  Law,  Rawle’s  Third  

Revision, Vol. 1, Vernon Law Book Company, 1914, p  

584), virtually the same principles have been followed.  

The learned author expressed this even more strongly  

by explaining that:

“The  effect  of  a  Condition  precedent  is,  when  performed,  to  vest  an  estate,  give  rise  to  an  obligation,  or  enlarge  an  estate  already  vested;  […]. Unless a condition precedent be performed,  no  estate  will  vest;  and  this  even  where  the  performance is prevented by the act of God or of  the law; […].”

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63. In  Wharton’s  Law  Lexicon,  it  has  been  held  that  

conditions  precedent  in  their  primary  meaning  are  

those events, but for the happenings of which rights  

will not arise. (Wharton’s Law Lexicon, 1976, reprint, p  

228).

64. In the case of Gujarat Electricity Board v Girdharlal  

Motilal And Anr (AIR 1969 SC 267), this court while  

dealing with the power of the State Electricity Board to  

purchase the property of the licensee held that right  

can be exercised only in the manner provided in the  

act and not in any other way. The court held that since  

this power of the Board under the law is to interfere  

with the  property  rights  of  the  licensee,  such power  

will have to be strictly construed. In laying down the  

said  principle  this  court  relied  on  the  well-known  

doctrine in case of Nazir Ahmad v King Emperor [AIR  

1936 PC 253] that when a power is to be exercised in a  

manner it  has to be exercised in that manner alone  

and  in  no  other  manner.  In  two  other  recent  

judgments,  this  court  reiterated  the  same  principle,  

and held that expropriatory statute, as is well known,  

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must be strictly construed. [See Hindustan Petroleum  

corpn.  Ltd.,  v.  Darius  Shapur  Chenai  and  others  

reported in (2005) 7 SCC 627]. The said principle has  

also been followed by this Court in the case of Bharat  

Petroleum Corporation Ltd. v  Maddula Ratnavalli  

and Others [(2007) 6 SCC 81]  where learned judges  

relying  on  Hindustan  Petroleum reiterated  the  same  

principle  of  strict  construction  of  expropriatory  

legislation (p 91).

65. In  an  earlier  decision  Jilubhai  Nanbhai  Khachar  

and others v State of Gujarat and Anr [1995 Suppl  

(1) SCC 596], this Court while dealing with the concept  

of  eminent  domain  and  right  to  property  in  Article  

300A held as follows (para 50, p. 628):

“50.  All  modern  constitutions  of  democratic  character  provide  payment  of  compensation  as  the  condition  to  exercise  the  right  of  expropriation. Commonwealth of Australia Act, a  Frecnh  Civil  Code  (Article  545),  the  5th  Amendment of the Constitution of USA and the  Italian  constitution  provided  principles  of  “just  terms”, “Just indemnity”, Just compensation” as  reimbursement for the property taken, have been  provided for. As pointed out in Halsbury’s Law of  England  that  “when Parliament  has  authorized  the  compulsory acquisition of  land it  is  almost  invariably  provided  for  payment  of  a  money  

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compensation  to  the  person  deprived  of  his  interest in it.”

66. On the  basis  of  aforesaid principles,  I  hold that  the  

requirement of payment under section 17(3A) is in the  

nature of condition precedent clamped by the statute  

before taking possession under emergency acquisition  

by the  State.  The vesting contemplated either  under  

Section 17(1) or 17(2) of this Act is conditioned upon  

payment mandated under Section 17(3A).  This is clear  

from  the  opening  words  of  Section  17(3A)  namely  

“before  taking  possession  of  any  land  either  under  

sub-section  (1)  or  (2),  Collector  shall…….  tender  

payment.”  Therefore, the eminent domain concept is  

subject to the aforesaid statutory condition and must  

be read subject to due process concept introduced in  

our constitutional law in Maneka Gandhi (supra). If I  

read, Section 17(3A) as I must, consistently with the  

constitutional doctrine of due process as articulated in  

the  expression  ‘authority  of  law’  under  Article  300A  

which constitutionally protects deprivation of a right to  

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property, save by authority of law, the conclusion in  

my judgment is  inescapable  that  the  requirement  of  

section 17(3A) constitutes the authority of law within  

the meaning of Article 300A. Therefore, in the context  

of aforesaid statutory dispensation and constitutional  

provision, the debate whether the provision of section  

17(3A)  is  mandatory  or  directory  does  not  present  

much difficulty for  the reasons discussed above and  

also for the following reasons.

67. Basically, the language used is ‘shall’ which primarily  

indicates  mandatory  compliance.  That  apart,  in  the  

context  of  the  nature  of  statute  which is  admittedly  

expropriatory  in  character  and  the  nature  of  the  

statutory  requirement under section 17(3A)  which is  

clearly and undoubtedly a condition precedent to the  

taking  over  of  possession  in  emergency  acquisition,  

there  can  be  no  doubt  that  the  requirement  under  

section 17(3A) is mandatory.

68. Section  17(3A)  has  been  enacted  for  protecting  the  

rights  of  deprived  land-loser  in  an  emergency  

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acquisition.  The said provision is therefore based on  

reason, justice and fairplay. Since the said provision  

has  been  introduced  by  way  of  an  amendment  as  

noted above to balance the right of the state as against  

the  interest  of  the  land-loser,  the  State’s  power  of  

eminent domain is expressly made subject to aforesaid  

statutory provision as also the constitutional right to  

property  protected  under  Article  300A.  Right  to  

property has been pronounced as fundamental human  

right  by  this  Court  in  Chairman,  Indore  Vikas  

Pradhikaran v.  Pure  Industrial  Coke & Chemicals  

Ltd., and others reported in (2007) 8 SCC 705.

69. The expression ‘law’ which figures both in Article 21  

and Article 300A must be given the same meaning. In  

both the cases the law would mean a validly enacted  

law. In order to be valid law it must be just, fair and  

reasonable having regard to the requirement of Article  

14 and 21 as explained in  Maneka Gandhi (supra).  

This is especially so, as ‘law’ in both the Articles 21  

and 300A is  meant  to  prevent  deprivation of  rights.  

Insofar as Article 21 is concerned, it is a Fundamental  

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Right  whereas  in  Article  300A  it  is  a  constitutional  

right which has been given a status of a basic human  

right.

70. I, therefore, hold that Section 17(3A) of the Act is a law  

which  has  been  enacted  to  prevent  deprivation  of  

property rights guaranteed under Article 300 A. This  

provision of Section 17(3A) must therefore be given a  

very broad interpretation to mean a law that gives a  

fair, just and reasonable protection of the land-loser’s  

constitutional right to property.  

71. Therefore,  the provisions of  section 17(3A) read with  

Article 300A must be liberally construed. Reference in  

this connection be made to the majority opinion in the  

Constitution  Bench  decision  in  the  case  of  Madhav  

Rao Jivaji Rao Scindia  (supra).  Shah, J., speaking  

for the majority opinion observed (para 33, p 576):

“The  court  will  interpret  a  statute  as  far  as  possible, agreeably to justice and reason and that  in case of two or more interpretations, one which  is more reasonable and just will be adopted, for  there  is  always  a  presumption  against  the  law  maker  intending  injustice  and  unreason.  The  court  will  avoid  imputing  to  the  Legislature  an  intention  to  enact  a  provision  which  flouts  

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notions of justice and norms of fairplay, unless a  contrary intention is manifest from words plain  and unambiguous. A provision in a statute will  not be construed to defeat its manifest purpose  and general values which animate its structure.  In  an  avowedly  democratic  polity,  statutory  provisions ensuring the security of fundamental  human rights including the right to property will,  unless  the  contrary  mandate  be  precise  and  unqualified,  be  construed  liberally  so  as  to  uphold  the  right.  These  rules  apply  to  the  interpretation  of  constitution  and  statutory  provisions alike.”

72. On the above premise, taking over a possession of land  

without  complying  with  the  requirement  of  section  

17(3A)  is  clearly  illegal  and in  clear  violation  of  the  

statutory  provision  which  automatically  violates  the  

constitutional guarantee under Article 300A. A passing  

observation to the contrary in  S.P. Jain (supra)  must  

pass sub silentio being unnecessary in the facts of the  

case as otherwise such a finding is per incuriam, being  

in violation of the statute.  A fortiorari the said finding  

cannot be sustained as a binding precedent.

73. For the reason aforesaid, this Court holds that the writ  

petition cannot be dismissed in view of the decision in  

S.P.  Jain (supra)  which  was  decided  on  totally  

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different facts.  The judgment of the High Court is set  

aside.

74. This court further holds that in all cases of emergency  

acquisition  under  section  17,  the  requirement  of  

payment under section 17(3A) must be complied with.  

As  the  provision  of  section  17(1)  and  section  17(2)  

cannot  be  worked  out  without  complying  with  

requirement of payment under section 17(3A) which is  

in the nature of  condition precedent.  If section 17(3A)  

is not complied with, the vesting under section 17(1)  

and  section  17(2)  cannot  take  place.  Therefore,  

emergency acquisition without complying with section  

17(3A)  is  illegal.  This  is  the  plain  intention  of  the  

statute which must be strictly construed.  Any other  

construction, in my opinion, would lead to diluting the  

Rule of Law.

75. However, coming to the question of relief in the instant  

case, the Court has to take note of the fact situation.  

Admittedly, possession of the land has been taken and  

same  has  been  handed  over  to  the  beneficiary  on  

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which construction had taken place  and third  party  

interests  had  arisen.  It  is  very  difficult  to  put  the  

hands  of  the  clock  back  now,  despite  the  aforesaid  

declaration of law by the Court. This Court, therefore,  

has to think in terms of adequately compensating the  

appellants.  In  the  special  facts  of  this  case,  

compensation in respect of the land acquired insofar  

as the appellants are concerned cannot be decided on  

the basis of the date of notice under Section 4.

76. In  view  of  the  discussions  above,  the  compensation  

has  to  be  fixed  with  regard  to  the  value  of  the  

appellant’s  land  as  on  the  date  of  filing  of  the  writ  

petition  which  was  in  March,  2006  before  the  High  

Court.  The section 4 notification must be deemed to  

have  been  issued  on  March  1,  2006  and  the  

compensation must be worked out on that basis. An  

award on that basis must be passed by the Collector  

within four months from date and the appellants are  

given liberty,  if  so advised, to challenge the same in  

appropriate  proceedings.  All  questions  relating  to  

compensation  in aforesaid  proceeding  are  kept  open  

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for both the parties. As the respondent – the acquiring  

authority has proceeded illegally in the matter, it must  

pay costs of Rupees one lakh in favour of Allahabad  

High  Court  Mediation  Centre  within  a  period  of  six  

weeks from date. The State is at liberty to recover the  

same from the erring officials.  

77. The appeal is, thus, allowed with costs as aforesaid.  

.............................................J.       [Asok Kumar Ganguly]   

New Delhi August 18, 2011

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REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.24 OF 2009

M/s. Delhi Airtech Services  Pvt. Ltd. & Anr.     … Appellants

Versus

State of U.P. & Anr.   … Respondents

O R D E R  

In view of the divergence of opinion on conclusions and also on  

various legal questions discussed in two separate judgments by us, the  

matter is required to be placed before the Hon’ble the Chief Justice of  

India  for  reference  to  a  larger  Bench  to  resolve  the  divergent  views  

expressed  in  both  the  judgments  and  to  answer  the  questions  of  law  

framed.

.............................................J.       [Asok Kumar Ganguly]   

.............................................J.            [Swatanter Kumar]   

New Delhi August 18, 2011

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