SUPREME COURT OF INDIA ON THE RIGHTS GRANTED DURING ACQUISITION OF PROPERTY UNDER LAND ACQUSITION ACT, 1894.

REAL ESTATE UPDATE

17th May 2024

Issue No. 4/24-25

SUPREME COURT OF INDIA ON THE RIGHTS GRANTED DURING ACQUISITION OF PROPERTY UNDER LAND ACQUSITION ACT, 1894.

 

BACKGROUND

  • In the year 2010, Kolkata Municipal Corporation acquired property of one Birinchi Shah in exercise of powers under Section 352 of the Kolkata Municipal Corporation Act, 1980 by deleting his name from the category of owner and inserting its own name in the official land records.
  • Writ Petition No. 930 of 2016 was filed before the High Court, by the executor to the estate of Birinchi Shah, inter alia, seeking an order quashing the alleged acquisition as illegal and to restore their name as owners in the official records.
  • The Division Bench of High Court held that the Kolkata Municipal Corporation purported to acquire the Property under Section 352(a) of the Kolkata Municipal Corporation Act, 1980 when there is no power of compulsory acquisition. The learned single Judge therefore quashed and set-aside the alleged action of acquisition.
  • The Kolkata Municipal Corporation filed Writ Appeals bearing APO No. 523 of 2017 and APO No. 210 of 2018, respectively. The Division Bench, held that the Kolkata Municipal Corporation may initiate acquisition proceedings for the property under Section 536 or 537 of Kolkata Municipal Corporation Act, 1980, within five months (however these Sections 536 and 537 require several conditions including payment of expenses by agreement on such terms and at such rates or prices), or in the alternative, restore the name of the last recorded owner as the owner of the Property (‘Order’).
  • Dissatisfied with the aforesaid decision, an Appeal was filed by Kolkata Municipal Corporation before the Supreme Court of India against the Order.

WHAT THE COURT HELD

In Kolkata Municipal Corporation & Anr. Versus Bimal Kumar Shah & Ors. bearing Civil Appeal No. 6466 of 2024., the Supreme Court of India vide Judgement dated 16th May 2024 passed by Justice Sri. Narasimha (‘Judgement’) set aside the Order and laid down seven rights during acquisition of property under Article 300A of the Constitution of India. Following are the seven rights which are foundational components of a law and in tune with Article 300A (Right to Property):

  1. Right to Notice: duty of the State to inform the person that it intends to acquire his property.
  2. Right to be heard: the duty of the State to hear objections to the acquisition.
  3. Right to a reasoned decision: the duty of the State to inform the person of its decision to acquire.
  4. Duty to acquire only for public purpose: the duty of the State to demonstrate that the acquisition is for public purpose.
  5. Right of Restitution or Fair compensation: the duty of the State to restitute and rehabilitate.
  6. Right to an efficient and expeditious process: the duty of the State to conduct the process of acquisition efficiently and within prescribed timelines of the proceedings.
  7. Right of conclusion: final conclusion of the proceedings leading to vesting.

The Judgement stated that “these seven sub-rights may be procedures, but they do constitute the real content of the right to property under Article 300A, non- compliance of these will amount to violation of the right, being without the authority of law…”The judgment further established how the rights have been, incorporated in the Land Acquisition Act, 1894 and the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act of 2013.

In view of above, the Supreme Court of India concluded that merely having the right to acquire the property and fair compensation is not enough. It is important to follow the seven duties before acquiring any property. Thus, the Supreme Court declared that the exercise of the power by Kolkata Municipal Corporation was illegal, illegitimate and while dismissing the plea, levied a cost of Rs. 5,00,000.

The detailed judgement can be accessed here.

 

Disclaimer: This newsletter is for general information only and not intended for any solicitation. Views expressed in this newsletter are as on date and not necessarily of V Law Partners (“VLaw”). While reasonable efforts have been taken to provide correct information, VLaw cannot and does not warrant or guarantee the accuracy of the information provided in the newsletter. Readers are advised not to rely solely on this information when making any decision.

Suggestions: If you do not wish to receive our newsletters or have any comments or suggestions for us, please write to us at – admin@vlawpartners.com