The Supreme Court has directed that landowners whose agricultural land was acquired under the same notification must receive compensation at the enhanced rate of ₹6,50,000 per acre, even though their claims had travelled through a delayed litigation process. 

At the same time, the Justice S.V.N. Bhatti and Justice N.V. Anjaria denied interest on the enhanced compensation for an aggregate period of 4,427 days, taking into account the substantial delay attributable to the appellants.

The department issued a notification under Section 4(1) of the Land Acquisition Act, 1894, on February 11, 1999, proposing to acquire 7 Acres 12 Guntas of land for the purpose of accommodating families displaced under a project.

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Following the acquisition proceedings, the Land Acquisition Officer passed an award on January 4, 2000. Dissatisfied with the compensation determined, the landowners sought a reference under Section 18(1) of the Land Acquisition Act before the Additional Civil Judge (Senior Division), Jamkhandi.

The Reference Court subsequently enhanced the compensation to ₹3,00,000 per acre by its judgment dated March 27, 2001.

The appellants thereafter approached the Karnataka High Court through MFA No. 20936 of 2008.

On June 23, 2011, the High Court enhanced the compensation further to ₹5,00,000 per acre.

However, the appellants contended that they were entitled to the same compensation that had subsequently been granted in other proceedings concerning lands acquired under the same February 11, 1999 notification.

In another proceeding, compensation for land covered by the same notification had been determined at ₹6,50,000 per acre, following an earlier enhancement judgment of the Karnataka High Court dated December 12, 2012.

The Supreme Court had subsequently approved the ₹6,50,000-per-acre compensation in Ravindra and another v. Special Land Acquisition Officer, UKP, Bagalkot, reported as (2017) 11 SCC 495.

The central grievance before the Supreme Court was therefore one of parity in compensation.

The appellants argued that because their lands were acquired under the very same notification, they should not receive a lower rate of compensation than landowners whose lands were covered by the same acquisition proceedings and who had already secured compensation at ₹6,50,000 per acre.

They had also approached the Karnataka High Court by filing Review Petition No. 100113 of 2014. However, the review petition was dismissed on September 7, 2015. The appellants consequently approached the Supreme Court seeking parity with the compensation granted in Ravindra.

The respondents did not dispute the factual chronology but opposed the appellants’ claim on the ground of their lack of diligence in pursuing the enhancement proceedings.

The respondents highlighted two substantial periods of delay.

The first was calculated from March 28, 2001, immediately after the Reference Court enhanced compensation to ₹3,00,000 per acre, until the filing of the MFA before the Karnataka High Court in 2008. This period was stated to be 2,383 days.

The second period ran from June 24, 2011, after disposal of the MFA by the High Court, until the refiling of the Special Leave Petitions before the Supreme Court on January 27, 2017. This period was calculated at 2,044 days.

According to the respondents, the appellants’ prolonged delay disentitled them from receiving interest on the enhanced compensation for the corresponding periods.

The Supreme Court acknowledged that the delay in the matter was “abnormal.”

Nevertheless, the Court took into account the peculiar circumstances of the case, particularly the fact that the appellants were agriculturists whose agricultural land had been acquired under the subject notification.

The Court noted that, under the very same notification, compensation had already been fixed at ₹6,50,000 per acre with statutory benefits.

In these circumstances, the Bench invoked its powers under Article 142 of the Constitution and extended the compensation determined by the Supreme Court in Ravindra to the appellants as well.

Accordingly, the appellants were held entitled to compensation at the rate of ₹6,50,000 per acre, together with statutory benefits.

While granting parity in the principal compensation, the Supreme Court drew a clear distinction regarding interest.

The Court held that the appellants would not be entitled to interest for the periods during which they had substantially delayed pursuing their remedies.

The first excluded period ran from March 28, 2001 to the filing of the MFA before the Karnataka High Court in 2008.

The second excluded period ran from June 24, 2011 to January 27, 2017, when the Special Leave Petitions were refiled before the Supreme Court.

Together, these periods amounted to 4,427 days.

Thus, while the Supreme Court ensured that the appellants received the same substantive compensation rate applicable to other landowners under the same notification, it declined to allow them to benefit from their own prolonged delay through the accrual of interest.

The Court was confronted with a situation where different proceedings concerning lands acquired under the same notification had resulted in different compensation rates. While the appellants’ own proceedings had reached a rate of ₹5,00,000 per acre, another set of proceedings concerning the same notification had resulted in compensation of ₹6,50,000 per acre, which had also received approval from the Supreme Court.

Rather than allowing the appellants to remain at the lower rate solely because of the procedural history of their case, the Supreme Court exercised its constitutional power under Article 142 to extend the higher compensation rate.

At the same time, the Court preserved the consequence of the appellants’ delay by excluding the corresponding periods from the computation of interest.

The ruling effectively provides substantive parity without rewarding procedural delay.

The appellants receive the enhanced principal compensation of ₹6,50,000 per acre because their land was acquired under the same notification as the land considered in Ravindra. However, the Court denied interest for the lengthy periods during which the appellants failed to diligently pursue their claim.

This approach allowed the Court to reconcile two competing considerations: ensuring comparable landowners receive comparable compensation while preventing prolonged litigation delays from generating an unintended financial benefit.

The Supreme Court ultimately allowed the Civil Appeals in the terms indicated in the judgment.

The appellants were entitled to compensation of ₹6,50,000 per acre with statutory benefits, consistent with the compensation approved in Ravindra for lands covered by the same acquisition notification. However, interest was expressly denied for the aggregate 4,427-day period of delay identified by the Court.

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