Supreme Court Grants Compensation for Land Utilized Without Acquisition Proceedings - Dismisses Appeal on Limitation Ground

In a significant judgment, the Supreme Court of India has granted compensation to landowners whose land was utilized for the construction of a road without formal acquisition proceedings. The Court, while dismissing the appeal filed by the State of Himachal Pradesh on the ground of limitation, emphasized that the original writ petitioners are entitled to compensation for their land, considering the market price as of May 17, 1996. However, due to the significant delay of 20 years in filing the writ petition, the Court ruled that no interest would be granted to the landowners for the said period.

The bench comprising of Justice M.R. Shah and Justice C.T. Ravikumar observed that although the land was used with the consent of the original writ petitioners, there was no documented evidence of their agreement to forego compensation. The Court stated, "In absence of written consent to voluntarily give up their land, the landowners are entitled to compensation in terms of law." The judgment emphasized that the State cannot evade its legal responsibility to compensate individuals from whom private property has been expropriated.

Highlighting the deemed date of acquisition as May 17, 1996, the Court directed the State or the appropriate authority to calculate the compensation amount after allowing the landowners an opportunity to present evidence regarding the market price on that day. The Court mandated the State to make the payment within two months from the date of calculating the compensation amount, with the entire process to be completed within six months.

The judgment emphasized the significance of considering the circumstances while granting compensation, stating, "Doing complete justice between the parties, the original landowners may be awarded compensation considering the market price as on 17.05.1996, however with all other statutory benefits excluding the interest from 17.05.1996 till the writ petition was filed before the High Court."

Date of Decision: February 24, 2023

State of Himachal Pradesh & Ors.  VS Rajiv and Anr.