The Supreme Court has overturned a court’s order restricting the government from acquiring a part of private land for free in exchange for granting residential status to the rest of the area.
The Supreme Court on Thursday allowed the government to acquire a part of private land in Maharashtra for free in exchange for permission to grant “residential” status to the remaining area, overturning the Bombay High Court’s order restricting the Shirdi Nagar Panchayat from developing the acquired land for a public utility space. The panchayat had acquired it in exchange for permission to change the land's status to “residential”.
The court observed that it was acquired based on the Maharashtra government’s 2004 notification, which stated the conditions to convert the land status. It further highlighted that the landowners had not only accepted the conditions earlier but also entered into agreements with the municipal council to transfer the land to pave the way for building a public “amenity space”.
On August 18, 2004, the Maharashtra government issued a notification to change the land status, subject to the municipal council receiving a part of the land for free. The landowners agreed to the conditions and sought permission from the town planning authority, which subsequently was granted. They then converted the land into 65 plots and sold them to various people. The court held that these plot holders do not have a firm ground in the case.
“They had purchased the plot knowing very well that in the sanctioned layout, 10 per cent of the space was to be reserved as ‘open space’ and 10 per cent of the land was to be handed over to the municipal council as ‘amenity space’. They were very well aware that 10 per cent of the land would be transferred to the municipal council by the landowners free of cost and that the land would vest in the municipal council. Knowing this fully well, they entered into transactions with the landowners,” the court said.
Abhinay Sharma, managing partner at ASL Partners, explains that the government can acquire an individual’s property without entering into an agreement. The land acquisition authority is vested in both central and state governments. Historical constitutional conflicts over property rights led to its removal in 1951, paving the way for Article 31(A), prioritising public good over individual rights in land acquisition.
“Therefore, the state’s power to acquire land for public use has been ingrained in our laws from time immemorial, and such power has been cushioned over time through the enactment of new laws and enforcement through judicial decisions to support the enforcement of the government’s developmental goals. The recent case of Shirdi Nagar Panchayat v. Kishor Sharad Borawake & others is in this direction,” he says.
In this case, the landowners accepted the transfer condition in exchange for permission to change the nature of the use of the land. But can the government acquire it if there is no such clause?
“In view of the prevailing law, it is clear that the government can acquire an individual’s land for public utility purposes even in the absence of such a clause. However, acquisition of land free of cost, if upheld and enforced, would create disputes in the future for violating the right to fair compensation of landowners at the root level,” says Sharma.
“The said judgment has only been passed in the context of a specific agreement(s) wherein the party (landowner) has categorically agreed for such acquisition of land by the authority in return for certain benefits to be availed by the landowners. Therefore, the judgment cannot be read to state that the government has been given an unfettered power to acquire a person’s land. On the other hand, the acquisition of land by the government can only happen after following the due process of law stipulated under the central/state legislation,” says Ashutosh K. Srivastava, Counsel at SKV Law Offices.
While the government can acquire land, landowners can seek recourse under certain sections. In the same case, the court allowed the landowners to request authorities to take an alternative plot instead of the current portion of the land.