Land Acquisition Can't Be Challenged After Accepting Compensation: Supreme Court Rejects Company's Plea To Restore Singur Land

The Supreme Court has overturned the Calcutta High Court's decision to restore land to a private company based on the 2016 Kedar Nath Yadav v State of West Bengal precedent. The Court stated that its 2016 ruling, which quashed the Tata Nano plant acquisition in Singur, provided a targeted remedy for farmers and was not a general right for commercial entities that had accepted the acquisition for a decade.

A bench of Justices Surya Kant and Joymalya Bagchi while allowing the State of West Bengal's appeal, held that the High Court erred in granting land restoration to the respondent-private entity, which had accepted the acquisition and full compensation but challenged it belatedly.

“Once the proceedings conclude in the award and possession is taken without challenge, the Court would not entertain any belated grievance from the interested person.”, the court said.

In 2006, West Bengal acquired over 1000 acres in Singur for Tata Motors' Nano project, including 28 bighas of Respondent-Santi Ceramics' factory land. The company's objections under Section 5-A of the Land Acquisition Act, 1894 were rejected, after which it accepted ₹14.55 crore compensation and did not challenge the acquisition. Farmers, however, pursued a PIL, and in 2016 the Supreme Court in Kedar Nath Yadav quashed the acquisition, citing mechanical rejection of objections and disproportionate harm to poor cultivators, and ordered land restored to “original landowners/cultivators.” Only then did Santi Ceramics seek restoration on parity grounds, which the Calcutta High Court allowed, leading to the State's appeal before the Supreme Court.

Setting aside the High Court's decision, the judgment authored by Justice Kant observed:

“Permitting industrial entities to claim restoration benefits from litigation they chose not to pursue would establish an undesirable precedent. Such an approach would incentivize strategic inaction, encouraging parties to remain dormant during protracted litigation only to emerge as claimants after favourable outcomes are secured by others. This would undermine both the targeted nature of remedial relief and the fundamental principle that legal benefits flow from active pursuit of remedies, not passive opportunism.”

The Court noted that the earlier quashing of the Tata Nano land acquisition was a targeted relief for cultivators whose objections were mechanically dismissed and who bore a disproportionate burden as “poor agricultural workers” dependent on fertile land, and not the business entities like the Respondent that had acquiesced to the acquisition for a decade.

The Court added that the quashing of the land acquisition was in personam covering the parties who were individually affected by the acquisition proceedings, therefore the Respondent cannot claim the benefit of the judgment in which it was not the party.

“Where the Court quashes acquisition on grounds personal to individual objectors—such as vitiated consideration of their specific objections under Section 5-A—the relief operates in personam and benefits only those parties who contested the matter before judicial forums.”, the court said.

The Court found that since the Respondent has not challenged the acquisition contending that inquiry under Section 5-A being vitiated, therefore the benefit of the judgment can't be belatedly claimed by it.

“To further simplify, claimants who do not file objections or pursue judicial challenge cannot contend that Section 5-A inquiry is vitiated, nor can they seek quashing of Section 6 declaration on that ground….Despite possessing financial resources and institutional access, it never pursued the appellate remedies available under the 1894 Act. It accepted the entire compensation amount of INR 14,54,75,744 without protest and remained passive while cultivators pursued litigation for years. Having chosen not to contest the acquisition through available statutory mechanisms, Respondent No.1 now seeks the same relief that was granted to disadvantaged communities through PIL—a classic free-rider problem that judicial remedies cannot encourage.”, the court observed.

Accordingly, the appeal was allowed.

Cause Title: The State of West Bengal and Others versus M/S Santi Ceramics Pvt. Limited and Another

Citation : 2025 LiveLaw (SC) 1000

Click here to read/download the judgment

Appearance:

For Petitioner(s) :Mr. Harin P. Raval, Sr. Adv. Mr. Ashok Kumar Panda, Sr. Adv. Mr. Raja Chatterjee, Adv. Mr. Chanchal Kumar Ganguli, AOR

For Respondent(s) :Mr. Sridhar Potaraju, Sr. Adv. Ms. Tatini Basu, AOR Mr. Sankha Subhra Ray, Adv. Mr. Kumar Shashank, Adv.