Supreme Court Half Yearly Digest 2025: Land Law

Although the land acquisition compensation is to be determined at the market rate prevailing on the date of issuance of the notification regarding the acquisition of land, the compensation can be determined based on a later date in exceptional circumstances when the delay in the disbursal of the compensation has been inordinate. Bernard Francis Joseph Vaz v. Government of Karnataka, 2025 LiveLaw (SC) 2 : 2025 INSC 3 : AIR 2025 SC (CIVIL) 1081 : (2025) 7 SCC 580

Cancellation of Land Allotment – Validity of Legal Notice - The Supreme Court dismissed the Trust's appeal, affirming that UPSIDC's cancellation of the allotment complied with procedural requirements under Clause 3.04(vii) of the UPSIDC Manual. The appellant argued that only the notice dated 13.11.2006 qualified as a "legal notice," claiming three consecutive notices were required. However, the Court held that prior communications dated 14.12.2004 and 14.12.2005 also met the criteria for valid legal notices, as they clearly outlined the default, breach, intent to take legal action, and consequences, despite not being explicitly labeled as such. A valid legal notice requires clear facts, notice of breach, intent to hold the recipient liable, and compliance with statutory provisions, without suppressing material information. No prejudice was caused to the appellant, and the High Court's decision was upheld. (Paras 22 - 24) Kamla Nehru Memorial Trust v. U.P. State Industrial Development Corporation Ltd., 2025 LiveLaw (SC) 652 : AIR 2025 SC (CIVIL) 2248 : 2025 INSC 791

Constitution of India - Articles 142 and 300-A – Compensation – Delay in Determination and Disbursal – Held, the appellants were deprived of their legitimate compensation for over 22 years due to the inaction and lethargy of the State and Karnataka Industrial Areas Development Board (KIADB). The delay violated the appellants' constitutional right under Article 300-A, which guarantees the right to property, mandating adequate and timely compensation for deprivation of property. The Court found that despite the statutory framework requiring prompt disbursal, the compensation was determined only in 2019 after contempt proceedings were initiated, using the market value from 2011 as the base. It was held that awarding compensation at the 2003 market value would result in gross injustice and render Article 300-A meaningless. In exercise of its powers under Article 142, the Supreme Court directed the Special Land Acquisition Officer (SLAO) to determine compensation based on the market value as of April 22, 2019, along with statutory benefits under the 1894 Land Acquisition Act. Additionally, the judgment and orders of the High Court's Division Bench were set aside, and the appellants' writ petition was allowed. The Court clarified that the inter se dispute between the State, KIADB, and Respondents 6 and 7 regarding the delay in compensation payment must be resolved as per the agreements between them, without affecting the appellants' entitlement. Respondents 6 and 7 were granted liberty to pursue remedies in law if aggrieved. Appeals allowed; fresh award to be determined within two months based on the 2019 market value; statutory benefits to be provided. Bernard Francis Joseph Vaz v. Government of Karnataka, 2025 LiveLaw (SC) 2 : 2025 INSC 3 : AIR 2025 SC (CIVIL) 1081 : (2025) 7 SCC 580

Conveyance - A lessee seeking conveyance of property must fulfill all statutory and contractual obligations, including payment of costs, to enforce such a claim. Municipal Corporation of Greater Mumbai v. Century Textiles and Industries Ltd; 2025 LiveLaw (SC) 34 : 2025 INSC 36 : AIR 2025 SC 731

Conveyance - Obligation to Convey - Whether the Municipal Corporation of Greater Mumbai (MCGM) was obligated to convey the leasehold property (Block-A) to Century Textiles and Industries Limited (Respondent No. 1) upon the expiration of the 28-year lease under the Bombay Improvement Trust Transfer Act, 1925. Century Textiles applied in 1918 under the City of Bombay Improvement Act, 1898, for a scheme to construct dwellings for poorer classes. The scheme was approved, and Century Textiles constructed 476 dwellings and 10 shops by 1925, less than the originally planned 980 dwellings and 20 shops. In 1927, Century Textiles requested an alteration to the scheme, which was approved by the Board, and a 28-year lease for Block-A was granted in 1928, expiring in 1955. After the lease expired, Century Textiles continued in possession of Block-A without any demand for conveyance until 2006, when it issued a legal notice. No suit was filed, and in 2016, Century Textiles filed a writ petition seeking conveyance of Block-A. The High Court allowed the writ petition, directing MCGM to execute the conveyance. MCGM appealed to the Supreme Court. Held, neither the lease deed nor the Board Resolution of 1927 obligated MCGM to convey Block-A to Century Textiles upon the expiration of the lease. The lease deed did not contain any clause mandating conveyance, and the Board Resolution did not approve the conveyance of Block-A. Section 51(2) of the 1925 Act, which provides for conveyance upon the expiration of the lease, must be read harmoniously with Section 48(a), which requires the lessee to leave the premises in good condition. The conveyance under Section 51(2) is contingent upon the lessee fulfilling its obligations, including payment of costs, which Century Textiles failed to do. Municipal Corporation of Greater Mumbai v. Century Textiles and Industries Ltd; 2025 LiveLaw (SC) 34 : 2025 INSC 36 : AIR 2025 SC 731

Delay in filing an appeal against a land acquisition compensation award does not justify denying landowners just, fair, and reasonable compensation. The Court allowed the appeal filed after a 4908-day (13.5-year) delay, overturning the High Court's dismissal for refusing to condone the delay. Emphasizing Article 300A of the Constitution, which guarantees the right to property and mandates fair compensation for land acquired under eminent domain, the Court reiterated a liberal approach to condoning delays in land acquisition cases, especially considering factors like poverty and illiteracy of land losers. However, no interest on compensation is payable for the delayed period. The case was remanded to the High Court for fresh consideration, excluding the issue of delay, with no interest awarded for the condoned delay period. [Paras 11 & 13] Suresh Kumar v. State of Haryana, 2025 LiveLaw (SC) 473 : 2025 INSC 550

Determination of Market Value - The determination of the prevalent market value of the acquired land is not an algebraic formula and that cannot be determined in a precise or an accurate manner. Some amount of guess work is always permissible. Therefore, a judge has to sit in an arm chair and without much taxing his mind has to determine the market value in a prudent manner. (Para 13) Manilal Shamalbhai Patel v. Officer On Special Duty, 2025 LiveLaw (SC) 354 : 2025 INSC 393

Enhancement of Compensation - Supreme Court enhanced compensation for acquired agricultural land from Rs. 30 per sq. mt. to Rs. 95 per sq. mt., based on GIDC's allotment of nearby commercial plot at Rs. 180 per sq. mt. in 1988 - Adjusted for 5% price rise over one year to Rs. 190 per sq. mt., followed by 50% deduction (40% for development costs, 10% for larger area). (Para 14) Manilal Shamalbhai Patel v. Officer On Special Duty, 2025 LiveLaw (SC) 354 : 2025 INSC 393

Environment & Forest Laws – Indian Forest Act, 1927, Section 29 – Forest Conservation Act, 1980, Sections 2, 3A, 3B – Zudpi Jungle/Forest in Maharashtra – Protected Forests – Sustainable Development – Encroachments – Afforestation – Non-Forestry Use – Compensatory Afforestation – Special Task Force – State Accountability – The Supreme Court, following the T.N. Godavarman judgment (1996), declared Zudpi Jungle lands in Maharashtra as forest lands under the Forest Conservation Act, 1980, requiring Central Government approval for any non-forestry use under Section 2. Pre-December 12, 1996, allotments of Zudpi Jungle lands may be regularized without compensatory afforestation or Net Present Value (NPV) payments, subject to State approval under Section 2. Post-December 12, 1996, allotments require Central Government approval, strict compliance with forest laws, and punitive action against officers for illegal allotments under Sections 3A and 3B. Pre-1980 encroachments may be regularized if legally permissible; post-1980 commercial encroachments must be cleared within two years by a district-level Special Task Force. Approximately 7.76 lakh hectares of unallotted Zudpi Jungle lands to be transferred to the Forest Department within one year for afforestation. Unallotted fragmented parcels (<3 hectares, not adjoining forest areas) to be declared Protected Forests under Section 29 of the Indian Forest Act, 1927. Sub-Divisional Magistrates to prevent future encroachments, with accountability for violations. Non-forestry use proposals require FC Act compliance and cannot be diverted to non-governmental entities. Zudpi Jungle lands may be used for compensatory afforestation only if non-forest land is unavailable, certified by the Chief Secretary, with double the area afforested per MoEF&CC guidelines. The Central Empowered Committee (CEC) to monitor land transfer and compliance. State Governments/Union Territories to investigate and recover forest lands allotted to private entities or recover afforestation costs if retention serves public interest. (Para 138) In Re: Zudpi Jungle Lands, 2025 LiveLaw (SC) 609 : 2025 INSC 754

Income from Fruit-Bearing Trees – Compensation for trees requires documentary proof of income, not mere presence. (Para 15) Manilal Shamalbhai Patel v. Officer On Special Duty, 2025 LiveLaw (SC) 354 : 2025 INSC 393

Issue of non-payment of compensation to land owners whose land was acquired for the construction of a water tank. The Court expressed strong disapproval of the conduct of the State authorities, who had failed to pay the compensation despite a final award in favor of the land owners. The Court directed to ensure the release of the compensation amount, along with interest and punitive costs. The Court also mandated an explanation from the Collector and warned of contempt proceedings if the payment was not made by the stipulated date. The Special Leave Petition was disposed of with these directions, and the Court clarified that its observations were not against any individual officer. Kondiram Manikrao Nimbalkar v. State of Maharashtra, 2025 LiveLaw (SC) 54

Land Acquisition Act, 1894; Section 48 - Land acquired by the government through its sovereign power of eminent domain for public purposes cannot be transferred back to the original owner by the beneficiary of the acquisition through private agreements. (Para 16) Delhi Agricultural Marketing Board v. Bhagwan Devi, 2025 LiveLaw (SC) 327 : 2025 INSC 367 : AIR 2025 SC 1750

Land Acquisition Act, 1894 - Highest bona fide sale exemplar must be considered when determining land acquisition compensation to ensure a fair market value for the acquired land. While determining the compensation, crucial factors such as the close proximity of the acquired land to the developed zone and non-agricultural utility should also be kept into consideration. (Para 19 & 31) Ram Kishan v. State of Haryana, 2025 LiveLaw (SC) 388 : 2025 INSC 441

Land Acquisition Act, 1894 - Principle of de-escalation - the Supreme Court allowed the landowner's plea seeking enhancement of compensation fixed by the High Court and enhanced the compensation from ₹55.71 lakh to ₹1.18 crore per acre for lands acquired in Dharuhera village (Haryana) in 2008 under the Act, 1894 by applying the principle of de-escalation. The Court set aside the High Court's decision to selectively rely on lower-value exemplars while ignoring comparable higher-value transactions. The High Court committed an error by ignoring evidence of proximity and potential for non-agricultural use since the acquired land was in a controlled urban area surrounded by various Multinational Companies and had a big residential colony opposite to it with multiple schools and townships within 1KM range. (Para 34 - 38) Ram Kishan v. State of Haryana, 2025 LiveLaw (SC) 388 : 2025 INSC 441

Land Grabbing (Prohibition) Act, 1982 (Andhra Pradesh) – "Land Grabbing" - Definition of – Unauthorized Possession – Peaceful Occupation - mens rea - Whether peaceful, non-violent unauthorized possession of land constitutes "land grabbing" under the Andhra Pradesh Land Grabbing (Prohibition) Act. Held, violence or criminality is not a prerequisite for an act to qualify as "land grabbing" under the Act. Peaceful, unauthorized occupation of land without legal right falls within the ambit of "land grabbing" as per the Act. Mens rea required is the intention to illegally possess land through unlawful or arbitrary means, including for unauthorized use, construction, or creation of third-party rights. The appellant, who occupied land (Survey No. 9) without legal title despite believing he purchased an adjacent plot (Survey No. 10), was declared a "land grabber" under the Act. The appeal was dismissed, affirming the High Court's decision. [Para 7] V.S.R. Mohan Rao v. K.S.R. Murthy, 2025 LiveLaw (SC) 619 : 2025 INSC 708

Large areas do not attract the same price as is offered for the small plots of lands. Therefore, some amount of deduction is also normally permissible on account of largeness in area. Thus, deduction of at least 10% has to be applied to determine the rate of compensation. (Para 12) Manilal Shamalbhai Patel v. Officer On Special Duty, 2025 LiveLaw (SC) 354 : 2025 INSC 393

Lease and Allotment - Difference Between - Explained - Lease is a temporary grant whereas allotment though is a temporary right of use and occupation of evacuee but does not include a grant by way of a lease. Dalip Ram v. State of Punjab, 2025 LiveLaw (SC) 13 : 2025 INSC 12 : AIR 2025 SC 898

Principles of Escalation and De-Escalation - The principle of escalation signifies adjusting the base value of land upwards to account for appreciation in market value over time. The principle is used when the reference sale deed or award is from an earlier period than the acquisition date. Whereas, the principle of de-escalation signifies adjusting the base value downward to account for time gaps when the reference point is from a later period, but the land was acquired earlier. (Para 25 - 28) Ram Kishan v. State of Haryana, 2025 LiveLaw (SC) 388 : 2025 INSC 441

Public Trust Doctrine – Transparent Allocation of Public Resources – Industrial Land Allotment – Systemic Flaws in UPSIDC Process - The Supreme Court upheld the cancellation of a 125-acre industrial land allotment to Kamla Nehru Memorial Trust by the Uttar Pradesh State Industrial Development Corporation (UPSIDC) due to payment defaults, as confirmed by the Allahabad High Court in 2017. The Court criticized UPSIDC for systemic flaws in allotting the land in 2003 within two months without competitive bidding, violating the Public Trust Doctrine. This doctrine mandates transparent, fair, and publicly beneficial allocation of state resources, requiring consideration of economic benefits, environmental sustainability, and regional development. The Court noted that UPSIDC's non-transparent process deprived the public exchequer of revenue and undermined the State's fiduciary duty to citizens. It directed Uttar Pradesh and UPSIDC to ensure future allotments are transparent, non-discriminatory, and aligned with public interest, industrial development, and environmental goals, with the subject land to be re-allotted strictly per these principles. (Paras 29 - 38) Kamla Nehru Memorial Trust v. U.P. State Industrial Development Corporation Ltd., 2025 LiveLaw (SC) 652 : AIR 2025 SC (CIVIL) 2248 : 2025 INSC 791

Regional and Town Planning Act, 1966 (Maharashtra) - Section 49 and 127 - Reservation of land under development plan - Lapse due to failure to acquire within timelines – Held, Reservation for public purpose lapses if land not acquired within 10 years of plan finalisation or 12 months of purchase notice; timelines sacrosanct and mandatory; indefinite restraint on owner's use impermissible; lapse operates for all intents, freeing land for permissible development even for bona fide purchasers. In 1993, portion of appellants' 2.47-hectare plot reserved for private school in sanctioned development plan; no acquisition till 2006. Original owners served purchase notice u/s 49 MRTP Act, confirmed 02-01-2007; no proceedings initiated within one year. Land sold to appellants in 2015. Writ petition seeking lapse declaration dismissed by High Court with liberty to pursue remedies; appeal to Supreme Court. The Supreme Court allows appeal, declares reservation lapsed on 02-01-2008 u/s 49(7). Even absent statutory aid, 33-year delay warrants lapse u/Art. 142 for complete justice. [Para 38, 50, 52] Nirmiti Developers v. State of Maharashtra, 2025 LiveLaw (SC) 248 : 2025 INSC 265 : AIR 2025 SC 1495

Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013; Section 11 - Under the RFCTLARR Act, 2013, the market value of acquired land must be determined based on the date of the Section 11 notification, as mandated by the proviso to Section 26(1). Overturning the High Court's decision to fix the valuation date as January 1, 2014 (the Act's enforcement date), the Court emphasized that the legislative intent is to ensure fair compensation reflecting the current market value at the time of acquisition. The use of "shall" in the proviso makes the Section 11 notification date mandatory for valuation, and courts lack discretion to select an alternative date. (Paras 9 - 11) Sumitraben Singabhai Gamit v. State of Gujarat, 2025 LiveLaw (SC) 448 : 2025 INSC 521

Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013; Section 26 - Determination of Market Value - Theory of Deduction - Circle Rates - Held, theory of deduction applied under the Land Acquisition Act, 1894 to adjust market value for development costs, is not mandatory under the Acquisition Act, 2013. Section 26(1) mandates compensation based on the highest of: (a) market value under the Indian Stamp Act, 1899; (b) average sale price of similar land; or (c) consented amount. Explanation 4 allows the Collector discretion to adjust this value if it does not reflect actual market value, potentially applying deduction, but requires recorded reasons. Absent such adjustment, circle rates fixed under the Stamp Act govern. Public authorities must adhere to State-fixed circle rates, which citizens pay as stamp duty. Appeals dismissed emphasizing scientific fixation of circle rates for equitable compensation and governance. (Para 37 - 43) Madhya Pradesh Road Development Corporation v. Vincent Daniel, 2025 LiveLaw (SC) 364 : 2025 INSC 408 : AIR 2025 SC 1825 : (2025) 7 SCC 798