HSIIDC’s Manesar land-acquisition appeals dismissed; Punjab and Haryana HC upholds enhanced compensation but denies interest before physical possession

The appeals arose from land acquisition proceedings for establishing IMT Manesar in villages Kukrola and Fazalwas, District Gurugram. Notifications under Sections 4 and 6 of the Land Acquisition Act, 1894 (“1894 Act”) were issued on 25 April 2008 and 22 April 2009 respectively.

The Land Acquisition Collector passed an award dated 21 April 2011, assessing compensation at ₹48,00,000 per acre for the acquired land and ₹57,60,000 per acre for land abutting NH-8 up to a depth of two acres.

Owing to an interim status quo order passed in proceedings initially instituted before the Supreme Court and later transferred to the High Court, physical possession was not taken and compensation was not paid during the period from 25 April 2011 to 2 December 2019.

After the writ proceedings were disposed of on 2 December 2019, possession-taking and payment of compensation commenced. The landowners received compensation on 11 December 2020 and filed applications under Section 18 on 22 December 2020.

The Reference Court held the references maintainable and enhanced compensation. HSIIDC challenged the references as time-barred, while the landowners sought further enhancement and interest under Section 28.

1. Whether the applications for reference under Section 18 of the 1894 Act were barred by limitation when they were filed several years after the Collector’s award but without prior service of notice under Section 12(2)?

2. Whether the landowners had actual or constructive knowledge of the Collector’s award through the Section 9 notices, the connected writ proceedings, or other circumstances sufficient to commence limitation under Section 18(2)?

3. Whether the landowners were entitled to compensation at the enhanced rates applicable to land within five acres of NH-8 and to the revised rate for the remaining land?

4. Whether interest under Section 28 on the enhanced compensation was payable for the period from the Collector’s award until actual physical possession, particularly from 21 April 2011 to 2 December 2019?

The Court applied Section 18(2) of the 1894 Act, under which an application for reference must be made within the prescribed period, but held that the limitation period runs from actual or constructive knowledge of the award where the claimant was not present when it was made.

Relying on Mohd. Hasnuddin v. State of Maharashtra , (1979) 2 SCC 572, the Court held that compliance with the limitation requirement is a condition precedent to a valid reference.

Under Harish Chandra Raj Singh v. Land Acquisition Officer , 1961 SCC OnLine SC 140, the “date of the award” means the date on which the award is communicated or becomes known, actually or constructively, to the affected person; mere making or filing of the award is insufficient.

Under Bhagwan Das v. State of U.P. , (2010) 3 SCC 545, the Collector bears the burden of proving actual or constructive knowledge once the claimant asserts absence of notice and knowledge; receipt of compensation, attestation of possession proceedings, or conduct acknowledging the award may establish such knowledge.

Section 28A was also considered as a statutory mechanism for re-determination of compensation for similarly situated landowners.

For interest, Sections 28 and 34 of the 1894 Act were distinguished: Section 34 interest is mandatory, whereas Section 28 interest on enhanced compensation is discretionary but must be exercised judicially, as held in Maj. Gen. Kapil Mehra v. Union of India , 2015 (2) RCR (Civil) 4.

The Court further relied on Balwant Narayan Bhagde v. M.D. Bhagwat , (1976) 1 SCC 700, for the principle that “possession” means actual physical possession and not symbolic possession.

The Court held that the Section 9 notices could not be treated as notice of the award because they preceded the Collector’s award under Section 11.

HSIIDC and the State conceded that no notices under Section 12(2) had been issued.

The landowners were not parties to, nor represented by counsel in, the writ proceedings relied upon by HSIIDC; the acquisition process remained effectively suspended by the status quo order, the landowners remained in possession, and neither compensation nor possession was transferred until after 2 December 2019.

Consequently, HSIIDC failed to prove actual or constructive knowledge of the award before the landowners received compensation on 11 December 2020. Their applications filed on 22 December 2020 were therefore within limitation when reckoned from the date of knowledge.

The Court also considered that the references were consistent with the object of Section 28A, namely, securing equal compensation for landowners covered by the same notification.

On quantum, HSIIDC conceded that the rates determined by the Supreme Court in Krishan Kumar v. State of Haryana , 2025 SCC OnLine SC 1043, would apply if the limitation objection failed.

However, the claim for Section 28 interest from 21 April 2011 was rejected because the landowners themselves established that actual possession remained with them until 2 December 2019.

Since Section 28 interest is linked to the date of actual possession, no interest on enhanced compensation could accrue during the period in which the State had not taken possession.

The landowners’ appeals were allowed to the extent that compensation was fixed at ₹1,21,00,000 per acre for land situated within five acres of NH-8 and ₹62,14,121 per acre for the remaining land.

The landowners were denied interest under Section 28 for the period from 21 April 2011 to 2 December 2019, but were granted the statutory benefits under the 1894 Act and interest on the enhanced compensation from 2 December 2019, or from the actual date of possession where possession was taken later.

Their claims for interest in RFAs Nos. 729, 845 and 847 of 2025 were likewise rejected for the period during which possession remained with them.