State cannot invoke Section 28-A limitation after unlawfully rejecting timely compensation references, Telangana High Court rules

The respondents’ residential houses and lands in Hathini Village were acquired for submergence under the P.P. Rao Project. Award No. B/628/2002 dated 26 May 2003 covered 532 structures and allegedly omitted statutory components such as solatium and additional market value.

The respondents applied under Section 18 of the Land Acquisition Act, 1894 (“the Act”) on 05 July 2003, within the prescribed period, but their applications were rejected on 01 August 2003 solely because they had accepted compensation without expressly recording protest.

Ten other awardees under the same award obtained a reference, and the Reference Court enhanced the compensation in L.A.O.P. No. 32 of 2011 by judgment dated 05 February 2018; the enhancement was affirmed in appeal on 20 January 2020.

The respondents subsequently sought re-determination under Section 28-A of the Act. Their applications were rejected on 14 July 2021 as having been filed beyond the prescribed three-month period.

In W.P. No. 16034 of 2023, the learned Single Judge directed re-determination of compensation on the basis of the enhancement granted in L.A.O.P. No. 32 of 2011. The State preferred the present intra-Court appeal.

1. Whether the respondents’ applications under Section 18 of the Act were rightly rejected on the ground that compensation had been received without protest?

2. Whether the writ petition was liable to be dismissed because the order dated 01 August 2003 was not specifically challenged?

3. Whether the respondents’ claim was barred by the three-month limitation prescribed under Section 28-A(1) of the Act?

4. Whether the writ petition was liable to be dismissed on the ground of delay and laches?

5. Whether the learned Single Judge’s direction for re-determination of compensation was sustainable, including the entitlement to solatium, additional market value and interest?

Section 18(1) of the Land Acquisition Act, 1894 permits a person who has not accepted the award to seek a reference to the civil court, while the second proviso to Section 31(2) bars a person who has received compensation otherwise than under protest from seeking such reference.

The Court applied the principle in Ajit Singh v. State of Punjab, followed in Kotipalli Chitti v. Special Deputy Collector and other authorities, that a timely written application under Section 18 itself demonstrates implied protest, even if no express protest was recorded when compensation was received.

Section 28-A(1) provides a re-determination remedy to persons who had not made an application under Section 18, and the decisions in Union of India v. Pradeep Kumari and State of A.P. v. Marri Venkaiah establish that an application under Section 28-A must ordinarily be made within three months from the date of the reference court’s award and that the period is mandatory.

The Court further relied on Union of India v. Hansoli Devi in interpreting the scope of the expression “had not made an application” under Section 28-A.

It also applied the principles that the State cannot take advantage of its own wrong, and that delay and laches are matters of judicial discretion rather than a rigid statutory limitation, particularly where continuing deprivation of lawful compensation is shown.

Under Sections 23(1-A), 23(2), 28 and 34 of the Act, additional market value, solatium and interest are statutory components consequential to the determination of compensation.

The Court held that the respondents had applied under Section 18 within six weeks of the award and that their applications clearly manifested dissatisfaction with the compensation; therefore, the absence of an express endorsement of protest in the acquittance register could not defeat their statutory right to a reference.

The State’s own counter-affidavit showed that ten similarly situated awardees under the same notification and award had been referred on the basis of written representations, making the differential treatment arbitrary and violative of Article 14.

The absence of a formal challenge to the 2003 rejection order was not fatal because the writ pleadings sufficiently raised its illegality, the State had contested the issue on merits, and Article 226 permits the Court to mould relief where the real controversy is apparent.

The Court distinguished the limitation applicable to an independent Section 28-A application from the respondents’ original and timely Section 18 claims, which had been unlawfully prevented from reaching the reference court.

It further found that the delay in approaching the writ court was explained by the respondents’ repeated representations, the later decision and finality of the co-awardees’ reference, and the lack of effective communication of the 2021 rejection order; no third-party rights had intervened.

Since the enhancement in L.A.O.P. No. 32 of 2011 concerned the same award and had attained finality, directing re-determination on that basis avoided unnecessary further litigation. The statutory additions of additional market value, solatium and interest were held to form part of the compensation payable.

The Court held that the rejection of the respondents’ Section 18 applications on the ground of absence of protest was unlawful; the claim was not defeated by the limitation under Section 28-A or by delay and laches.

The fourth appellant was directed to re-determine the compensation payable to the respondents for the acquired lands and structures by adopting the rates fixed in L.A.O.P. No. 32 of 2011, as affirmed in appeal.

The re-determined compensation was to include the additional amount under Section 23(1-A), solatium under Section 23(2), and interest under Sections 28 and 34, after deducting amounts already paid.

Payment was directed to be completed within three months from receipt of the judgment, with disbursement to the legal representatives of deceased respondents upon production of necessary particulars.

No order was made as to costs.