The Bombay high court (HC) on Monday held that railway bodies which want to acquire land, cannot insist that landowners shall remove encroachments and hand them over vacant possession, before compensation is paid for the land acquired under the Railways Act, 1989.
“From a minute and careful examination of the two provisions [Sections 20-H and 20-I of the Railways Act], what is discernible is that payment of compensation to the person(s) entitled, is not dependent upon handing over of possession of the land,” said the bench of justice Ujjal Bhuyan and justice NR Borkar.
The bench said there was no negative covenant in the law that empowered the acquiring bodies to insist on encroachment-free possession of the land and withhold compensation on those grounds.
HC said the legal provisions made it clear that before taking over possession of the land, the Central government has to deposit compensation with the competent authority, and as soon as the deposit is made, the competent authority shall make the payment to the person(s) entitled. However, a period of sixty days is prescribed for surrendering or delivering possession of the land.
“This is clearly indicative of the fact that payment of compensation is not contingent upon handing over possession,” the bench said.
The court was hearing a petition filed by Premier Limited, seeking a direction to Dedicated Freight Corridor Corporation of India Limited (DFCCIL), a subsidiary of Indian Railways, to release the compensation amount of ₹21.71 crore for 28,672sqm of the petitioner company’s land at Bhopar in Thane district. The piece of land has been acquired by DFCCIL for the Western Dedicated Freight Corridor, a special railway project with a route length of 1483km, from Jawaharlal Nehru Port Trust (JNPT) to Dadri in Haryana.
Premier Ltd complained that though the final award was passed as regards the piece of land on May 6, 2017, and the land was transferred in revenue records to DFCCIL, compensation was not paid to it on the grounds that it failed to clear encroachments on the land. The company contended that nowhere in the law was such a condition stipulated, and it was legally unsustainable.
DFCCIL, on the other hand, maintained that the land was well-protected until the publication of the first notification for its acquisition, but thereafter, the petitioner company permitted encroachments. “This is out of mala fide desire of the petitioner to extract more money as compensation from the second respondent, being hand in glove with the encroachers,” said the lawyer for the railway subsidiary. “Since the land has been acquired for a public purpose, the petitioner ought to clear the encroachments first, and handover possession of the vacant land, free from all encumbrances,” the lawyer added.
HC, however, refused to accept the argument. The bench said in the backdrop of the legal position, the stand taken by DFCCIL was not justified. “Calling upon the petitioner to evict encroachers and to hand over vacant possession of the land, as a condition precedent to payment of compensation, is legally unsustainable,” said the bench.
The court has now directed the sub-divisional officer at Kalyan, through whom the land was acquired, to pay the compensation amount to Premier Limited in six weeks, along with interest at the rate of 6℅ per annum.
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