RIICO vs Subhash Sindhi Cooperative Housing Society Jaipur

Bench: B.S. Chauhan and V. Gopala Gowda.

The Apex Court pronounced a significant judgment on 12th February 2013 that shall set a strong precedent in relation to land acquired under Land Acquisition Act. The Rajasthan Government notified on 18.7.1979 under Section 4 of the Rajasthan Land Acquisition Act, 1953 to take over the land including the land in dispute for the public purpose of “industrial development”. This land was taken in possession by the government in 1982 and given to RIICO in 1983 who in turn gave the disputed land to Diamond and Gem Development Company in 1989.

This disputed land was transferred by the Khatedars (owners of the land) through an agreement of sale to the Respondent Society for the construction of residential premises on 21.7.1981. Meanwhile, the State Government issued circulars including circular dated 1.3.1982 providing exemption of land from any acquisition proceedings. This exemption was granted for those lands that had constructions on them or was sold after the issuance of the Notification with the cut-off date as 20.8.1981.

The Respondent Society along with the Khatedars challenged the land acquisition proceedings in High Court in 1989 but the petition was dismissed on the ground of laches and delay and against this judgment; respondents filed SLP to the Supreme Court. The Apex courts upheld the judgment of the High court and dismissed the petition with an observation that the dismissal of the SLP would not operate as res-judicata if the society approaches the court for the release of the land on the ground that land owned by similar institutions have been released from acquisition. The respondents filed second writ petition in the Jodhpur Bench of the High Court praying for the release of the disputed land on the basis of this observation of the apex court. The Appellants contested the claim and submitted that respondents had no locus standi to challenge the acquisition proceedings that have attained finality up to this Court but the Jodhpur bench held in favour of the Respondents and directed the appellants to release the disputed land. The High Court observed in the order that other land that were acquired were released to other societies and the government itself acquiesced the same and the state government or RIICO cannot contest the relief granted to the society and the society were entitled to the same on the principles of parity and equity. RIICO brought the present appeal against this decision of the High Court.

The Supreme Court after hearing the submissions of the Counsels of both parties and relying on various judicial decisions observed various principles of law and held in favour of RIICO or Appellants and allowed the appeal and set aside the order of the High Court.

The apex court observed that it is settled position of law that Acquisition proceedings cannot be challenged at the belated stage and hence the decision of the High Court in first writ petition was correct. The Court further observed that transfer of property subsequent to the issuance of the notification was void that meant that it was non-existent from its inception. The court observed further that the respondent society had entered the agreement of sale fully knowing the legal consequences of the same and thereby held that the first writ petition was not filed in good faith.

The apex court observed that respondents did not provide any factual foundation to indicate discrimination meted out to them in comparison to other societies. The Court also held that respondents never made an application for the release of the disputed land before any competent authority and only pressed that grave injustice was done with respect to other societies.

The Apex Court held further that High court entertained the writ petition without comparing the actual facts of the respondent society in comparison to other societies. The Apex Court said that High court did not record any finding in respect of comparing cases and in fact took on the role of the statuary authority and pass the orders.

The Apex Court enunciated the following principles of laws on the basis of which it decided the dispute. The court observed that the primary purpose of writs is to enforce and protect legal right and can only granted in case of existence of enforceable right and corresponding duty. The court observed further that unless there is clear demand of enforcing legal right and refusal to enforce the same, writs cannot be issued. The Court also observed that courts should direct the statutory authorities to decide on the matter within a stipulated time with a reasoned order and should not take on their role and pass orders.

The apex court also elaborated the scope of doctrine of discrimination inscribed in Article 14 of the Constitution. The court observed that this article shall apply only on existence of a legal right and in case, discrimination is meted out to equals when the facts do not warrant. The court observed further that court cannot enforce negative equality on the ground that some others have benefited from illegal grants and thereby cannot perpetuate illegality.

The court also observed that the circulars that were issued for exemption of land from acquisition were inconsistent with the statutory law and policy and held that the respondents cannot rely upon them. The Court observed that circular revealed that land that were to be de-acquired were required to be notified by the government. The Apex Court observed that notification under section 48 of the Land Acquisition Act, 1894 or abandonment of acquisition proceedings by the state can only take place prior to the taking in possession of land. The court held that respondents were therefore not entitled to the disputed land as the land was already vested in the state and the circulars are inconsistent with the statutory law.

The court also observed that this entire land acquisition was done for the public purpose of the industrial development and hence the respondent demand of the disputed land be given for construction of residential premises cannot be held justified. The Court observed that the state government cannot be made to do something beyond its power as no corporate body can be bound by estoppel to do something beyond its power or refrain from doing what is its duty to do.

Thus, the Apex Court relying on all these enunciated principles of law held in favor of the appellants and allowed the appeal and set aside the High court’s order wherein the Appellants were directed to release the disputed land in favor of the Respondent Society.