Firms allotted land have no locus standi on relief hike: SC

Tribune News Service

New Delhi, February 21

The Supreme Court on Tuesday ruled that a company allotted land after acquisition by the government has no locus standi to be heard for determination of compensation for the landowners.

The verdict has implications for hundreds of companies allotted land after acquisition from farmers by the government. Mostly, such allotments are subject to any future court order for enhancement of compensation to the landowners.

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The order came on a petition by hundreds of landowners from Gurugram whose land was acquired by the Haryana State Industrial Development Corporation (HSIDC) — now HSIIDC — and was allotted to Maruti Suzuki India Limited (MSIL) and some other companies between 2002 and 2006.

Advocate Jasbir Singh Malik, who represented many of the landowners, said: “It’s a landmark verdict which will have far-reaching consequences — both for farmers and companies.” In fact, huge chunks of land were acquired by the State of Haryana in different phases for the public purpose of setting up Industrial Model Township by the HSIDC in Gurugram in five phases.

A substantial part of the acquired land (602 acres) was allotted by the HSIDC to MSIL. One of the clauses in the Conveyance Deed executed in favour of the allottee provided that if compensation was enhanced, the allottee i.e. MSIL shall be liable to pay additional price on that basis.

The Punjab and Haryana High Court had allowed the MSIL to be impleaded as a necessary party during hearing for determination of compensation amount, forcing the landowners to move the top court against the order. MSIL had contended that it would put an extra burden of Rs 900 crore on the company on account of enhancement of compensation. Allowing the landowners’ appeal, the Supreme Court reversed the High Court’s order. “Till the award (for acquisition of land) is made, no person other than State comes into the picture. Once the land vests in the State, the acquisition is complete. Any transferee from the State is not concerned with the process of acquisition,” a Bench headed by Justice AK Goel said.

“The State may transfer the land by public auction or by allotment at any price with which the person whose land is acquired has no concern. The mere fact that the government chooses to determine the allotment price with reference to compensation price determined by the court does not provide any locus to an allottee to contest the claim for enhancement of compensation,” the SC said.

Accordingly, the top court held that the post-acquisition allottee had no locus to be heard in the matter and was neither a necessary nor a proper party.