Supreme Court Upholds Landowner Rights, Orders Compensation at Current Market Value After 22-Year Delay

In a landmark judgment, the Supreme Court of India has ordered in favour of a group of landowners whose properties were acquired for the Bangalore-Mysuru Infrastructure Corridor Project way back in 2003. The Court ordered the Special Land Acquisition Officer to reassess the compensation with the market value that prevailed as of April 22, 2019, and pay it within two months along with all statutory benefits that are accruable.

The petitioners in the case, Bernard Francis Joseph Vaz And Others VS Government Of Karnataka And Others, had bought residential plots in Gottigere Village, Bengaluru, between 1995 and 1997. In 1997, the government of Karnataka signed a framework agreement with Nandi Infrastructure Corridor Enterprise Ltd. (NICE) for the BMICP.

As part of the project, the government was obligated to acquire and transfer over 20,000 acres of land to NICE.

A preliminary notification for land acquisition under the Karnataka Industrial Areas Development Act, 1966 (KIAD Act) was issued in 2003.

Objections were filed by the Appellants, and yet a final notification was issued, and the possession of their respective lands was taken over in 2005. However, no award was given for almost 18 years. At last, in 2019, after relentless efforts of both the landowners and the project proponents, the SLAO issued an award. The said award was done at the market value determined as of the year 2011 and not of the year 2003 during which the land was acquired.

This led the landowners and NICE to file separate writ petitions before the Karnataka High Court challenging the award on different grounds.

The Single Judge bench of the High Court ultimately quashed the SLAO's award, agreeing with NICE that the SLAO had wrongly shifted the date for determining market value.

The Court directed the SLAO to issue fresh awards but maintained that compensation should be based on the 2003 market value.

The landowners appealed this decision, arguing for the 2019 market value, but the Division Bench dismissed their appeal as premature since the SLAO had not yet issued fresh awards and this led the landowners to appeal to the Supreme Court.

The Supreme Court acknowledged the inordinate delay in awarding compensation to the landowners and emphasized the significance of the Right to Property, even after its removal as a Fundamental Right.

The Court highlighted that the right to property remains a constitutional right under Article 300A and a human right. No person can be deprived of their property without receiving adequate compensation as per the law. Criticizing the lethargic approach of the State and KIADB, the Court stated that the landowners should not suffer due to bureaucratic inaction.

The Court recognized that forcing the landowners to accept compensation based on the 2003 market value would be a grave injustice, given the significant inflation over the two decades.

It also noted that quashing the entire acquisition process at this stage would be detrimental to the project and would place a huge financial burden on the public exchequer due to the need for fresh acquisition under the 2013 Land Acquisition Act.

After taking all these factors into consideration the Supreme Court exercised its extraordinary powers under Article 142 of the Constitution to direct the SLAO to reassess the compensation using the market value as of April 22, 2019. This decision ensures that the landowners receive a fair and just compensation for their acquired land, accounting for the long delay and the erosion of the rupee's purchasing power over time.

Coram: Justice B.R. Gavai and Justice K.V. Viswanthan
Between: Bernard Francis Joseph Vaz And Others VS Government Of Karnataka And Others
DOJ: 02-01-2025