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Faizabad-Ayodhya Development Authority vs. Dr. Rajesh Kumar Pandey & Ors.

Civil Appeal · 2022 INSC 613Decided 20 May 2022
Civil Appeal No. 2915 of 2022
M.R. Shah · B.V. Nagarathna

Background

Several Development Authorities in Uttar Pradesh (Faizabad-Ayodhya and Moradabad) had acquired land decades earlier under the old Land Acquisition Act, 1894, but could not finalize the compensation award before the new 2013 Act came into force because landowners had obtained court stays on the acquisition. The Allahabad High Court ruled that since no award existed on the date the 2013 Act commenced, the landowners were entitled to the (generally higher) compensation calculated under the new 2013 Act. The Development Authorities appealed to the Supreme Court, arguing the landowners should not benefit from delays that the landowners themselves caused by obtaining the interim stays.

Decision Breakdown

The Supreme Court allowed the appeals and set aside the High Court's orders. It held that where no award was declared under the old 1894 Act only because a court had granted an interim stay at the landowners' own instance, the landowners cannot then claim the enhanced compensation available under the 2013 Act: that would let them profit from litigation they themselves initiated. Applying the principle of "restitution" (that no one should gain an unjust advantage because of court proceedings), the Court directed the Authorities to now declare the award and pay compensation strictly under the old 1894 Act, factoring in the intervening years. Landowners dissatisfied with the amount could still seek enhancement under the 1894 Act's own procedure.

Lesson Learnt

A person cannot use a court-obtained stay order as a shield to later claim a more favourable law was applicable simply because the stay delayed the government's action: the courts will not allow litigation delay to be converted into a financial windfall.

Official source (sci.gov.in)View Judgment (PDF)

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