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New Okhla Industrial Development Authority (NOIDA) vs. Yunus & Ors.

Civil Appeal · 2022 INSC 142Decided 3 Feb 2022
Civil Appeal No. 901 of 2022
K.M. Joseph · Pamidighantam Sri Narasimha · Hrishikesh Roy as a co-member of the bench

Background

Land belonging to the respondents was acquired in 1983 for NOIDA's industrial development, with compensation fixed by the Land Acquisition Officer in 1984 at roughly Rs. 20 per square yard. The respondents had not sought enhancement themselves, but a separate reference filed by another landowner (Fateh Mohammed) was referred to a Lok Adalat, which in 2016 recorded a compromise fixing compensation at Rs. 297.50 per square yard (matching a rate the High Court had separately awarded in an unrelated case, Mangu Ram). The respondents then invoked Section 28A of the Land Acquisition Act, which allows other landowners under the same acquisition notification to claim the same higher compensation once it is fixed by "the Court", relying on the Lok Adalat's 2016 award. The Additional District Magistrate rejected this, but the Allahabad High Court sided with the respondents, holding a Lok Adalat award qualifies as a Court's award/decree for this purpose.

Decision Breakdown

The Supreme Court reversed the High Court, holding that an award passed by a Lok Adalat under Section 20 of the Legal Services Authorities Act, 1987 is fundamentally a recorded compromise between parties, not an adjudication by "the Court" as defined and contemplated under the Land Acquisition Act. While such an award is deemed to be a "decree" for the limited purpose of making it enforceable/executable, that legal fiction cannot be stretched to make it the kind of judicial determination of compensation that Section 28A requires as the trigger for other landowners to claim parity. The Court expressed concern that allowing this would open the door to collusive or "unholy" compromises being used to inflate compensation claims across an entire acquisition. It approved the contrary High Court rulings (Bombay and Karnataka) that had already taken this view, and held that the Lok Adalat's 2016 award in this case could not be the basis for the respondents' Section 28A applications, setting aside the High Court's judgments.

Lesson Learnt

A settlement recorded by a Lok Adalat, while binding and enforceable between the parties who agreed to it, is not the same as a judicial determination of compensation by a court, so other landowners cannot piggyback on a Lok Adalat compromise to claim the same enhanced compensation under the land acquisition law's "same-rate" provision.

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

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