Visakhapatnam Urban Development Authority v. S.S. Naidu & Ors.
Background
In 1978, land belonging to the respondent landowners in Visakhapatnam was notified for acquisition to widen a road, and possession was taken from them in 1982 after compensation was deposited in court. Over the following three decades, the government repeatedly flip-flopped, issuing orders to withdraw the acquisition and then cancelling those withdrawal orders, leading to three separate rounds of litigation, with the Andhra Pradesh High Court ultimately quashing the acquisition and ordering the land returned to the owners.
Decision Breakdown
The Supreme Court held that once possession of land is taken, Section 48(1) of the Land Acquisition Act, 1894 does not permit the government to withdraw from the acquisition: that power exists only for land whose possession has not yet been taken. Since possession here was admittedly taken in 1982 before any withdrawal attempt, all subsequent withdrawal orders were legally invalid, and the courts' repeated sympathetic directions asking the government to "reconsider" the landowners' pleas were themselves not legally sound. The Court therefore quashed the High Court's judgment that had ordered return of the land, allowed the appeals, and held that the related contempt petition no longer survived once the main appeal succeeded.
Lesson Learnt
Once the government takes physical possession of acquired land and pays compensation, it loses the legal power to simply "withdraw" the acquisition later: any such withdrawal order, however well-intentioned, is void in law.