The Supreme Court Stated That Mechanical Application Of The Doctrine Of Merger Could Lead To Unjust And Irreversible Consequences: Govt. Of Nct Of Delhi & Anr V. M/s Bsk Realtors Llp & Anr

Case title:

Govt. of NCT of Delhi & Anr v. M/S BSK Realtors LLP & Anr

Date of Order:

17.05.2024

Bench:

Hon’ble Mr. Justice Surya Kant

Hon’ble Mr. Justice Dipankar Datta

Hon’ble Mr. Justice Ujjal Bhuyan

Parties:

Appellant: Govt. of NCT of Delhi & Anr

Respondent: M/S BSK Realtors LLP & Anr

SUBJECT:

The Hon’ble Supreme Court of India (hereinafter referred to as the ‘Supreme Court’ or ‘the Court’) dealt with disputes arising out of land acquisitions and the rights of the landowners and the State under the Land Acquisition statues. In order to expedite the adjudication process, the Court categorized the cases into different groups, and tailored specific remedies for each of them. The Court further extended the timeline for fresh acquisition proceedings and exempted certain procedural requirements. The Court invoked its powers under Article 142 to ensure the public interests are safeguarded whilst justice is served to all parties involved. 

IMPORTANT PROVISIONS:

The Constitution of India, 1950: 

• Article 142

The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (2013 Act):

• Section 24: says that in case of a pending land acquisition proceeding, where a compensation award has not been passed under the 1894 Act, then the landowners would be entitled to compensation prescribed under the 2013 Act.
• Section 11
• Section 13
• Section 14
• Section 16
• Section 20
• Section 15
• Section 25
• Section 28

The Land Acquisition Act, 1894 (1894 Act):

• Section 4(1)
• Section 6
• Section 5

The Code of Civil Procedure, 1908 (CPC):

• Order VI Rule 2
• Order VI Rule 4

The Delhi Lands (Restrictions on Transfers) Act, 1972 (1972 Act):

• Section 3

OVERVIEW:

• The govt. of NCT of Delhi (GNCTD) initiated land acquisition proceedings under the Land Acquisition Act 1894 to acquire lands owned by M/SBSL Realtors LLP (Respondents) for public infrastructure. 
• The enactment of Right to to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, (2013 Act) in 2013, replacing the 1894 Act, brought about several procedural enhancements and changes in compensation provisions for landowners.
• The Respondents challenged the land acquisition by filing a writ petition in the Delhi High Court (HC) seeking compensation. 
• Referring to the Supreme Court’s judgment in Pune Municipal Corporation v. Harakchand Misrimal Solanki, the HC the acquisition of land will be deemed to have lapsed if compensation was not paid, ruling in favour of the respondents. 
• GNCTD has challenged the HC’s order in the instant case.

ISSUES RAISED:

• Whether the dismissal of a civil appeal preferred by one appellant in the first round operates as res judicata against the other appellant in the second round before us?
• Whether suppression of the first round of litigation by the appellants constitutes a material fact, thereby inviting an outright dismissal of the appeals at the threshold?
• Whether the doctrine of merger operate as a bar to entertain the civil appeals in the present case?
• Whether the previous determination of the rights of subsequent purchasers in an inter se dispute precludes the same issue from being reconsidered between the same parties?

ARGUMENTS ADVANCED BY THE APPELLANT:

• The land acquisition proceedings were lawful and in public interest, essential for urban development. 
• HC’s interpretation of Section 24 of the 2013 Act was erroneous. Appellant(s) referred to the Apex court’s judgment in the case of Indore Development Authority v. Manoharlal & Ors, wherein the conditions for lapse of land acquisitions were clarified and the judgment in the Pune Municipal Corporation case (supra) was overruled. 
• In re of Indore Development Authority it was held that a land acquisition to lapse, both conditions- non-payment of compensation and failure to take physical possession- must coexist. 
• Several essential public infrastructure projects would be delayed due to technicalities if the lapse was allowed, causing substantial damage to public welfare. 
• The Pune Municipal Corporation case (supra) cannot serve as res judicata against present appeals, especially given that the instant appeal had greater public interest implications. 
• The application of the doctrine of merger would also be erroneous if the specific circumstances were not considered, leading to inconsistent and unjust outcomes. 
• The appellants insisted that the Supreme Court invoke Article 142 to ensure that the appeal is adjudicated based on its merits.   

ARGUMENTS ADVANCED BY THE RESPONDENT(S):

• Citing the Pune Municipal Corporation case (supra), it was argued that the principle of res judicata be applied as the circumstances of the case are similar to the instant case. 
• The appellants had failed to initiate fresh acquisition proceedings in the year-long time period that was granted to them. The appellants cannot challenge the impugned order after the expiry of the time frame. 
• The doctrine of merger is applicable in the instant appeal. As the higher court had already made its decision, it should merge with the lower court’s decision, to ensure consistency and stability in the judicial process. 
• Crucial evidence was deliberately withheld by the appellants during previous rounds of litigation to gain undue advantage which warrants the dismissal of the appeal.
• Applying new interpretations to legal provisions retrospectively would cause unjust repercussions to landowners who had relied on the previous law. 
• A fresh acquisition under the 2013 Act would result in disruption of settled expectations of landowners, creating uncertainty. 
• In the interest of upholding justice and fairness, the instant appeal should be dismissed and landowners must be granted compensation without any further delays.  

JUDGEMENT ANALYSIS:

• Reiterating the extraordinary powers of the Supreme Court vested by it under Article 142 of the Constitution, the Court stated that the powers allow it to do complete justice between the parties.
• The said powers enable the Court to address unique and complex legal issues comprehensively and serve as an exception to the doctrine of merger.
• The Court acknowledged that the Pune Municipal Corporation case was overturned by the Indore Development Authority case (supra). The latter judgment held that land acquisitions would only lapse when both compensations had not been paid and physical possession had been taken. 
• While the principle of res judicata were recognized, it was also observed that the principle is not applicable when the circumstances of the case involve larger matters of public interests. 
• Reliance was placed on the case of State of Gujarat v. M.P. Shah Charitable Trust, wherein it was held that the principle of res judicata was only applicable if there was a direct and substantial dispute between the same parties, that had been already resolved. In the instant case, GNCTD and DDA were not in dispute in the previous rounds of litigation, either directly or substantially. 
• It was held that mechanical application of the doctrine of merger could lead to unjust and irreversible consequences.  
• The Supreme Court relied on the case of S.J.S Business Enterprises Pvt Ltd v. State of Bihar, where the Court had held that a fact must be material enough to influence the merits of the case. Since it found no deliberate suppression of material facts, it therefore refused to dismiss the case on this basis. 
• To make the adjudication process smooth, the Court classified the appeals into 8 different groups which required different legal considerations and remedies, based on their specific circumstances. 
• The various decisions were as follows: 

1. Group A & B1: Fresh acquisition proceedings u/s 24(2) of the 2013 Act were initiated by the Court.
2. Group B2: Upon application of the principle laid down in the case of Indore Development Authority (supra), the appeals were deemed infructuous. 
3. Group C2 and C3: The acquisition of the land under the 1894 Act was upheld by the Court as the twin conditions u’s 24(2) were not met.
4. Group E: The cases were remitted to the High Court for the purposes of fact-finding inquiry to ascertain compensation.
5. Group D1: A separate listing was scheduled in July 2024 for further adjudication.  

CONCLUSION:

Using its extraordinary powers under Article 142, the Supreme Court meticulously balanced legal principles and public interest, addressing the complex land acquisition disputes by categorizing the cases and providing tailored remedies. The Court reiterated the flexible application of the principles of res judicata and the doctrine of merger to ensure justice for all parties involved when larger public interests are in hand. The judgment aims to balance the interests of landowners, the State, the public, ensuring justice and legal consistency.