Land Acquisition Act 1894 -Section 17(4) Notification Liable To Be Quashed If State Fails To Show Exceptional Circumstances Justifying Urgency : Supreme Court

The Supreme Court has held that the urgency clause under Section 17(4) of the Land Acquisition Act 1894 can be invoked only in exceptional circumstances.

Section 17 of the Land Acquisition Act 1894 gives power to the land acquisition authorities to take immediate possession of the land before the proceedings related to award of compensation are over. As per Section 17(4), the authority can dispense with the requirement under Section 5A of hearing the objections of the land owners to the acquisition notification in case of urgent acquisition.

In the instant case Hamid Ali Khan v. State of Uttar Pradesh, the Supreme Court reiterated the following important principles :

1. The right to ventilate grievances against the acquisition under Section 5A is a valuable right, which cannot be extinguished without proper justifications.
   
2. Such right can be dispensed with under Section 17(4) only in exceptional circumstances.
3. The Court can quash the notification invoking urgency clause if the state fails to justify the urgency.
   

A bench comprising Justices KM Joseph and S Ravindra Bhat observed in the judgment :

"Section 5A of the Act guarantees a right to the person interested in the property which was the only statutory safeguard to stave off of a compulsory acquisition of his property. The power under Section 17 (4) is discretionary. Being a discretion it must be exercised with due care. It is true that if there is relevant material however meagre it may be and the authority has without being guided by extraneous considerations applied his mind and taken a decision, then the court would adopt a hands-off approach. In the ultimate analysis as with any other decision a balancing of conflicting interests is inevitable. The authorities must remain alive and alert to the precious right created in favour of the citizens which is not meant to be a mere empty ritual"

The judgment authored by Justice KM Joseph also held that the State must lay before the court the special facts which are within its exclusive knowledge on the basis of principle under Section 106 of the Evidence Act to justify the invocation of urgency clause.

"When a challenge is made to the invocation of power under Section 17(4) the writ applicant cannot succeed on bare and bald assertions. The facts which are specifically within the exclusive knowledge of the state must be laid before the court on the basis of the principle in Section 106 of the Evidence Act. Existence of the exceptional circumstances justifying invoking of Section 17(4) must be established in the wake of a challenge."

The Court reiterated that urgency clause is a discretionary power and that the dispensation of Section 5A hearing was an exception to the general principle.

"The power under Section 17(4) is discretionary. Being a discretion it must be exercised with due care. It is true that if there is relevant material however meagre it may be and the authority has without being guided by extraneous considerations applied his mind and taken a decision, then the court would adopt a hands-off approach...The authorities must remain alive and alert to the precious right created in favour of the citizens which is not meant to be a mere empty ritual."

"..on an appreciation of the evidence made available by all the parties it is open to the court to conclude that no occasion arose for resorting to the power under Section 17(4) which indeed must be read as an exception to the general rule that the acquisition of property is made after affording an opportunity the person adversely affected to demonstrate that the acquisition was unjustified."

In the instant case, the appellants were challenging the notifications issued under Section 4(1) read with 17(4) in 2009 for the acquisition of their plot for construction of residential colony. 

The Court, after noting the documents, observed "the file does not reveal any urgency at all associated with the need to acquire the land immediately which constitutes the foundation for invoking the urgency clause".

"We are at a loss as to what was the material which was relevant to a decision under section 17(4) of the Act", the Court exclaimed.

The Court also noted during the pendency of the case, the 1894 Act was repealed by the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. So, there was no question of an inquiry being held under Section 5A.

In this backdrop, the Court set aside the notifications and directed the return of the land to the appellants.

Case Title : Hamid Ali Khan v. State of Uttar Pradesh

Coram : Justice KM Joseph, Justice S Ravindra Bhat

Citation : LL 2021 SC 676

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