Land Acquisition Act 1894: Title Of Land Owner Ceases Once State Takes Possession Of Land: Supreme Court

The Supreme Court reiterated that once possession is taken by the State, the land vests absolutely with the State and the title of the landowner ceases.

The bench comprising Justices allowed the appeal filed by Assam Industrial Development Corporation Limited against a Gauhati High Court judgment nullifying the award passed under  Land Acquisition Act, 1894. The award pertained to land acquisition notification issued with respect to a land belonging to Gillapukri Tea Company Ltd.

The court noted that, in this case, award amount was made available to the Deputy Commissioner and the awarded sum was duly paid to and received by the Land owner.

Once the award has been approved, compensation has been paid thereunder and possession of the land has been handed over to the Government, acquisition proceedings could not have been reopened, including by way of re-notification of the already acquired land under Section 4 of 12 the L.A. Act by the Government, the bench said. Allowing the appeal, it observed:

"The recent decision of the Constitution Bench of this Court in Indore Development Authority v. Manoharlal and Ors. has also affirmed that once possession is taken by the State, the land vests absolutely with the State and the title of the landowner ceases. We find no reason to deviate from this settled position of law and thus are unable to agree with the High Court's reliance on the letters dated 21.07.2012 and 06.01.2014 to nullify the original award and allow fresh acquisition proceedings in respect of the first respondent's land which had already been acquired and has been under the possession of the appellant since 11.06.2010."

In Para 256 of the Indore Development Authority judgment, the Constitution Bench had observed thus:

Thus, it is apparent that vesting is with possession and the statute has provided under Sections 16 and 17 of the Act of 1894 that once possession is taken, absolute vesting occurred. It is an indefeasible right and vesting is with possession thereafter. The vesting specified under section 16, takes place after various steps, such as, notification under section 4, declaration under section 6, notice under section 9, award under section 11 and then possession. The statutory provision of vesting of property absolutely free from all encumbrances has to be accorded full effect. Not only the possession vests in the State but all other encumbrances are also removed forthwith. The title of the landholder ceases and the state becomes the absolute owner and in possession of the property. Thereafter there is no control of the landowner over the property. He cannot have any animus to take the property and to control it. Even if he has retained the possession or otherwise trespassed upon it after possession has been taken by the State, he is a trespasser and such possession of trespasser enures for his benefit and on behalf of the owner.. After the land has vested in the State, the total control is of the State. Only the State has a right to deal with the same

CASE: ASSAM INDUSTRIAL DEVELOPMENT CORPORATION LTD.  vs GILLAPUKRI TEA COMPANY LIMITED

CORAM: Justices S. Abdul Nazeer and Sanjiv Khanna

CITATION:  LL 2021 SC 45

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