Land Acquired Can be Got Returned – If Not Used for the Purpose of Acquisition, Under 2013 Acquisition Act

Saji Koduvath, Advocate, Kottayam.

Land Acquisition Act 2013, Section 101 Speaks as under:

  • Return of unutilised land. When any land acquired under this Act remains unutilised for a period of five years from the date of taking over the possession, the same shall be returned to the original owner or owners or their legal heirs, as the case may be, or to the Land Bank of the appropriate Government by reversion in the manner as may be prescribed by the appropriate Government.
  • Explanation.–For the purpose of this section, Land Bank means a governmental entity that focuses on the conversion of Government owned vacant, abandoned, unutilised acquired lands and tax-delinquent properties into productive use.

State Amendments

Andhra Pradesh

  • In the principal Act, in section 101, for the words a period of five years, the words a period specified for setting up of any project or for five years, whichever is later, shall be substituted.


After section 101 of the principal Act, the following section shall be inserted, namely:-

  • “101A. Power to denotify land.- When any public purpose, for which the land acquired under the Land Acquisition Act, 1894 (Central Act 1 of 1894) becomes unviable or non-essential, the State Government shall be at liberty to denotify such land, on such terms, as considered expedient by the State Government, including the payment of compensation on account of damages, if any, sustained by the land owner due to such acquisition:
  • Provided that where a part of the acquired land has been utilized or any encumbrances have been created, the landowner may be compensated by providing alternative land alongwith payment of damages, if any, as determined by the State Government.”

Land Acquisition Act, 1894

Following decisions under the old Act, Land Acquisition Act of 1894 make it clear – ‘Acquired Land Vests in State, and It cannot be Divested’, even if it is not used for the purpose for which it was acquired, or used for any other purpose.

Development Authority vs Manoharlal, AIR 2020 SC 1496
Once award has been passed on taking possession under Section 16 of the Act of 1894, the land vests in State. There is no divesting provided under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (for mere non-payment under Land Acquisition Act of 1894), as once possession has been taken there is no lapse under Section 24(2).
Note: (i). Under Section 24(2) of the 2013 Act, where an award under Sec. 11 of 1894 Act has been made five years or more prior to the commencement of 2013 Act but the physical possession of the land has not been taken or the compensation has not been paid, the said proceedings ‘shall be deemed to have lapsed’.
(ii). It is held in this decision that the word or should be read as “and” (as conjunctive not disjunctive) so as to limit the lapsing only in cases where both, payment has not been made and possession has not been taken.
Cases Referred to:
Fruit & Veg. Merts Union Vs. Delhi Improvt. Trust, AIR 1957 SC 344
Lt Governor of HP Vs. Avinash Sharma, (1970) 2 SCC 149
Nasiruddin Ramai Vs. State Trpt Ap. Tribunal, 1975-2 SCC 671
Gulam Mustafa Vs. State of Maharashtra, 1976-1 SCC 800
R S Nayak Vs. A R Antulay, 1984-2 SCC 183
Suresh Chand Vs. Gulam Chisti, 1990-1 SCC 593
Satendra Prasad Jain Vs. State of UP, 1993-4 SCC 369
P. Chinnanna v. State of AP, (1994) 5 SCC 486
Awadh Bihari Yadav Vs. State of Bihar, 1995-6 SCC 31
State of Tamil Nadu Vs. Mahalakshmi Ammal, 1996-7 SCC 269
Pratap Chanda Sheo Narain Vs. St. of Rajasthan, (1996) 3 SCC 1
State of Punjab Vs. Sadhu Ram, 1996 7 JT 118
Chandragauda Ramgonda Vs. State of Mahtra, 1996-6 SCC 405
Star Wire India Ltd Vs. State of Haryana, 1996-11 SCC 698,
C Padma Vs. Dty Secretary Govt of T N, 1997-2 SCC 627
State of Kerala Vs. M Bhaskaran Pillai, 1997-5 SCC 432
Padmasundara Rao Dead Vs. State of TN, 2002-3 SCC 533
Northern Indian Glass Indts Vs. Jaswant Singh, 2003-1 SCC 335
Gov of A P Vs. Syed Akbar, 2005-1 SCC 558
Sita Ram Bhandar Society Vs. Lt Govr Delhi, 2009-10 SCC 501
Sulochana Chandrakant Vs. Pune Munipl Trapt, 2010-8 SCC 467
V Chandrasekaran  Vs. Administrative Officer, 2012-12 SCC 133
Jagannath Temple Mg Comte Vs. Siddha Math, 2015-16 SCC 542
Jagannath Temple Vs. Siddha Math, (2015) 16 SCC 542,
Workmen of Dimakuchi Tea Estate Vs. Mangt., 1958 SCR 1156 (the court to consider the objects and reasons of the legislature, which the legislature had in mind.)
Comsr. of Sales Tax v. Modi Sugar Mills, 1961 (2) SCR 189  (The legal fiction of lapsing cannot be extended beyond its legitimate field)
Braithwaite & Co. v. E.S.I.C, 1968 (1) SCR 771
V. Chandrasekaran vs. Administrative Officer,   (2012) 12 SCC 133,  It is a settled legal proposition, that once the land is vested in the State, free from all encumbrances, it cannot be divested and proceedings under the Act would not lapse, even if an award is not made within the statutorily stipulated period. Cases Referred to:
Awadh Bihari Yadav v. State of Bihar, (1995) 6 SCC 31
U.P. Jal Nigam v. Kalra Properties, AIR 1996 SC 1170  
Allahabad Devt. Authty. v. Nasiruzzaman,  (1996) 6 SCC 424,  
M. Ramalinga Thevar v. State of TN, (2000) 4 SCC 322
Govt of AP v. Syed Akbar, AIR 2005 SC 492.
Lt. Governor of HP. v. Shri Avinash Sharma, 1970-2 SCC 149,
Satendra Prasad Jain v. State of U.P. AIR 1993 SC 2517
Rajasthan Housing Board v. Shri Kishan,  1993-2 SCC 84.
Sulochana Chandrakant Galande v. Pune Municipal Transport, 2010-8 SCC 467  Once the land is acquired, it vests in the State free from all encumbrances. It is not the concern of the land owner how his land is used and whether the land is being used for the purpose for which it was acquired or for any other purpose. He becomes persona non grata once the land vests in the State. He has a right to get compensation only for the same. The person interested cannot claim the right of restoration of land on any ground, whatsoever. Change of user is concerned, it is a settled legal proposition that once land vests in the State free from all encumbrances, there cannot be any rider on the power of the State Government to change user of the land in the manner it chooses. If by virtue of a valid acquisition of land, land stands vested in the State, thereafter, claimants are not entitled to restoration of possession on the grounds that either the original public purpose is ceased to be in operation or the land could not be used for any other purposes. Cases referred to:
C. Padma. Vs. Dty. Sectry. Govt. TN (1997) 2 SCC 627,
Bhagat Singh Vs. State of UP, AIR 1999 SC 436;
Niladri Narayan Vs. State of WB, AIR 2002 SC 2532;
Northern Indian Glass Vs. Jaswant Singh, (2003) 1 SCC 335,
Satendra Prasad Jain Vs. State of UP, AIR 1993 SC 2517,
Awadh Bihari Yadav Vs. State of Bihar (1995) 6 SCC 31;
U.P. Jal Nigam Vs. Kalra Properties AIR 1996 SC 1170;
Chandragauda Vs. State of Maharashtra, (1996) 6 SCC 405; Allahabad Develt Authty Vs. Nasiruzzaman (1996) 6 SCC 424;
State of Kerala  Vs. M. Bhaskaran Pillai AIR 1997 SC 2703;
M. Ramalinga Thevar Vs. State of TN (2000) 4 SCC 322;
Printers (Mysore) Ltd. Vs. M.A. Rasheed, (2004) 4 SCC 460;
Bangalore Devt Autty Vs. R. Hanumaiah, (2005) 12 SCC 508;
Government of AP Vs. Syed Akbar, AIR 2005 SC 492.
Tamil Nadu Housing Board v. L. Chandrasekaran, (2010) 2 SCC 786, On Section 48-B (TN Amendment)Utilised substantial portion. If remaining land not needed for the purpose for which it was acquired, or for any other public purpose; or, if the acquired land has already been transferred to other agency, the Government cannot exercise power under Section 48-B. Government cannot be compelled to reconvey to the original owner. The question of transfer of the land to the original land owner under Section 48-B will arise only in case the Government is satisfied that the land is not required for the purpose for which it was acquired.
Tamil Nadu Housing Board v. Keeravani Ammal, (2007) 9 SCC 255.Sec. 48-B introduced into the Land Acquisition Act in the State of Tamil Nadu is an exception to the general rule that the land on acquisition become the property of the State and it could be used by the Government for any other public purpose –  also be sold by public auction. Sec.48-B must requires a strict construction.
Northern Indian Glass Industries Vs. Jaswant Singh. (2003) 1 SCC 335.  After land vests in State under Section 16 of the Land Acquisition Act, following taking of possession by Collector, owner has no right to seek to revest the land in himself even if the land is not used for the purpose for which acquired. Therefore, when once the land of the appellant vests with the authorities, they have no right to seek to revest the land in himself and they cannot seek for restitution of possession, that too when the land is very much needed for the expansion of the bus depot by the respondents.
Government of Andhra Pradesh v. Syed Akbar, AIR 2005 SC 492Once the land has vested in the State, it cannot be Divested. Acquired land having vested in the State and the compensation having been paid to the claimant, he was not entitled to restitution of possession.
State of Kerala v. M. Bhaskaran Pillai (1997) 5 SCC 432. “It is settled law that if the land is acquired for a public purpose, after the public purpose was achieved, the rest of the land could be used for any other public purpose. In case there is no other public purpose for which the land is needed, then instead of disposal by way of sale to the erstwhile owner, the land should be put to public auction.
C. Padma vs. Deputy Secretary to the Govt. of TN (1997) 2 SCC 627Acquired land having vested in the State and compensation paid to the claimant, the claimants, thereafter, are not entitled to restitution of possession on ground that either original public purpose had ceased to be in operation or the land could not be used for any other purpose. “In terms of the agreement as contemplated in Chapter VII of the Act, the company had delivered possession subject to the terms and conditions thereunder. It is seen that one of the conditions was that on cessation of the public purpose, the lands acquired would be surrendered to the Government.”
Gulam Mustafa v. State of Maharashtra, AIR 1977 SC 448.Once the original acquisition is valid and title has vested in the Municipality, how it uses the excess land is no concern of the original owner.
The Fruit & Vegetable Merchants Union v. The Delhi Improvement Trust, AIR 1957 SC 344In the cases contemplated by Ss. 16 and 17 the property acquired becomes the property of Government without any conditions or limitations either as to title or possession. The legislature has made it clear that the vesting of the property is not for any limited purpose or limited duration.

Apex Court Ordered to Give-Back Land

Our Apex Court ordered to give back the properties acquired, in Uddar Gagan Properties Limited vs. Sant Singh, (2016) 11 SCC 378 and Royal Orchid Hotels Limited vs. G. Jayarama Reddy, (2011) 10 SCC 608 to its prior owners on the ground that the proceedings were vitiated by fraud and there was colourable exercise of power.

Uddar Gagan Properties Ltd. case

Uddar Gagan Properties Ltd., entered into collusive agreements with some of the farmers/owners whilst the acquisition proceedings were under way. Pointing out that the acquisition in that case was not completed and the title did not vest in the State, the Apex Court held that the entire administrative action could be held to be vitiated by fraud and there was colourable exercise of power.

Royal Orchid Hotels Limited

In the case of Royal Orchid Hotels Limited the Apex Court found the entire exercise was fraudulent and colourable exercise of power. In the facts of the case the Apex Court found that fraud unravels everything and upon diversion of the public purpose, the acquisition proceedings were liable to be quashed; and the land was ordered to be returned to the original land owners in spite of their having earlier accepted the compensation.

Mr. Felton Fernandes Vs. Union of India

The aforesaid two decisions of the Apex Court were distinguished by the  Bombay High Court, in Mr. Felton Fernandes Vs. Union of India, 2018(5) ALL MR 886, related to the land acquisition for Chhatrapati Shivaji International Airport (formerly known as Sahar International Airport) at Bombay.

The petitioners argued before the High Court that though the land was acquired for public purpose, it was diverted from the public purpose and utilised for a private and purely commercial user. According to them it was a fraudulent action and called for quashing of the acquisition. They further contended, relying on Uddar Gagan Properties Limited vs. Sant Singh and Royal Orchid Hotels Limited vs. G. Jayarama Reddy that this land was no longer to be used for a public purpose, and therefore it must be reverted to the original owners. But, the High Court held that even when a land acquired by State was utilised by the State for private commercial purpose, there is no provision in law, which enabled the prior owner of the land to reclaim same. The court pointed out that the operator of airport had been given permission for exploiting the land forming part of project for ancillary uses; and that such user could not be termed as fraudulent so as to vitiate original acquisition of land. And that once land vested in State under Sec.7, the State could not be divested of its title for non-user of land for purpose for which it was acquired, and therefore the acquisition notification could not be quashed. The High Court relied on Gulam Mustafa vs. State of Maharashtra, (1976) 1 SCC 800: AIR 1977 SC 448, which held as under:

  • “5. At this stage Shri Deshpande complained that actually the municipal committee had sold away the excess land marking them out into separate plots for a housing colony. Apart from the fact that a housing colony is a public necessity, once the original acquisition is valid and title has vested in the municipality, how it uses the excess land is no concern of the original owner and cannot be the basis for invalidating the acquisition. There is no principle of law by which a valid compulsory acquisition stands voided because long after the requiring authority diverts it to a public purpose other than the once stated in the Section 9(3) declaration.”

The Bombay High Court noticed that it was inconceivable that when the original acquisition was made in 1953 under Sec. 7 of the Act, there was any plan for diversion of use of the land for any private purpose, and it could not be termed as fraudulent.

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  1. Adv Anjum Rukadikar says:

    There is a provision in land acquisition act that if the land acquired is not used for a specified period. Then it has to be returned to its original owner and also the person cannot be made landless by acquiring all of his land. Is there a case law wherein the government has returned the land to it’s original owner.


    1. sajikoduvath says:

      Thanks for your kind comment. I made changes in the post on your valuable information.


  2. Naseem Deshmukh says:

    Land acquired under which act… Old act or new act is to be seen..


    1. sajikoduvath says:

      Thanks for your kind comment. I made changes in the post on your valuable information.


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