Supreme Court judgment concerning the Delhi Agricultural Marketing Board and a land acquisition dispute. The central issue revolves around the Board’s attempt to return a portion of compulsorily acquired land to the original owner, Bhagwan Devi, through a private agreement. The Court examines the validity of this agreement in light of the Land Acquisition Act, 1894, and the subsequent laws governing the Board. Ultimately, the Supreme Court overturned previous rulings and the arbitral award that validated the agreement, deeming it contrary to the fundamental policy of Indian law as land acquired through eminent domain cannot be reversed by a beneficiary through a private arrangement.
Land Acquisition Act, 1894, Section 4 , 6, 16 and 48 – Arbitration and Conciliation Act, 1996, Section 34 and 37 – Bombay Agricultural Produce Markets Act, 1939, Section 16 – Delhi Agricultural Produce Marketing (Regulation) Act, 1976 – Delhi Agricultural Produce Marketing (Regulation) Act, 1998 – Land acquisition – Power of withdrawal from an acquisition – Land released by beneficiary by entering into an agreement – Award determining compensation was passed on 19.09.1986 and possession of the land was taken and handed over to the Board on 22.09.1986 – Section 16 of the Act of 1894 puts it beyond doubt that, upon possession being taking over on 22.09.1986, the acquired land vested absolutely in the Government free from all encumbrances – Power of withdrawal from an acquisition, under Section 48 of the Act 1894, can be exercised by the Government only in respect of an acquisition where possession of the land has not been taken – Therefore, it was not open even to the Government to withdraw from the acquisition of the subject land after possession was taken over on 22.09.1986, evidenced by proper documentation – Admittedly no document was ever issued by the Government actually transferring the subject land to the Board, whereby it could claim absolute rights over it – Held that when the State uses its sovereign power of eminent domain and acquires land for a public purpose, as in the case on hand, i.e., for establishment of a grain market under the control of a statutory Board, such an exercise cannot be set at naught by the beneficiary of such acquisition, viz., the statutory Board, by entering into a private agreement shortly after the acquisition so as to reverse the usage of the power of eminent domain by the State – Validating this dubious enterprise by a statutory beneficiary of a compulsory acquisition would be nothing short of permitting a fraud on the exercise of such sovereign power by the State – Viewed thus, the agreement dated 30.09.1988 was clearly in contravention of the fundamental policy of Indian law and the Arbitral Award dated 10.07.2007, upholding the said agreement, was equally so – Held that the Courts exercising jurisdiction under Sections 34 and 37 of the Act, 1996, erred grievously in not setting aside the Arbitral Award dated 10.07.2007 that had upheld the agreement dated 30.09.1988 – Appeal accordingly allowed and the judgment of the Division Bench of the High Court along with the judgment delivered by the learned Judge of the High Court and the Arbitral Award liable to set aside.
(Para 13 to 19)
Delhi Agricultural Marketing Board, Through Its Chairman V. Bhagwan Devi (Dead), Through Her Lr.
Supreme Court: 2025 INSC 367: (DoJ 20-03-2025)
