Kiran Raj

The Supreme Court Division Bench of Justice Sanjay Kumar and Justice K. Vinod Chandran on Tuesday (January 27) held that allegations of excessive land acquisition compensation being disbursed to a few beneficiaries in collusion with officials do not, by themselves, nullify the compensation payable to other landowners. The Court set aside the Chhattisgarh High Court’s orders that had cancelled the compensation in favour of a landowner whose case was not shown to be tainted by the inquiry into overpayment. Restoring both the original compensation award and the enhanced amount granted by the arbitrator, the Court directed that the balance compensation, along with applicable interest and solatium, be paid within three months.

Land in the State of Chhattisgarh was acquired for a Special Rail Project notified on 31.08.2017 for the Rowghat–Jagdalpur stretch between Dallirajhara–Jagdalpur. After an award was passed, some landowners approached the Arbitrator constituted under the Land Acquisition (Special Railway Projects) Rules, 2016 for the purpose of sub-section (6) of Section 20-F of the Railways Act, 1989, and enhancement was granted.

Also Read: Supreme Court Dismisses Plea To Raise Judge-To-Population Ratio To 50 Per Million, Says Issue To Be Handled Administratively

An inquiry was initiated alleging that excessive amounts far greater than the actual land value had been awarded, and an FIR was registered against the Competent Authority, the Arbitrator, other revenue officials, and persons alleged to have derived unjust enrichment. Writ petitions were filed in the High Court challenging the inquiry report, the freezing of accounts, and the criminal case; a joint venture company connected with the project also filed a writ petition impleading the State, its officers, and certain landowners alleged to be beneficiaries.

Separately, a landowner received compensation under an award dated 12.02.2018, sought enhancement before the Arbitrator, and enhancement was allowed by an order dated 28.06.2019. After the Collector’s inquiry report, an order dated 02.08.2019 kept determination and disbursement of additional compensation, solatium, interest, and disbursement in abeyance, and later orders set aside the awards by following the earlier High Court judgment.

The Court stated the issue as: “Whether the setting aside of an award of compensation for land acquisition, on grounds of it being excessive and resulting in unjust enrichment of some land owners, acting in collusion with the competent authority and the revenue officials, who acted in colourable exercise of powers would ipso facto result in the entire award with respect to the acquisition being set aside is the question arising in this appeal.”

On the appellant’s position in relation to the inquiry and criminal proceedings, the Court recorded: “The appellant herein was not a land owner who was proceeded against based on the inquiry report, either for the purpose of freezing of account or arrayed as an accused in the FIR lodged.”

It noted the limited set of persons targeted in the earlier High Court proceedings: “There was a total of 550 land owners who were the beneficiaries of the award. Only five were impleaded in the writ petition from amongst the 550.”

On the effect of parallel proceedings, the Court stated: “Since the appellant herein had not been proceeded against for refund or by a prosecution launched, the result of the SLP filed by the others who were specifically proceeded against by the Railways would be of no consequence in the present case.”

It then recorded its view on the scope of setting aside orders in relation to non-parties: “We cannot but observe that while the arbitral award and the initial award were set aside the learned Single Judge ought to have noticed that the challenge is only against the five respondents impleaded therein and the setting aside, can affect only them.”

On the absence of allegations against the appellant, the Court recorded: “Nor has it found any identity of cause or similarity in quantum or an unjust enrichment based on the prevailing market value, insofar as the appellant is concerned.”

On review power, it stated: “Pertinent also is the fact that the Railways Act of 1989 does not confer any power to review, on the Competent Authority authorized by the Central Government or the Arbitrator appointed under the Rules of 2016.”

Also Read: Executive Officer Deciding Municipal Mutation Proceedings Covered As ‘Judge’ Under Judges (Protection) Act: Patna High Court

The Court directed: “The judgment in writ appeal and that in the writ petition impugned herein are set aside. Annexure P-7 order, keeping in abeyance the enhanced compensation, as awarded by the Arbitrator and Annexure P-9 order issued by the Commissioner, Bastar Division, cancelling the earlier award and concluding the proceedings are both set aside.”

“The initial award as on 12.02.2018 passed in favour of the appellant and the enhancement granted by the Arbitrator on 28.02.2019 stands restored. The entire award amounts, deducting what has already been granted, with interest and solatium as applicable till the date of disbursement, shall be disbursed within a period of three months. The appeal stands allowed.”

Advocates Representing the Parties

For the Petitioners: Mr. Shoeb Alam, Senior Counsel
For the Respondents: Mr. Brijender Chahar, Additional Solicitor General, Mr. Nachiketa Joshi, Senior Counsel and Mr. Tushar Mehta, Deputy Advocate General

Case Title: Niraj Jain Versus Competent Authority-cum-Additional Collector, Jagdalpur & Ors.
Neutral Citation: 2026 INSC 86
Case Number: Civil Appeal @ SLP (C) No.7061 of 2025
Bench: Justice Sanjay Kumar, Justice K. Vinod Chandran