State Allotted Farmer’s Land to Project-Affected Family Without Taking Possession or Paying Compensation; Bombay High Court Quashes Allotment and Restores Landowner’s Rights
Pune Land Was Acquired in 2000 but Owner Was Never Paid and Possession Was Never Taken; Bombay High Court Declares Acquisition Lapsed and Cancels Later Allotment
Facts
The dispute concerned land bearing Gat No. 1420, admeasuring 5 hectares and 35 ares, situated at Village Sikrapur, Taluka Shirur, District Pune.
The petitioner, Namdev Bhagwan Khedkar, approached the Bombay High Court through his power-of-attorney holder, Dr. Dhananjay Namdev Khedkar. He sought a declaration that the acquisition of part of Gat No. 1420 had lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
A connected petition was filed by the legal representatives of Laxman Gajanan Wadekar. They were project-affected persons who had been allotted land by the State, including a portion from Gat No. 1420.
The two petitions were interdependent. If the acquisition of Gat No. 1420 had lapsed, the State could not legally allot any portion of that land to the Wadekar family. If the acquisition had not lapsed, their claim for allotment would survive.
The acquisition process began on 24 December 1997, when a notification under Section 4 of the Land Acquisition Act, 1894 was issued for acquiring land for rehabilitation of persons displaced by the Chaskaman Irrigation Project.
An inquiry under Section 5A was initiated on 15 January 1998.
The petitioner’s father objected to the proposed acquisition. He contended that Gat No. 1420 did not fall within the beneficial zone of the Chaskaman Irrigation Project.
The Executive Engineer of the project had already issued a letter dated 9 October 1997 stating that Gat No. 1420 was situated at an elevated location and did not fall within the beneficial zone.
Despite this, a declaration under Section 6 was issued on 12 January 1999, including 1 hectare and 61 ares from Gat No. 1420.
Before the award was passed, the Sub-Divisional Officer wrote to the Collector on 15 December 1999 stating that this portion of Gat No. 1420 could be excluded from acquisition.
The land acquisition award was nevertheless passed on 29 February 2000.
The award itself recorded that, after pronouncement of the award, a proposal would be sent under Section 48(1) of the 1894 Act for deletion of Gat No. 1420 from acquisition.
On 2 August 2000, the Sub-Divisional Officer again wrote to the District Rehabilitation Officer requesting deletion of the land. Significantly, that letter also recorded that possession of the land had not been taken.
A purported notice under Section 12(2) was stated to have been issued on 9 June 2000. The petitioner, however, asserted that neither he nor his predecessor received any such notice.
On 30 July 2002, the Commissioner rejected the proposal for deletion under Section 48(1).
The petitioner maintained that he continued to remain in physical possession and that no compensation was ever paid or even properly offered.
Nearly nineteen years later, on 19 June 2019, the Deputy Collector, Rehabilitation, allotted a total of 2 hectares and 40 ares to Laxman Wadekar as a project-affected person. This allotment included 1 hectare and 60 ares from Gat No. 1420.
The petitioner challenged the allotment before the High Court and initially secured an order of status quo. He later withdrew that petition to pursue an appeal before the Additional Commissioner.
The petitioner’s son also complained to the Divisional Commissioner.
This resulted in a detailed report dated 5 August 2019 prepared by the Rehabilitation Department.
The report recorded that:
- Possession of Gat No. 1420 had not been taken;
- Notice under Section 12(2) had not been served;
- Compensation had not been paid;
- The land had not legally vested in the Government;
- Despite this, part of the land had been allotted to the Wadekar family;
- The Government’s name was entered in the revenue record only after the allotment order;
- The land was further transferred shortly after the allotment, raising suspicion.
The Commissioner thereafter ordered an inquiry into the allotment and the conduct of the responsible officials.
On 4 January 2020, the Additional Collector reduced the Wadekar family’s allotment from 2 hectares and 40 ares to 1 hectare and 20 ares, leaving only 40 ares from Gat No. 1420.
That order was set aside by the High Court on 31 January 2020 because the Wadekar family had not been heard.
After remand, the Additional Collector again passed an order on 2 August 2022 reducing the allotment to 1 hectare and 20 ares, including 40 ares from Gat No. 1420.
Namdev Khedkar challenged the acquisition and all consequential allotment orders. The Wadekar family separately challenged the reduction of their allotment.
Issues
The Bombay High Court considered the following issues:
- Whether the acquisition of Gat No. 1420 had lapsed under Section 24(2) of the 2013 Act.
- Whether the petitioner proved both statutory requirements for lapse:
- Possession had not been taken; and
- Compensation had not been paid.
- Whether the State had validly taken advance possession under Section 17 of the Land Acquisition Act, 1894.
- Whether a single-page internal document mentioning “advance possession” was sufficient proof of actual possession.
- Whether possession could be presumed or deemed merely because the State’s name was later entered in the revenue record.
- Whether the Maharashtra amendment to Section 24 could save the acquisition on the basis of deemed possession.
- Whether notices under Sections 9(3), 9(4) or 12(2) established payment or valid tender of compensation.
- Whether the allotment of part of Gat No. 1420 to the Wadekar family was lawful when the land had never vested in the State.
- What relief should be granted to the project-affected Wadekar family if their allotment from Gat No. 1420 was cancelled.
Petitioner’s Arguments
The petitioner argued that the acquisition had lapsed because neither possession was taken nor compensation was paid.
He relied upon the Constitution Bench judgment in Indore Development Authority v. Manoharlal, which held that acquisition lapses under Section 24(2) where both conditions coexist for the requisite period.
The petitioner emphasised that he and his family had remained in continuous possession.
He submitted that the State had no possession receipt, panchanama, memorandum of possession or any other reliable contemporaneous record proving physical takeover.
The petitioner heavily relied on the Rehabilitation Department’s report dated 5 August 2019.
That report was prepared by the State’s own department after an inquiry. It specifically concluded that:
- Possession was not taken;
- Compensation was not paid;
- The statutory notice was not served;
- The land never vested in the Government.
The petitioner further argued that the award itself recognised the objection to acquisition and contemplated deletion of Gat No. 1420 under Section 48(1).
The communications from the Executive Engineer and Sub-Divisional Officer also confirmed that the land did not fall within the project’s beneficial zone and ought to have been deleted.
As regards the State’s claim of advance possession under Section 17, the petitioner argued that none of the mandatory safeguards had been followed.
Under Section 17(3A), before taking urgent possession, the Collector was required to tender and pay 80% of the estimated compensation.
There was no evidence of:
- Tender of 80% compensation;
- Payment of that amount;
- Deposit before a competent court;
- Compensation for standing crops or damage;
- A lawful possession memorandum.
The petitioner relied on Delhi Airtech Services Pvt. Ltd. v. State of Uttar Pradesh, which held that payment or tender of 80% estimated compensation is a mandatory condition before possession can be taken under the urgency provision.
He also argued that the documents relied upon by the State were notices under Sections 9(3) and 9(4), not a valid notice under Section 12(2).
Even the alleged Section 12(2) document was merely an internal communication from the Sub-Divisional Officer to the Talathi. It did not prove actual service upon the petitioner or his predecessor.
The petitioner submitted that, since the acquisition had lapsed, every subsequent allotment order concerning Gat No. 1420 was illegal and required to be quashed.
Wadekar Family’s Arguments
The Wadekar family opposed the claim of lapse.
They argued that advance possession of the land had already been taken under Section 17 of the 1894 Act.
They relied upon a one-page document produced by the State that referred to different Gat numbers and contained the words “advance possession.”
According to them, because possession had been taken, the acquisition could not lapse under the test laid down in Indore Development Authority.
They also relied on the Maharashtra amendment to Section 24 of the 2013 Act.
The amendment provided that where the State’s name was entered in the revenue record within three years of acquisition, possession could be deemed to have been taken.
The Wadekar family also challenged the Additional Collector’s order dated 2 August 2022 reducing the area allotted to them.
They contended that the Additional Collector had no inherent power of review.
According to them, the original allotment dated 19 June 2019 should have been restored because they had been waiting for the land as project-affected persons for several years.
They requested the Court to dismiss the landowner’s petition and restore their full allotment.
State’s Arguments
The State authorities opposed the declaration of lapse.
They maintained that possession had been taken in advance under Section 17.
They relied on the same single-page document and upon a general statement in the award that advance possession of acquired lands had been taken.
The State also relied upon documents said to represent notices issued during acquisition.
However, it was unable to produce:
- A possession panchanama;
- A possession receipt;
- Proof of payment of 80% compensation;
- Proof of tender or deposit;
- Proof of service of notice under Section 12(2);
- Any reliable evidence that physical possession of Gat No. 1420 was actually taken.
The State nevertheless argued that Section 24(2) did not apply and that the acquisition remained valid.
Analysis of the Law
Section 24(2) and the Twin Conditions
Section 24(2) of the 2013 Act provides for deemed lapse of certain old acquisition proceedings where the award was made five years or more before commencement of the 2013 Act and the authorities failed to complete both possession and compensation requirements.
The High Court relied upon the Constitution Bench ruling in Indore Development Authority v. Manoharlal.
The Supreme Court had clarified that the word “or” between possession and compensation must be read as “nor” or “and.”
Therefore, acquisition lapses only where:
- Possession has not been taken; and
- Compensation has not been paid.
If either possession has been taken or compensation has been paid, lapse does not occur.
The High Court therefore examined the evidence separately on both components.
Whether Possession Was Taken
The State’s primary evidence was a single-page document that referred generally to acquired lands and contained the phrase “advance possession.”
The High Court found this document unreliable.
It noted that:
- The document was disjointed and incomplete;
- It did not record the manner in which possession was taken;
- It contained no signature or acknowledgment from the landowner;
- It did not constitute a possession receipt;
- It was not supported by a panchanama;
- The column regarding allotment from Gat No. 1420 was blank;
- It did not prove actual physical takeover of the petitioner’s land.
The Court held that mere use of the words “advance possession” in an internal paper could not substitute legally acceptable proof.
The State had also relied upon a general statement in the award that possession of lands had been taken.
The Court rejected this reliance because the same award specifically recorded the petitioner’s objection and the proposal to delete Gat No. 1420 from acquisition under Section 48(1).
The Court considered it inconsistent for the State to claim that possession had already been taken while simultaneously processing a statutory proposal for deletion.
Section 48(1) ordinarily concerns withdrawal from acquisition where possession has not yet been taken.
The Commissioner’s decision on the deletion application also did not state that the application was barred because possession had already been taken.
This reinforced the petitioner’s case that he remained in possession.
State Department’s Own Report
The Rehabilitation Department’s report dated 5 August 2019 became a major piece of evidence.
It was not a private document prepared by the petitioner. It was an official fact-finding report prepared after inquiry and submitted to the Divisional Commissioner.
The report categorically recorded that:
- Possession of Gat No. 1420 was never taken;
- Compensation was not paid;
- Notice under Section 12(2) was not served;
- The land did not vest in the State;
- The allotment was made before the State’s name was reflected in the revenue record.
The Court held that this report strongly supported the landowner’s claim.
It also recorded adverse findings against the officials responsible for the allotment.
The Court observed that the Commissioner ought to have cancelled the allotment outright after receiving the report, rather than merely continuing the inquiry.
Advance Possession Under Section 17
The State and the Wadekar family argued that possession had been taken under the urgency provision in Section 17.
The High Court examined the statutory safeguards governing urgent possession.
Under Section 17(3), the Collector must offer compensation for standing crops, trees and damage caused by sudden dispossession.
Under Section 17(3A), before taking possession, the Collector must:
- Tender 80% of the estimated compensation;
- Pay it to the persons entitled;
- If payment cannot be made for a legally recognised reason, deposit it in the manner prescribed under Section 31(2).
These requirements are mandatory.
The High Court relied upon Delhi Airtech Services Pvt. Ltd. v. State of Uttar Pradesh.
The Supreme Court had held that the sequence under Section 17 is:
- Tender and payment of 80% estimated compensation;
- Taking possession;
- Vesting of the land in the Government.
If any component is absent, the emergency acquisition process fails.
In the present case, the State produced no evidence of tender, payment or deposit of 80% compensation.
It also produced no record regarding compensation for crops, trees or sudden dispossession.
The Court therefore rejected the theory of urgent or advance possession.
Whether Compensation Was Paid
The State relied upon documents described as notices issued during acquisition.
The High Court found that Exhibit R-4 comprised notices under Sections 9(3) and 9(4).
Such notices merely call upon interested persons to state the nature of their claims. They do not establish payment or tender of compensation.
The purported Section 12(2) notice was an internal communication dated 9 June 2000 from the Sub-Divisional Officer to the Talathi.
It stated that notices were being enclosed for service.
However, it did not prove:
- Actual service upon the petitioner;
- Actual service upon his predecessor;
- Tender of the awarded compensation;
- Deposit of compensation in court;
- Refusal by the landowner to accept payment.
During arguments, the State attempted to tender a photocopy of the reverse side of the document.
Even then, the State’s counsel conceded that it did not show service upon the petitioner or his predecessor.
The Court concluded that compensation had not even been properly offered, much less paid.
The second requirement under Section 24(2) was therefore satisfied.
Deemed Possession Through Revenue Entry
The Wadekar family relied upon the Maharashtra amendment to Section 24.
The amendment provided that possession may be deemed to have been taken where the State’s name was entered in the relevant revenue record within three years of acquisition.
The High Court rejected this argument on facts.
The award was passed on 29 February 2000.
The official report dated 5 August 2019 recorded that the State’s name was entered in the revenue record only after the allotment order dated 19 June 2019.
The entry was therefore made approximately nineteen years after the award, not within three years.
The statutory deeming provision could not apply.
The delayed mutation also supported the conclusion that the land had not vested in the State at the relevant time.
Effect of Land Being Outside the Beneficial Zone
The Court also considered the historical record showing that Gat No. 1420 did not fall within the beneficial zone of the Chaskaman Irrigation Project.
The Executive Engineer had confirmed this position before the acquisition.
The Sub-Divisional Officer repeatedly recommended deletion of the land.
The award itself contemplated a separate deletion proposal.
Although these facts were not by themselves sufficient to establish lapse under Section 24(2), they provided important context.
They explained why:
- Possession was not taken;
- The landowner remained in occupation;
- The State continued considering deletion;
- The land remained untouched for many years;
- The later allotment was inconsistent with the original acquisition record.
The Court found that the State’s own contemporaneous record supported the petitioner’s version.
Precedent Analysis
Indore Development Authority v. Manoharlal
This Constitution Bench decision governed the interpretation of Section 24(2).
It held that acquisition lapses only where both requirements are satisfied:
- Possession has not been taken; and
- Compensation has not been paid.
The Bombay High Court applied this test and found both conditions proved.
The petitioner remained in possession, and the State failed to establish payment or valid tender of compensation.
The precedent therefore directly supported declaration of lapse.
Delhi Airtech Services Pvt. Ltd. v. State of Uttar Pradesh
This judgment concerned urgent possession under Section 17.
It held that tender and payment of 80% estimated compensation under Section 17(3A) is a mandatory precondition.
The required sequence is payment, possession and then vesting.
The State cannot claim lawful urgent possession without showing compliance with that sequence.
The Bombay High Court applied this principle because the State had no evidence of payment or tender of 80% compensation before its alleged possession.
The urgency claim therefore failed.
Court’s Reasoning
The High Court found that the petitioner had successfully proved both statutory requirements for lapse.
On Possession
The Court relied on:
- The petitioner’s continued physical possession;
- The Executive Engineer’s finding that the land was outside the beneficial zone;
- The SDO’s recommendations for deletion;
- The award’s own reference to deletion under Section 48(1);
- Absence of a possession panchanama;
- Absence of a possession receipt;
- Absence of payment under Section 17(3A);
- The Rehabilitation Department’s 2019 report;
- The delayed revenue mutation.
The State’s single-page document was held insufficient.
On Compensation
The Court found:
- No proof of service of Section 12(2) notice;
- No proof of tender;
- No proof of payment;
- No proof of deposit;
- No proof that the petitioner refused compensation.
The notices under Sections 9(3) and 9(4) did not establish payment.
The Court therefore held that the acquisition had lapsed by operation of Section 24(2).
Consequence for the Allotment
Once the acquisition lapsed, Gat No. 1420 never vested in the State.
The State therefore had no lawful authority to allot any portion of it to the Wadekar family.
The High Court quashed:
- The allotment order dated 19 June 2019;
- The Commissioner’s order dated 2 November 2019;
- The Additional Collector’s order dated 2 August 2022.
The earlier order dated 4 January 2020 had already been set aside in separate proceedings.
The Court held that all consequential allotment proceedings concerning Gat No. 1420 were unsustainable.
Relief to the Project-Affected Family
The Court recognised that the Wadekar family’s entitlement as project-affected persons had to be considered independently.
Their allotment from Gat No. 1420 could not survive, but they were not left without remedy.
The State was directed to reconsider their claim for allotment under the applicable rehabilitation policy.
The fresh allotment:
- Must be made in accordance with law;
- Must exclude every portion of Gat No. 1420;
- Must be decided expeditiously;
- Must be completed within eight weeks.
The Court thereby protected the landowner’s proprietary rights while preserving the rehabilitation entitlement of the project-affected family.
Conclusion
The Bombay High Court allowed Namdev Bhagwan Khedkar’s writ petition.
It declared that the acquisition of Gat No. 1420 at Village Sikrapur had lapsed under Section 24(2) of the 2013 Act.
The Court held that the State had failed to prove either payment of compensation or lawful taking of possession.
The claim of advance possession under Section 17 was rejected because:
- No 80% compensation was tendered or paid;
- No possession panchanama was produced;
- No possession receipt was produced;
- No reliable contemporaneous record established physical takeover.
The theory of deemed possession was also rejected because the State’s name was entered in the revenue record nearly nineteen years after the award.
All orders allotting land from Gat No. 1420 to the Wadekar family were quashed.
At the same time, the State was directed to consider and allot alternative land to the Wadekar family within eight weeks, excluding Gat No. 1420.
The judgment thus balanced two competing claims:
- Restoration of landowner rights where acquisition had legally lapsed; and
- Rehabilitation of genuine project-affected persons through alternative land.
Key Takeaways
- Acquisition lapses under Section 24(2) only where both possession was not taken and compensation was not paid.
- A vague internal document mentioning “advance possession” is not sufficient proof of actual possession.
- State authorities should produce reliable records such as a possession panchanama or receipt.
- Urgent possession under Section 17 requires prior tender and payment of 80% estimated compensation.
- Without compliance with Section 17(3A), the land cannot lawfully vest through urgent possession.
- Notices under Sections 9(3) and 9(4) do not prove payment of compensation.
- An internal instruction to serve a Section 12(2) notice does not prove actual service.
- A delayed revenue mutation cannot establish deemed possession under a provision requiring entry within three years.
- Land that never vested in the State cannot be allotted to third parties.
- Official departmental inquiry reports can decisively undermine the State’s litigation position.
- Courts may cancel an illegal allotment while separately protecting the rehabilitation rights of project-affected persons.
Case Details
Case: Namdev Bhagwan Khedkar through Power of Attorney Holder Dr. Dhananjay Namdev Khedkar v. State of Maharashtra and Others, with Laxman Gajanan Wadekar through Legal Representatives and Others v. Additional Commissioner, Pune and Others
Court: Bombay High Court
Case Numbers: Writ Petition No. 11150 of 2022 with Interim Application No. 18257 of 2022; Writ Petition No. 10352 of 2022
Judges: Justice Manish Pitale and Justice Shreeram V. Shirsat
Reserved On: 15 July 2026
Date: 24 July 2026
Result: Acquisition of Gat No. 1420 declared lapsed under Section 24(2). All allotment orders concerning that land were quashed. The State was directed to consider alternative land allotment for the project-affected Wadekar family within eight weeks, without including any portion of Gat No. 1420
