Lok Adalat Cannot Decide Who Owns Acquired Land: Supreme Court Sets Aside 16 Awards Splitting Compensation

Case at a Glance

The Supreme Court has set aside 16 Lok Adalat awards that apportioned enhanced land acquisition compensation among rival claimants in Telangana, holding that title disputes over compensation must be decided by the civil court on a Section 30 reference. It held that a Section 29 agreement needs all interested persons, that an enjoyment survey shows only physical occupation, and that Order I Rule 8 CPC cannot turn rival title holders into a single class.

Land at Kommepalli, Sathupalli Mandal, was acquired for mining by Singareni Collieries Company Ltd. The Land Acquisition Officer's award of 30 December 2013 fixed compensation at Rs 3,48,935 per acre and referred the matter to the Principal District Judge, Khammam, under Sections 30 and 31 of the Land Acquisition Act, 1894. During writ proceedings, the company offered a settlement and the claimants agreed to Rs 10,95,000 per acre, with the title dispute to be resolved.

On 29 March 2016, a Lok Adalat at Khammam passed 16 awards naming individual holders. The appellants, rival claimants who had not signed, challenged them. The Principal District Judge reported that the awards recorded no compromise among disputed title holders. The Telangana High Court nevertheless upheld the awards on 17 August 2022, treating the proceedings as a class-action settlement under Order I Rule 8 CPC.

The Key Question Before the Court

Can a Lok Adalat apportion acquisition compensation among rival title claimants, binding those who never signed the settlement?

Apportionment Belongs to the Civil Court

The Court explained that apportionment disputes are resolved either by agreement of all interested persons under Section 29 or by reference to the court under Section 30; “The Collector has no power to finally adjudicate upon the title to compensation”, as held in G.H. Grant v. State of Bihar, (1965) 03 SC CK 0049. A partial agreement is not enough (Sharda Devi v. State of Bihar, (2003) 01 SC CK 0080). An enjoyment survey “captures nothing more than the fact of physical occupation on the land” and cannot decide entitlement.

Order I Rule 8 requires a common interest; rival title holders are not a class, and “to treat such rival claims as a single class is to elide the very dispute”. Relying on Vasant Nanaji Patre and Regulation 17(2) of the NALSA Lok Adalat Regulations, the Court held that a Lok Adalat award binds only the parties who signed it.

What the Court Actually Held

• The Telangana High Court judgment of 17 August 2022 was set aside.
• The apportionment reference was remitted to the Principal District Judge, Khammam, for a fresh hearing after notice to all concerned.
• The reference is to be decided within six months, uninfluenced by the Court's observations.
• The Registry was directed to send copies of the judgment to all High Courts.

Why This Judgment Matters

• It limits the use of Lok Adalats where title to compensation is genuinely disputed.
• It clarifies that enjoyment surveys do not establish entitlement.
• It protects non-signatory claimants from settlements they never joined.

What Should Advocates Take Away From the Judgment?

For Rival Claimants

• Insist on a Section 30 reference where title is disputed.
• Challenge Lok Adalat awards you did not sign under Regulation 17(2).

For Acquiring Bodies and Authorities

• Avoid apportioning compensation through partial settlements.
• Do not treat enjoyment survey data as proof of title.

Key Takeaways

Frequently Asked Questions

No. The Court ordered no new amounts; it sent the apportionment reference back for fresh decision.

Rival title holders lack the common interest needed for a representative proceeding.

Six months from the judgment.

Conclusion

Read the full judgment on CourtKutchehry: View judgment →