Mere Non-Recording of Protest Does Not Bar Reference Under Section 18 of Land Acquisition Act, 1894; State Directed to Pay Differential Compensation with Solatium, Additional Market Value, and Interest
In a landmark decision delivered on September 3, 2026, a Division Bench of the Telangana High Court, comprising Justices P. Sam Koshy and Vakiti Ramakrishna Reddy, upheld the rights of 55 land losers whose applications for reference under Section 18 of the Land Acquisition Act, 1894, were unlawfully rejected on the ground of non-protest at the time of receiving compensation. The judgment, rendered in Writ Appeal No. 6 of 2025, dismissed the State of Telangana's appeal and confirmed the earlier order of the Single Judge directing the authorities to re-determine the compensation payable to the affected persons.
Background:
The case arose from the acquisition of residential houses and lands in Hathini village, Dahegaon Mandal, Kumuram Bheem Asifabad District, for the P.P. Rao Project in 2002-2003. The Land Acquisition Officer awarded compensation limited to the estimated value provided by the engineering authority, omitting statutory components such as solatium and additional market value as mandated by Section 23 of the Act.
Within six weeks of the award dated May 26, 2003, fifty-five affected persons filed applications under Section 18 of the Act seeking a reference to the civil court for a fair determination of compensation. However, these applications were rejected by the Revenue Divisional Officer on August 1, 2003, solely because the claimants had not registered an express protest while receiving the compensation amount.
Notably, ten other awardees under the same acquisition and award succeeded in obtaining enhanced compensation through a civil court reference (L.A.O.P. No. 32 of 2011), which was upheld by a Division Bench of the Telangana High Court in January 2020.
Legal Issues and Court's Analysis:
The primary legal question was whether the rejection of Section 18 applications on the absence of protest was sustainable, and whether the subsequent applications under Section 28-A for re-determination of compensation filed beyond the prescribed three-month limitation period could be rejected.
The Court emphasized that neither Section 18 nor the second proviso to Section 31(2) of the Act prescribes a specific form or mode for protest. A written application for reference under Section 18 within the statutory period itself amounts to an implied protest, manifesting non-acceptance of the award, notwithstanding receipt of compensation. This principle aligns with the Supreme Court's ruling in Ajit Singh v. State of Punjab and subsequent authoritative decisions including Kotipalli Chitti v. Special Deputy Collector and District Collector, Kakinada v. P. Nagabhushana Rao.
The Court observed that the arbitrary rejection of applications on the ground of non-protest was inconsistent with the treatment of the ten co-awardees whose applications had been accepted despite similar circumstances, thereby violating Article 14 of the Constitution which guarantees equality before law.
Regarding the limitation under Section 28-A, the Court clarified that this provision benefits persons who did not make an application under Section 18. Since the writ petitioners had applied timely under Section 18 and were unlawfully denied a reference, their claim was not governed or barred by the limitation under Section 28-A. The later applications under Section 28-A were mere attempts to obtain relief denied earlier due to illegal rejection.
On the question of delay and laches, the Court found that the writ petitioners were displaced, illiterate persons who had consistently pursued their claims. The delay was attributable to administrative lapses, non-communication of rejection orders, and the State's failure to act on their representations. No prejudice accrued to the State or third parties. Hence, delay and laches could not bar their claim.
Finally, the Court underscored that compensation under the Land Acquisition Act is composite, including market value, solatium (additional 30%), an additional market value component (12%), and interest as prescribed under Sections 23(1-A), 23(2), 28, and 34 of the Act. The re-determined compensation must incorporate all these statutory elements.
Relief Granted:
The Telangana High Court directed the fourth appellant (Land Acquisition Officer) to re-determine compensation payable to the respondents/writ petitioners by adopting the rates fixed by the judgment dated February 5, 2018, in L.A.O.P. No. 32 of 2011, on the file of the Senior Civil Judge, Asifabad, which had been confirmed by the Division Bench in 2020. The differential compensation, inclusive of solatium, additional market value, and interest, is to be paid within three months from receipt of the judgment copy. The authorities are also instructed to disburse amounts due to legal representatives of deceased awardees upon proper application.
Significance:
This ruling affirms the principle that procedural technicalities such as non-recording of protest cannot defeat substantive rights of land losers to fair compensation. It reinforces the statutory scheme that compensation under the Land Acquisition Act is a composite amount and that the courts will protect vulnerable displaced persons from arbitrary denial of their lawful entitlements. The decision also clarifies that limitation under Section 28-A cannot be used as a shield by authorities to deny valid claims when earlier remedies under Section 18 have been illegally rejected.
The judgment serves as a reminder to the government and acquisition authorities to act fairly, promptly, and in accordance with law while dealing with land acquisition compensation claims, ensuring justice for displaced and economically weaker sections.
Statutory provision(s): Land Acquisition Act, 1894 Sections 18, 23(1), 23(1-A), 23(2), 28, 28-A, 31(2), 34; Constitution of India Article 14, Article 226
State of Telangana v. Bandari Rajaiah, (Telangana)(DB) : Law Finder Doc Id # 2981452
