1. Land acquisition — Compensation — Allotment of 15% developed land in lieu of monetary compensation under government policy. (Para 3 , 4 , 5 , 6 )
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2026 Supreme(Raj) 474
HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR
SANJEEV PRAKASH SHARMA, CJ, SANGEETA SHARMA, J.
Jaipur Development Authority Through Secretary Jaipur Development Authority - Appellant
Versus
Sai Darshan Hotels And Motels Private Limited – Respondent
D.B. Civil Special Appeal (Writ) No. 658 of 2010 In S.B. Civil Writ Petition No.3857 of 2003
Decided On : 16-03-2026
Important Points
The state is bound by promissory estoppel to allot developed land in lieu of compensation if a party has withdrawn litigation based on a government policy, provided the actual monetary compensation was never paid to the landholders.
Subject
Land Law - Land Acquisition
Act Referred
RAJASTHAN LAND ACQUISITION ACT: S.18, S.4, S.5(a), S.54, S.6, S.90
Headnote
(A) Land Acquisition - Compensation - Policy for Allotment of Developed Land - Where land is acquired and possession is taken, but monetary compensation is not actually paid to the landholders or their assignees, the right to receive compensation survives. Under a state policy allowing 15% developed land in lieu of monetary compensation subject to the withdrawal of pending litigation, a party who surrenders rights and withdraws litigation is entitled to such allotment. (Paras 16, 18)
(B) Promissory Estoppel and Legitimate Expectation - When the state government issues orders for the allotment of developed land based on a specific policy and the beneficiary performs their part of the obligation (such as withdrawing litigation before the apex court), the state is bound by the principle of promissory estoppel. A subsequent attempt to keep such orders in abeyance is unjustified, illegal, and violative of the doctrine of legitimate expectation. (Para 19)
(C) Payment of Compensation - Use of the term "paid" in the context of land acquisition does not include the mere deposit of compensation in court. If the amount is not received by the beneficiaries, the obligation of payment remains unfulfilled. (Paras 16, 17)
(D) Administrative Law - Validity of Orders in Abeyance - An order of allotment that has attained finality cannot be effectively neutralized by simply keeping it in abeyance without a formal cancellation. Such an approach, described as giving with one hand and withdrawing with the other, is not acceptable in a court of law. (Para 26)
Facts of the case:
Land was acquired under the applicable land acquisition laws, and possession was taken by the development authority. While awards for compensation and enhanced compensation were passed, the funds were either not collected or not deposited, meaning the landowners and their subsequent assignees never received payment. The respondent company, having acquired rights from the original owners, applied for the allotment of 15% developed land in lieu of compensation as per a government policy. The state government issued orders for the allotment of a specific plot of 9000 square meters, upon which the respondent withdrew all pending litigations. Later, the state government kept these allotment orders in abeyance. The single judge quashed the order keeping the allotment in abeyance, which was subsequently challenged by the development authority.
Findings of Court:
The court found that the respondent company had not received any monetary compensation, thus its right to seek an alternative under the state policy remained valid. Since the respondent had performed its obligation of withdrawing litigation, the state government was bound by its promise to allot the developed land. The court noted that the allotment orders had attained finality and the action of keeping them in abeyance was legally unsustainable.
Issues: The main issues were whether the respondent was entitled to 15% developed land in lieu of compensation under the state policy and whether the government could legally keep the allotment orders in abeyance after the respondent had withdrawn its litigations.
Ratio Decidendi: The court ruled that mere deposit of compensation in court does not constitute "payment" to the landowner. Furthermore, once a party acts upon a government's promise to their detriment (by withdrawing legal challenges), the state is precluded by the doctrine of promissory estoppel from reneging on that promise. An official order cannot be kept in abeyance to avoid fulfilling a finalized obligation.
Result: Special Appeal dismissed.
(B) Promissory Estoppel and Legitimate Expectation - When the state government issues orders for the allotment of developed land based on a specific policy and the beneficiary performs their part of the obligation (such as withdrawing litigation before the apex court), the state is bound by the principle of promissory estoppel. A subsequent attempt to keep such orders in abeyance is unjustified, illegal, and violative of the doctrine of legitimate expectation. (Para 19)
(C) Payment of Compensation - Use of the term "paid" in the context of land acquisition does not include the mere deposit of compensation in court. If the amount is not received by the beneficiaries, the obligation of payment remains unfulfilled. (Paras 16, 17)
(D) Administrative Law - Validity of Orders in Abeyance - An order of allotment that has attained finality cannot be effectively neutralized by simply keeping it in abeyance without a formal cancellation. Such an approach, described as giving with one hand and withdrawing with the other, is not acceptable in a court of law. (Para 26)
Facts of the case:
Land was acquired under the applicable land acquisition laws, and possession was taken by the development authority. While awards for compensation and enhanced compensation were passed, the funds were either not collected or not deposited, meaning the landowners and their subsequent assignees never received payment. The respondent company, having acquired rights from the original owners, applied for the allotment of 15% developed land in lieu of compensation as per a government policy. The state government issued orders for the allotment of a specific plot of 9000 square meters, upon which the respondent withdrew all pending litigations. Later, the state government kept these allotment orders in abeyance. The single judge quashed the order keeping the allotment in abeyance, which was subsequently challenged by the development authority.
Findings of Court:
The court found that the respondent company had not received any monetary compensation, thus its right to seek an alternative under the state policy remained valid. Since the respondent had performed its obligation of withdrawing litigation, the state government was bound by its promise to allot the developed land. The court noted that the allotment orders had attained finality and the action of keeping them in abeyance was legally unsustainable.
Issues: The main issues were whether the respondent was entitled to 15% developed land in lieu of compensation under the state policy and whether the government could legally keep the allotment orders in abeyance after the respondent had withdrawn its litigations.
Ratio Decidendi: The court ruled that mere deposit of compensation in court does not constitute "payment" to the landowner. Furthermore, once a party acts upon a government's promise to their detriment (by withdrawing legal challenges), the state is precluded by the doctrine of promissory estoppel from reneging on that promise. An official order cannot be kept in abeyance to avoid fulfilling a finalized obligation.
Result: Special Appeal dismissed.
Legal Category Hierarchy
- administrative law
- land acquisition
- practice and procedure
- property law
Advocates Appeared:
For the Appellant : Mr. Amit Kuri with Mr. Ayush Sharma, Mr. Dharma Ram, Ms. Nandini Mirdha
For the Respondent:Mr. Rajendra Prasad, Adv. General assisted by Mr. Sheetanshu Sharma, Ms. Dhriti Laddha Mr. Ajit Kumar Sharma, Senior Advocate assisted by Mr. Namo Narayan Sharma, Mr. Abhishek Kaushik, Ms. Khusboo Rathore, Mr. Rachit Sharma, Mr. Madhav Dadhich
For the Appellant : Mr. Amit Kuri with Mr. Ayush Sharma, Mr. Dharma Ram, Ms. Nandini Mirdha
For the Respondent:Mr. Rajendra Prasad, Adv. General assisted by Mr. Sheetanshu Sharma, Ms. Dhriti Laddha Mr. Ajit Kumar Sharma, Senior Advocate assisted by Mr. Namo Narayan Sharma, Mr. Abhishek Kaushik, Ms. Khusboo Rathore, Mr. Rachit Sharma, Mr. Madhav Dadhich
Table of Contents
2. Dispute over whether the petitioner was entitled to allotment of land in lieu of compensation and whether JDA was aggrieved. (Para 10 , 11 , 12 , 13 , 14 )
3. Policy for 15% developed land in lieu of monetary compensation upheld; government bound by promissory estoppel as petitioner withdrew litigation. (Para 18 , 19 , 20 , 21 , 23 , 24 , 25 )
4. Non-payment of compensation — Doctrine of promissory estoppel applies — Government bound by its policy once conditions fulfilled. (Para 16 , 17 , 18 , 19 )
5. Special appeal dismissed — Order of Single Judge upheld — JDA directed to allot plot per government orders. (Para 29 , 30 )
6. Does the deposit of compensation in court amount to 'paid' under Section 24(2) of the Act of 2013?
No. The expression 'paid' in Section 24(2) does not include a deposit of compensation in court; non-deposit does not result in lapse of proceedings. (Para 17 )
7. Can the government withdraw from a policy decision after the promisee has acted upon it?
No. The government is bound by the principle of promissory estoppel when the other party performs its obligations in reliance on the policy. (Para 19 )
8. What is the effect of keeping an order in abeyance without cancellation?
Keeping an order in abeyance does not cancel it; such action of giving and withdrawing simultaneously is not acceptable in a court of law. (Para 26 )
JUDGMENT :
SANJEEV PRAKASH SHARMA, CJ.
1. The present special appeal has a chequered history. The brief facts need to be noticed are that The Jaipur Development Authority (for short, "JDA") has preferred this special appeal challenging the order passed by the learned Single Judge dated 06.08.2009 whereby he allowed the writ petition and quashed the order dated 23.06.2009.
2. Before further going into the aspect regarding the aforesaid impugned judgment of the Single Bench, it would be appropriate to notice certain events which are pertinent for deciding the case.
3. On 21.08.1969, a notification was issued by the State under Section 4 of the RAJASTHAN LAND ACQUISITION ACT , 1953 (for short, "the Act of 1953") for acquiring the lands. On 02.08.1971, the land acquisition officer recommended acquisition of the land and after enquiry under Section 5A of the Act, on 12.04.1973, Section 6 notification was published acquiring land measuring 23 Bigha 16.5 Biswa in Khasra Nos. 35 to 43, 43/222, 43/223 and 43/224 in village Chainpura Tehsil Sanganer. Final award was passed by the land acquisition officer on 09.04.1981 awarding a sum of Rs.1,38,180/- each in favour of the Khatedars namely Adyodhya Prasad and Shri Daulat Babu sons of Shri Kashi Prasad Tiwari, who was the original Khatedar of the land in question. On 04.05.1981, the predecessor of JDA i.e. UIT sent a cheque of Rs.2,76,360/- to the land acquisition officer.
4. A reference was made to enhance the compensation to the Civil Court on 06.06.1981 under Section 18 of the Act. However, the enhanced compensation was not deposited. On 22.10.1983, possession of the land was taken by the JDA, after it came into existence vide notification dated 12.09.1982.
5. The Khatedars also challenged the notification under Section 6 of the Act of 1953 before the High Court but the same was dismissed by the learned Single Judge. Special Appeals were filed but the same were also dismissed. Thereafter, SLP was preferred by the Khatedars before the Hon’ble Supreme Court challenging the notification but the same was also dismissed by common order dated 29.08.1983. The widow of the original Khatedar Smt. Savitri Devi had executed a sale deed with regard to the same property with one Hathroi Grah Nirman Sahkari Samiti on 05.07.1973. Hathroi Grah Nirman Sahkari Samiti submitted a writ petition being S.B. Civil Writ Petition No. 2090/1987 challenging the notification under Section 4 of the Act of 1953 which was dismissed by the High Court vide order dated 29.08.1996. Against the said judgment, D.B. Special Appeal was preferred, which too was dismissed on 16.09.1996. Thereafter, one Udit Gopal Beri and 10 other persons, who were members of the Society, filed writ petition being S.B. Civil Writ Petition No.95/1997 and the same came to be dismissed by this Court vide judgment dated 05.09.2000. Other members also filed writ petition being S.B. Civil Writ Petition No. 2222/1999 [Pramila Kumari and Ors. Vs. State of Rajasthan and Ors.] and S.B. Civil Writ Petition No. 2225/1999 [Smt. Anupama Agrawal and Ors. Vs. State of Rajasthan and Ors.] and the same were dismissed by the Single Bench on 29.10.2001. The plea for regularization was raised but the same was also rejected. The petitioner company came up and filed the petition before this Court stating that it had acquired the rights of the land through the assignees of the Khatedars and submitted two applications on 29.03.2003 and 01.05.2003 to the State Government for securing allotment of 15% developed land in lieu of surrender of the land.
6. It is pertinent to note that the State Government, in view of the policy decision taken, issued a circular dated 13.12.2001 and issued directions to the effect that allotment of 15% developed land be made in lieu of monetary compensation for the land which had been surrendered under acquisition. In view of the said circular, the petitioner had submitted aforesaid applications dated 29.03.2003 and 01.05.2003.
7. However, whe
