Supreme Court rules that parties to a voluntarily concluded compensation agreement cannot later seek additional interest payments under statutory provisions - once agreement is finalized, it becomes sacrosanct and excludes other statutory remedies.
Can a party to a concluded contract, voluntarily and statutorily entered into, seek further relief by taking refuge under the statutory provisions?
No, once a voluntary agreement is concluded under Section 7 of the Tamil Nadu Acquisition of Land for Industrial Purposes Act, 1997, parties cannot seek additional statutory benefits.
The Supreme Court has clarified that a concluded contract voluntarily entered into between parties would exclude itself from purview of the 1997 Act thereafter.
The court set aside the High Court's direction to pay interest under Section 12 of the 1997 Act, ruling it was wrongly applied to a voluntary agreement.
Original Lease: Lease agreements entered for lands in Singanallur and Kalapatti villages with Department of Defence
Tripartite Agreement: AAI, Tamil Nadu Government and landowners finalize 5% land value as lease rent with revaluation intervals
Acquisition Initiated: Proceedings started under 1997 Act for Coimbatore Airport expansion
Compensation Agreement: Meeting on 06.03.2018 fixes compensation at ₹1500/sq.ft (residential) and ₹900/sq.ft (agricultural)
Government Approval: G.O. (Ms) No.173 approves compensation rates from March 2018 meeting
High Court Judgment: Orders interest payment under Section 12 from date of Section 3(2) notice
Supreme Court Finality: Sets aside High Court direction, establishes concluded contract excludes statutory remedies
| Situation | Your Rights | Limitations |
|---|---|---|
| Accepted compensation under Section 7(2) agreement | Right to receive agreed compensation amount | Cannot claim additional interest under Section 12 |
| Agreement reached after reference to Collector | Right to have agreement honored under Section 7(4) | Cannot reopen determination through statutory procedures |
| Compensation accepted without protest | Right to finality of agreed settlement | Estopped from claiming additional statutory benefits |
| Voluntary agreement without coercion | Right to binding nature of voluntary contract | Cannot approbate and reprobate - accept benefits then challenge |
A final and binding agreement between parties that governs their rights and obligations, excluding recourse to statutory remedies.
Legal principle preventing a person from asserting something contrary to what is implied by their previous actions or statements.
Principle that prevents a party from accepting benefits under an instrument while challenging its validity or other provisions.
Voluntary compensation determination between government and landowners under Tamil Nadu Acquisition of Land for Industrial Purposes Act.
"Once such an agreement is arrived at, it becomes a concluded contract under Section 3 of the Indian Contract Act, 1872. The rights and liabilities of the parties would only be governed by the terms of the contract. Hence, a contract voluntarily entered into between the parties, shall not be disturbed by taking recourse to the statutory provisions, which are sought to be excluded by such contract."
"A party to a contract cannot be permitted to have recourse to two different modes, especially after having accepted the compensation under the contract without any demur or protest. It is not open to either of the parties to resile from the terms of the agreement arrived at."
This landmark judgment establishes that voluntary compensation agreements under land acquisition laws are final and binding. Once landowners accept compensation through negotiated settlement, they cannot later claim additional statutory benefits like interest payments. The ruling protects the sanctity of voluntary agreements while ensuring parties understand the finality of their decisions.
This content is for informational purposes only and does not constitute legal advice. Consult a qualified legal professional for specific legal guidance. The information provided is based on judicial interpretation and may be subject to changes in law.
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This analysis decodes a complex property law judgment to help citizens understand the finality of voluntary compensation agreements in land acquisition cases.