In Ram Chand and Ors. v. Union of India and Ors. reported in (1994) 1 SCC 44 certain parcels of land had been demarcated and declared for compulsory acquisition vide a notification, sometime between the years 1959-1965. However, the awards for compensation came to be passed almost fourteen-years later in the year 1980. These awards came to be challenged before the Court on the ground that since the statute in question provides for payment of compensation in respect of the acquisition made at the market value of the land, as it stood, at the time of publication of the notification for declaration, the same necessarily meant that compensation ought to be paid expeditiously and without delay.
The Court held that although the legislature by way of an amendment has now prescribed a time-limit for making an award, yet it does not mean that prior to such amendment there was no time-limit for payment of compensation or that an award could be passed by the authorities at their own pace and leisure.
It held that where for exercise of any power no time-limit has been prescribed, such power has to be exercised within a reasonable period of time. It further held that sans any fixed time-limit, such powers cannot be exercised or subjected to delay in a manner that violates or circumvents the object of the statute and the constitutional mandate under Article 31A of timely acquisition and adequate compensation, respectively. The relevant observations read as under:
“14. The Parliament has recognized and taken note of the inaction and non-exercise of the statutory power on the part of the authorities, enjoined by the provisions of the Act to complete the acquisition proceedings within a reasonable time and because of that now a time-limit has been fixed for making of the award, failing which the entire proceeding for acquisition shall lapse. But, can it be said that before the introduction of the aforesaid amendment in the Act, the authorities were at liberty to proceed with the acquisition proceedings, irrespective of any schedule or time-frame and to complete the same as and when they desired?
It is settled that in a statute where for exercise of power no time-limit is fixed, it has to be exercised within a time which can be held to be reasonable. This aspect of the matter can be examined in the light of second proviso to Article 31-A of the Constitution, which in clear and unambiguous terms prohibits making of any law which does not contain a provision for payment of compensation at a rate, which shall not be less than the market value thereof. The Act is consistent with the second proviso to Article 31-A, because it provides for payment of compensation at the market value of the land acquired.
But, whether the constitutional and statutory requirement of the payment of the market value to the persons, whose lands have been compulsorily acquired, is not being circumvented and violated by keeping the land acquisition proceedings pending for more than a decade and half, without making the awards and paying the compensation, which has been pegged to the dates of notifications under sub-section (1) of Section 4 of the Act, which in the present cases had been issued 14 to 21 years before the making of the awards. […]”