Jaypee Infratech compensation to land owners: Supreme Court backs High court

Supreme court

The Supreme Court on Friday refused to stay the Allahabad High Court order that referred to the arbitration on a dispute between Yamuna Expressway Industrial Development Authority (YEIDA) and Jaypee Infratech over payment of enhanced compensation to land owners. Land was acquired for the construction of the Yamuna Expressway, a Special Development Zone and land for development by the Jaypee group, from more than 10,000 farmers from several villages falling in the YEIDA area. The land owners have to be given enhanced compensation for 2,500 hectares of land in five parcels. According to the YEIDA, it has to collect more than Rs 2,500 crore from the company towards this enhanced compensation. A bench headed by Justice AK Sikri rejected YEIDA’s plea to stay the HC order and asked it to raise all its contention before the arbitrator.

Challenging the HC order, the authority told the SC that the HC had erred in law by referring the dispute to arbitration as Jaypee had sought quashing of the government order of May 2014 that raised the demand of Rs 2,500 crore from the developer. YEIDA alleged that this is an “abuse of process of law” by the developer as no arbitration clause in the agreement exists between it and the developer and even no consent was given either by it or the state government for arbitration. The authority contended that in the Gajraj Singh case, the Supreme Court had in May 2015 enhanced compensation to land owners.

Therefore, because of this judgment, land owners were entitled for the additional 64.7% compensation, which must be paid by the Jaypee Infratech.

The High Court had in November last year referred the dispute to arbitration after the developer had challenged YEIDA’s demand notice for enhanced compensation. Jaypee had argued that it was not entitled to pay money to the land owners as it had already paid the amount as per its agreement with the authority.

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