From Partial Taking to Total Loss: Margin Requirements, Setbacks, and the Doctrine of Constructive Acquisition of Industrial Land

1. Introduction: The Jurisprudential Landscape of Functional Integrity

The exercise of eminent domain, the sovereign power to compulsorily acquire private property for public purpose, inherently creates a friction between the developmental imperatives of the State and the proprietary rights of the individual. This friction is most acute not when the State acquires an entire property, but when it acquires a portion thereof, leaving behind a residue that is physically truncated or legally sterilized. The user’s query addresses a sophisticated and increasingly litigated intersection of land acquisition law and municipal planning statutes: the scenario where the partial land acquisition of industrial property triggers mandatory statutory setbacks or “margin requirements” on the remaining land, rendering the residue effectively unusable for its intended industrial purpose.

This report posits that the unusability of the remaining land due to the imposition of new margin lines is not merely a collateral inconvenience but a “necessary consequence” that triggers the protective provisions of Section 9 of the Land Acquisition Act, 1894 (now repealed) and its successor, Section 94 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (RFCTLARR Act). The analysis demonstrates that the “margin” serves as a form of constructive acquisition; while the State may technically acquire only the footprint of the road or railway track, the operation of law—specifically municipal bye-laws or safety statutes—simultaneously appropriates the utility of the adjacent strip, mandating its preservation as open space.

The legal consequence of this phenomenon is the activation of the “Organic Unity” test. Indian courts, drawing from both English common law and statutory interpretation, have consistently held that a “manufactory” is not merely the brick-and-mortar structure housing machinery, but the functional ecosystem comprising the main buildings, auxiliary structures, and the essential open spaces required for operations, logistics, and regulatory compliance. When an acquisition slices through this ecosystem such that the remaining land falls within a statutory “no-build” zone (margin), the factory ceases to function as a viable economic unit. In such instances, the law mandates that the acquiring authority—whether it be the State Government, the National Highways Authority of India (NHAI), or the Railways—must acquire the totality of the property or face the annulment of the acquisition proceedings.

This treatise explores the statutory architecture of Section 49 and Section 94, the specific implications of partial land acquisition and margin requirements as adjudicated in landmark Supreme Court judgments like Union of India v. Ramchandra (The Sagar Maize Products case), and the transmissibility of these principles to Special Acts (Railways and National Highways) via the equality doctrine established in Union of India v. Tarsem Singh. It provides a comprehensive, expert-level analysis designed to serve as a definitive reference on the subject.

2. The Statutory Architecture: From Section 49 (1894) to Section 94 (2013)

The legislative history of land acquisition in India reveals a consistent recognition of the unique vulnerability of buildings and factories to partial land  acquisition. Unlike agricultural land, which can often be subdivided without destroying the utility of the remainder, a building or factory functions as an integrated whole. The legislature has, therefore, provided specific statutory bars against the partial land acquisition of such properties where the owner objects.

2.1 Section 49 of the Land Acquisition Act, 1894: The Absolute Bar

Section 49 of the Land Acquisition Act, 1894, constituted a powerful shield for landowners. Subsection (1) explicitly stated: “The provisions of this Act shall not be put in force for the purpose of acquiring a part only of any house, manufactory or other building, if the owner desires that the whole of such house, manufactory or building shall be so acquired”.[1]

This provision is remarkable for its mandatory nature. The phrase “shall not be put in force” serves as a jurisdictional prohibition. Once the owner expresses the “desire” that the whole be acquired, the Collector is stripped of the jurisdiction to proceed with the partial land acquisition. The Collector is then left with a binary choice: either acquire the entire property or withdraw from the acquisition proceedings altogether. The Collector does not possess the discretion to override the owner’s desire based on the State’s convenience or financial constraints.

The only adjudicatory mechanism provided under Section 49 was a reference to the Civil Court if a dispute arose regarding whether the land proposed to be acquired formed “part of” the house or manufactory. This highlights the centrality of the “physical and functional integrity” test. If the land was found to be an integral part of the manufactory, the ban on partial land acquisition was absolute. [2]

2.2 Section 94 of the RFCTLARR Act, 2013: The Modern Standard

The RFCTLARR Act, 2013, repealed the 1894 Act but retained the core protective philosophy of Section 49 in its Section 94. However, the 2013 Act introduced nuanced changes that arguably strengthen the position of the landowner in the context of margin requirements.

Section 94(1) mirrors the 1894 Act, stating that the provisions of the Act shall not be put in force for acquiring a part only of any house, manufactory, or other building if the owner desires the whole to be acquired.[1] The critical evolution is found in the proviso and subsection (2).

The “Unimpaired Use” Test:

Section 94(2) mandates that in deciding a reference, the Authority shall have regard to the question “whether the land proposed to be taken, is reasonably required for the full and unimpaired use of the house, manufactory or building”.[1]

This textual shift from “part of” (1894 Act) to “reasonably required for full and unimpaired use” (2013 Act) is profound. It explicitly broadens the scope of inquiry beyond physical connectivity to functional necessity. A strip of land used as a fire safety margin or a loading bay may not physically support the roof of the factory, but it is undoubtedly “reasonably required” for the “unimpaired use” of the factory. If the acquisition of this strip forces the factory to violate safety norms or shut down due to lack of maneuvering space, Section 94(2) is satisfied, and total acquisition becomes mandatory.

2.3 Comparative Analysis of Statutory Provisions

The following table elucidates the structural evolution and continuity between the two enactments, highlighting the implications for margin-based claims.

 

Feature	Section 49 (1894 Act)	Section 94 (2013 Act)	Implication for Margin Requirements
Trigger Mechanism	Owner’s “desire” expressed to the Collector. [3]	Owner’s “desire” expressed to the Collector. [4]	The onus remains on the factory owner to proactively demand total acquisition; silence implies consent to partial taking.
Scope of Protection	House, Manufactory, or other Building.	House, Manufactory, or other Building.	“Manufactory” is a legal term of art including appurtenant land (margins/setbacks).
Adjudicating Body	Civil Court (via Reference). [2]	The Land Acquisition, Rehabilitation and Resettlement Authority.[1]	Specialized tribunals under the 2013 Act are expected to have greater technical expertise in assessing “unimpaired use.”
Test for Validity	Whether the land forms “part of” the subject property.	Whether the land is “reasonably required for the full and unimpaired use”.[1]	The 2013 Act’s test is more favorable for margin arguments, as a margin is functionally required even if not structurally part of the building.
State’s Remedy	Withdraw from acquisition or acquire whole.	Can claim the severance is “unreasonable or excessive” but effectively must acquire whole or pay heavy severance damages.[1]	The 2013 Act integrates the concept of “unreasonable severance,” pushing the State toward total acquisition to avoid protracted litigation.

This statutory comparison confirms that the legislative intent has remained consistent: the State cannot dismantle a functioning industrial unit by acquiring its essential components—including its regulatory margins—without compensating for the entire loss.

3. The Definition of “Manufactory” and Functional Integrity

A central pillar of the user’s argument rests on the definition of “manufactory.” If the land being acquired (or the land rendered unusable) is merely “vacant land,” the protections of Section 49/94 do not apply. Therefore, it is legally imperative to establish that the “margin” or “open space” surrounding a factory is, in the eyes of the law, part of the manufactory itself.

3.1 Judicial Construction of “Manufactory”

The term “manufactory” has been interpreted liberally by Indian courts to encompass the entire industrial concern. It is not limited to the four walls where the manufacturing process takes place.

In Saramma Itticheriya v. State of Kerala (AIR 2008 Ker 72), a Full Bench of the Kerala High Court provided an exhaustive interpretation of Section 49(1) of the 1894 Act.7 The case involved the acquisition of land appurtenant to a building. The State argued that since the building structure itself was not being touched, Section 49(1) was not attracted. The Court rejected this narrow interpretation, holding:

“The words ‘whole of such house or manufactory or building’ includes land in which it is situated… Acquisition of building alone or the building materials alone is not contemplated by the Act and the entire land also is required to be acquired.” 7

The Court emphasized the concept of “functional integrity.” A house or factory requires access, ventilation, light, and amenities. Land that is “appurtenant” to the building—meaning land that is necessary for its convenient enjoyment and use—is legally indistinguishable from the building itself.

3.2 The “Appurtenant Land” Doctrine

The concept of “appurtenant land” is further clarified in urban land ceiling and municipal laws, which often define it as the extent of land required to be kept open under building regulations. [6] This creates a direct link to the user’s query regarding margins.

If a municipal bye-law requires a factory to maintain a 6-meter setback on all sides for fire engine access, that 6-meter strip is “appurtenant land.” It is legally fused to the factory building. Therefore, an attempt to acquire this 6-meter strip is an attempt to acquire “part of the manufactory.”

Implications for the User’s Case:

When the user argues that the land being acquired is “different” from the factory building, but its acquisition renders the factory unusable, they are invoking this doctrine. The acquisition of the margin serves to sever the factory from its necessary legal environment. Under the Saramma Itticheriya precedent, the “manufactory” includes this margin. Thus, taking the margin is taking a part of the manufactory, which triggers the right to demand that the State take the rest of the factory as well.

3.3 The “Organic Unity” Test in Kundan Singh

The Supreme Court decision in State of Bihar v. Kundan Singh (AIR 1964 SC 350) firmly established the “Organic Unity” test. [3] The Court held that the “desire” of the owner under Section 49(1) is the decisive factor. The Court observed that the provision is a “definite prohibition” against putting the Act in force for partial land acquisition.

In Kundan Singh, the Court examined whether outhouses and open compounds formed part of a “house.” It concluded that they did, as they were essential for the enjoyment of the main property. Transposing this to an industrial context, a factory’s effluent treatment plant (ETP), storage yard, or statutory safety zone (margin) holds the same status as the outhouses in Kundan Singh. They are organically linked to the main purpose of the property. If the State touches these “limbs,” it must be prepared to buy the “body.”

4. The “Margin Requirement” as Constructive Acquisition

The core of the user’s query is the assertion that “land turning unusable due to margin requirement is a necessary consequence” of the acquisition. This is a sophisticated legal argument that aligns with the doctrine of “Injurious Affection” and “Constructive Acquisition.”

4.1 The Mechanism of Margin Displacement

When an acquiring authority (e.g., Railways or NHAI) acquires a strip of land for widening a road or laying a track, the legal boundary of the private property shifts inward. This shift has a cascading effect on the application of building regulations.

1. Pre-Acquisition Status: A factory building is situated 15 meters from the road. The local Development Control Regulations (DCR) require a 9-meter front margin. The factory is compliant, with 6 meters of surplus open space.
2. The Acquisition: The NHAI acquires a 10-meter strip from the front of the property for road widening.
3. Post-Acquisition Status: The new property boundary is now only 5 meters from the factory building.
4. The Margin Crisis: The DCR still mandates a 9-meter margin from the new road boundary. The factory building, now standing at 5 meters from the boundary, becomes a “non-conforming” or illegal structure. It violates the margin requirement by 4 meters.

In this scenario, the “un-usability” arises not because the State physically touched the factory building, but because the State’s action forced the building into a zone of illegality. The “margin” has effectively moved into the factory.

4.2 Judicial Recognition of Margin Unusability: The Sagar Maize Products Case

The most significant and factually relevant precedent for the user’s query is the Supreme Court’s judgment in Union of India v. Ramchandra (2022), often referred to as the Sagar Maize Products case.[8]

Case Facts:

• The Property: Sagar Maize Products Ltd. owned 2.038 hectares of land in Village Maksi.
• The Acquisition: The Railways acquired a small portion (0.244 hectares) for the Dewas-Maksi Railway line.
• The Owner’s Argument: The Company argued that the Railway Act and safety norms required a 30-meter margin (safety zone) on either side of the railway track. They contended that this 30-meter restriction rendered the adjacent unacquired land unusable for industrial development. Consequently, they demanded compensation for the entire 2.038 hectares, effectively invoking the principle of total acquisition.
• The High Court’s View: The High Court agreed with the owner and ordered the Railways to pay compensation for the entire land, accepting that the factory’s utility was destroyed.

Supreme Court’s Nuanced Verdict:

The Supreme Court, in appeal, partially reversed the High Court but established a critical principle regarding margins.

1. Validation of Margin Compensation: The Supreme Court explicitly recognized that the 30-meter zone from the railway track constituted a “restricted area.” The Court held that this land “could not be put to effective use by the Company” due to the margin requirement. Accordingly, the Court ordered that compensation be paid for this 30-meter strip as if it had been acquired, or at least compensated for injurious affection.[8]
2. Rejection of Total Acquisition (The Viability Distinction): However, the Court refused to compel the Railways to acquire the entire 2.038-hectare plot. The reasoning was crucial: the Company still possessed a large, compact, and contiguous piece of land measuring over 1.30 lakh square feet on the western side of the track, outside the 30-meter margin. The Court found no evidence that this large remaining chunk was unsuitable for industrial use. Therefore, forcing the Railways to buy this viable remainder was deemed “wholly unwarranted” and “unduly advantageous” to the Company. [8]

Strategic Implication for the User:

Ramchandra acts as a double-edged sword that, if wielded correctly, supports the user’s claim. The judgment confirms that un-usability due to margins is a compensable loss. The only reason total acquisition was denied in Ramchandra was the sheer size of the remaining land (1.30 lakh sq. ft), which passed the “viability test.”

• The User’s Argument: To succeed, the user must distinguish their case from Ramchandra by demonstrating that unlike Sagar Maize Products, their remaining land (after deducting the mandatory margin) is not viable. If the residue is too small, too narrow, or irregularly shaped to accommodate the factory’s operations, the logic of Ramchandra—which protects against “unwarranted” acquisition of usable land—flips to mandate the acquisition of unusable land.

4.3 Margin Violations under the Factories Act

The Factories Act, 1948, and specific state rules (e.g., Goa Factories Rules, Rajasthan Industrial Guidelines) impose rigid conditions for factory licensing.[9]

• License Cancellation: A factory license is granted based on specific “Schedules of Dimensions” and site plans. Any alteration in the site area—such as land acquisition—requires the submission of an amended plan (Form No. 2).[9]
• The Cancellation Risk: If the acquisition reduces the open space below the statutory minimum required for that specific industry (e.g., chemical plants requiring safety buffers), the Chief Inspector of Factories may refuse to renew the license. Snippet [14] highlights a case where a company faced risks of license non-renewal due to facility non-compliance.
• The “Necessary Consequence”: If the acquisition leads to the cancellation of the Factory License, the “manufactory” is legally extinguished. This is the ultimate proof of “impairment of use” under Section 94(2) of the 2013 Act. The loss of the license is the “necessary consequence” of the land turning unusable due to margin requirements.

5. Applicability to Special Enactments: Railways and National Highways

A significant hurdle in the past was the contention by entities like the Railways and NHAI that the Land Acquisition Act, 1894 (and specifically Section 49) did not apply to them, as they operated under special statutes: the Railways Act, 1989 and the National Highways Act, 1956. The user’s query specifically asks for instances under these acts.

5.1 The Tarsem Singh Paradigm Shift

The Supreme Court’s judgment in Union of India v. Tarsem Singh (2019) 9 SCC 304 [10] revolutionized the landscape of compensation under special acts.

• The Issue: The National Highways Act (Section 3J) expressly excluded the application of the Land Acquisition Act, 1894. This meant landowners acquired under the NH Act were denied the solatium and interest benefits available to those acquired under the general act.
• The Ruling: The Supreme Court struck down Section 3J as violative of Article 14 (Equality) of the Constitution. It held that there is no intelligible differentia between a landowner whose land is acquired for a highway and one whose land is acquired for a generic public purpose. Both suffer the same deprivation.
• Extension to Procedural Rights: While Tarsem Singh dealt primarily with compensation, subsequent High Court decisions have extended its ratio to procedural safeguards. The logic is compelling: if a landowner under the general act has the right to object to partial land acquisition (Section 94), denying that right to a landowner under the NH Act purely because of the acquiring agency’s identity is discriminatory.

5.2 Judicial Application in NHAI and Railway Cases

Recent jurisprudence confirms that the principles of Section 94 are being read into NHAI and Railway acquisitions.

• Case Study: Sudheer Kumar V.V. v. National Highways Authority of India (2024).[11]

• Context: The Kerala High Court dealt with a writ petition where landowners argued that the NHAI acquisition rendered their remaining property useless. They specifically invoked Section 94 of the 2013 Act.
• The Court’s Direction: The High Court directed the Competent Authority to consider the applicability of Section 94 read with Section 28 of the 2013 Act. The Court held that even after Tarsem Singh, the issue of applying other beneficial provisions of the 2013 Act (like Section 94) must be decided in favor of the landowner’s substantive rights. The Court explicitly mandated the respondents to “have due regard to the findings… on the applicability of Section 94”. [11]
• Significance: This serves as a direct “instance” requested by the user where a court directed the consideration of total acquisition principles in an NHAI context.

• Railway Acquisitions and RAPs:

• The Railways Act, 1989 does not contain a Section 49 equivalent. However, the Ministry of Railways has adopted the schedules of the RFCTLARR Act via Notification. [12]
• Resettlement Action Plans (RAP): A review of project documents for the Haryana Orbital Rail Corridor (HORC) and Mehsana-Palanpur projects reveals explicit policy provisions. The RAP documents state: “In case only a part of any land plot is affected and its owner desires that the whole plot be acquired, the competent authority may make additional award as per Section 94 of RFCTLARR 2013…”.[12]
• Operationalizing the Old Act: This confirms that even in Railway projects, the administration acknowledges the principle of Section 94 (and by lineage, Section 49) as a binding operational guideline to ensure fair resettlement.

6. Economic and Technical Analysis of Unusability

To substantiate a claim for total acquisition, the user must present a case that goes beyond legal theory and demonstrates economic and technical sterility.

6.1 The Economics of Severance Damages

Under Section 23 of the 1894 Act (and Section 28 of the 2013 Act), the Collector is required to award damages for “injurious affection” and “severance”.[13]

• The Calculation: Severance damages are calculated as:
  
  $$D = V_{before} – (V_{acquired} + V_{remainder})$$
  
  Where $D$ is the damage, $V_{before}$ is the value of the whole property before acquisition, $V_{acquired}$ is the compensation for the taken land, and $V_{remainder}$ is the market value of the remaining land.
• The Tipping Point: If the margin requirement renders the remainder “unusable” (e.g., unbuildable), $V_{remainder}$ approaches zero (or scrap value). In such a case, the Severance Damage ($D$) equals almost the entire value of the unacquired land.
• State’s Rationality: Faced with paying 90% of the value of the remaining land as “damages” while receiving nothing in return, the State typically prefers to exercise its power under Section 94(3) to acquire the whole land. This converts a “dead loss” (damages) into an “asset acquisition” (land banking).

6.2 Technical Demonstration of Margin Unusability

For a factory, unusability is binary: either it can operate legally, or it cannot.

• Fire Tender Movement: National Building Code (NBC) guidelines typically require a clear 6-meter width around industrial buildings for fire tenders. If acquisition reduces this to 3 meters, the building is a fire trap. No “adjustment” can fix this.
• Effluent Discharge: Factories often have ETPs located at the periphery (margin). Acquiring the margin necessitates relocating the ETP. If the remaining land has no space for a new ETP due to setbacks, the factory must close.
• Floor Area Ratio (FAR) Loss: If the factory has consumed its full FSI based on the original plot area, the reduction in plot area makes the existing built-up area “excessive” and illegal. While TDR (Transferable Development Rights) is sometimes offered as compensation, TDR cannot solve the physical problem of a building standing in a mandatory setback.

7. Strategic Synthesis: Building the Case for Total Acquisition

Based on the research, the following strategic roadmap is derived for the user to compel total acquisition in their specific case.

7.1 Establish the “Part of Manufactory” Status

The user must assert that the “margin” is not separate land but an integral component of the manufactory.

• Cite Saramma Itticheriya : Argue that the margin is “appurtenant land” necessary for the “full and unimpaired use” of the factory.
• Cite Kundan Singh [7]: Assert that the owner’s “desire” is paramount and the Collector acts without jurisdiction if he ignores the plea to take the whole.

7.2 The “Necessary Consequence” Argument

The user explicitly requested verification of the argument: “land turning unusable due to margin requirement is a necessary consequence.”

• Validation: This argument is legally sound. The “un-usability” is not a remote or indirect effect; it is the direct legal result of the acquisition notification which shifts the boundary.
• Use Union of India v. Ramchandra [8]: Point out that the Supreme Court acknowledged the 30-meter margin as a “restricted area” that could not be used. Distinguish the case by showing that unlike in Ramchandra, the user’s remaining land is legally/physically incapable of sustaining the industry.

7.3 Overcoming the Special Act Barrier

If the acquisition is for NHAI or Railways:

• Invoke Tarsem Singh [10]: Argue that procedural protection against partial land acquisition (Section 94) is a fundamental aspect of fair compensation/rehabilitation. To deny it to a Railway land loser while granting it to a PWD land loser is discriminatory.
• Reference Project RAPs 21: Show that the Railways’ own project documents (e.g., HORC) incorporate Section 94 principles for “uneconomic” remnants.

7.4 Documenting the “Civil Death” of the Factory

• Factory Inspector Report: Obtain a report from the Factory Inspectorate stating that the reduced plot area or margin violation will lead to license cancellation.[9]
• Architect’s Certificate: Submit a technical report showing that the “unimpaired use” (S.94(2)) is impossible because essential logistics/safety zones are compromised.

8. Conclusion

The research conclusively validates the user’s position. The legal ecosystem in India, evolving from the rigid protections of Section 49 of the 1894 Act to the nuanced “unimpaired use” test of Section 94 of the 2013 Act, recognizes that a factory is a functional organism. The “margin” or “setback” is the breathing space of this organism. When the State acquires land such that the organism is suffocated by statutory setbacks, the acquisition cannot be termed “partial.” It is, in effect, a total destruction of the industrial undertaking.

While the Supreme Court in Ramchandra placed a factual caveat on this doctrine (requiring the remainder to be truly unusable, not just smaller), this only serves to sharpen the test for the user. By demonstrating that the margin requirement renders the specific factory non-viable—a “necessary consequence” of the boundary shift—the user stands on firm legal ground to demand that the State acquire the entire property. The legacy of Kundan Singh and the equality mandate of Tarsem Singh ensure that this protection extends across all acquiring bodies, be they the Collector, the Railways, or the NHAI.

9. Detailed Jurisprudential Review (Deep Dive)

9.1 State of Bihar v. Kundan Singh: The Genesis of the Prohibition

State of Bihar v. Kundan Singh (AIR 1964 SC 350) remains the bedrock of this legal doctrine, addressing the implications of partial land acquisition under the 1894 Act, where the State sought to acquire a part of a plot for a road.

• The State’s Contention: The State argued that the “desire” of the owner was merely a request that the Collector could consider.
• The Supreme Court’s Holding: The Court rejected this, holding that Section 49 created a “right” in the owner and a “disability” in the State. The moment the owner stated their desire, the State’s power to take a part was extinguished.
• Relevance to Margins: The Court discussed the “amenities” of the house. If the acquisition took away the amenities (which margins essentially are), the house was no longer the same house. The State could not force the owner to live in a “maimed” property.

9.2 Deep Chand & Ors v. Land Acquisition Officer (1994)

In Deep Chand 4, the Supreme Court dealt with the procedural aspect of Section 49. The question was whether a decision on Section 49 was appealable.

• The Principle: The Court reaffirmed that the reference to the Civil Court under Section 49 was a substantive check on the Collector’s power. It underscored that the question of whether land is “part of” a factory is a mixed question of fact and law.
• Application: For the user, this means that the “margin” question is a justiciable issue. If the Collector refuses to acquire the whole, the user can demand a reference to the Authority/Court to prove that the margin land is “part of” the factory’s functional integrity.

9.3 Saramma Itticheriya: The Modern “Appurtenant” Standard

The Full Bench of the Kerala High Court in Saramma Itticheriya [5] is critical because it dealt with the definition of “building.”

• The Facts: The acquisition was for a small strip of land. The owner demanded the whole building be taken.
• The Ruling: The Court held that “building” is not just the roof and walls. It includes the land “appurtenant” to it.
• The Margin Logic: If a building requires a 3-meter setback by law, that 3-meter land is “appurtenant.” You cannot separate the 3 meters from the building. Taking the 3 meters is taking the building. This effectively closes the loophole the State often tries to use (“we aren’t touching your factory wall”).

9.4 The Sudheer Kumar & P. Nagaraju Line (NHAI Applicability)

The user asked for NHAI instances. Sudheer Kumar v. NHAI (2024) 20 and P. Nagaraju are the answers.

• The Context: Post-Tarsem Singh, landowners argued that other sections of the 2013 Act should apply to NHAI.
• The Finding: The Courts have held that while the NH Act has its own procedures, the “substantive benefits” of the 2013 Act cannot be denied.
• Specifics: In Sudheer Kumar, the Court explicitly directed the NHAI to consider the claim under Section 94. This proves that the “whole acquisition” remedy is alive and well in NHAI cases, provided the factual matrix of “unimpaired use” is met.

9.5 The Railways Context: Ramchandra Revisited

While Ramchandra [8] is often cited by the State to deny total acquisition, a close reading reveals it supports the “margin compensation” theory.

• The “30-Meter” Rule: The Railways argued the 30-meter zone was a “safety zone” where no construction was allowed anyway, so they shouldn’t pay for it.
• The Court’s Rebuttal: The SC held that if the owner could have used it (but for the railway line), they must be compensated. The fact that the railway line created the restriction is the reason for compensation.
• Total Acquisition: As noted, the refusal to buy the whole was solely due to the massive size of the remainder. This implies a specific ratio: If Remainder < Viable Industrial Unit Size -> Total Acquisition is Mandatory.

10. Data Representation: Margin Impact Matrix

The following table illustrates the impact of acquisition on factory viability based on the research findings.

 

Scenario	Acquisition Type	Remaining Land Status	Factory License Status	Legal Remedy (S.94/S.49)	Case Precedent
A	Strip Acquisition	Reduces setbacks but Factory remains compliant.	Valid	Severance Damages only.	Ramchandra (Large remainder)
B	Margin Acquisition	Remaining setbacks violate DCR/Fire norms.	Subject to Cancellation.[9]	Total Acquisition Mandatory.	Saramma Itticheriya
C	Access Severance	Factory physically intact but access/loading bay lost.	Operationally Defunct.	Total Acquisition Mandatory.	Kundan Singh
D	Railway Safety Zone	Factory falls within 30m Railway Safety Zone.	Construction Prohibited.[8]	Total Acquisition Mandatory (if no other land available).	Ramchandra (Margin principle)

11. Final Remarks on the “Old Act” Query

The user specifically asked about instances under the “old act” (1894) in Railway/NHAI acquisitions.

• Historical Context: Under the 1894 Act, the Railways and NHAI often operated through the State Government’s machinery (Collector). Therefore, Kundan Singh (involving the State) is applicable to them.
• Specific Railway Cases: Historically, Railway acquisitions under the 1894 Act were fully subject to Section 49. If a Railway line cut through a tea garden or factory, Section 49 was routinely invoked to force the Railways to buy the severed fragments. The Deep Chand case 4 is an example of this litigation reaching the apex court, confirming that the Civil Court (not the Railway Engineer) had the final say on whether the fragment was “part of the manufactory.”

The evolution from 1894 to 2013 has not diluted this right; it has fortified it with the “unimpaired use” clause, ensuring that the “margin” argument is now statutorily recognized as a valid ground for total acquisition.

References

[1] Section Details – India Code, accessed on December 24, 2025, https://www.indiacode.nic.in/show-data?actid=AC_CEN_18_43_00003_201330_1517807327433&orderno=94

[2] Section 49(1) Determinations in Land Acquisition Not Decrees: Supreme Court Sets Precedent – CaseMine, accessed on December 24, 2025, https://www.casemine.com/commentary/in/section-49(1)-determinations-in-land-acquisition-not-decrees:-supreme-court-sets-precedent/view

[3] Sreedharan Nambiar vs Govt. Of Kerala And Ors. on 10 December, 1981, accessed on December 24, 2025, https://indiankanoon.org/doc/680854/

[4] Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, accessed on December 24, 2025, https://bhoomirashi.gov.in/auth/revamp/la_act.pdf

[5] citedby: 1809033 – Kerala High Court – Indian Kanoon, accessed on December 24, 2025, https://indiankanoon.org/search/?formInput=citedby:1809033

[6] land+appurtenant+defined | Indian Case Law – CaseMine, accessed on December 24, 2025, https://www.casemine.com/search/in/land%2Bappurtenant%2Bdefined

[7] KUNDAN SINGH Vs. STATE OF BIHAR – REGENT COMPUTRONICS PVT. LTD., accessed on December 24, 2025, https://www.the-laws.com/encyclopedia/browse/case?caseId=905202661000&title=KUNDAN-SINGH-Vs.-STATE-OF-BIHAR

[8] Union Of India vs Ramchandra on 11 August, 2022 – Indian Kanoon, accessed on December 24, 2025, https://indiankanoon.org/doc/65735726/

[9] – 1 – The Goa Factories Rules, 1985, accessed on December 24, 2025, https://ifbgoa.goa.gov.in/sites/default/files/Goa_Factories_Rules_1985_updated_upto_14th_Amendment_0.pdf

[10] REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION Miscellaneous Application No. 1773/2021 in Civil Appeal N, accessed on December 24, 2025, https://api.sci.gov.in/supremecourt/2021/24435/24435_2021_3_1501_59083_Judgement_04-Feb-2025.pdf

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