LEGAL ISSUE: Interpretation of Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
CASE TYPE: Land Acquisition
Case Name: Indore Development Authority vs. Manohar Lal & Ors.
Judgment Date: 23 October 2019
Introduction
Date of the Judgment: 23 October 2019
The Supreme Court of India, in a significant judgment, addressed the interpretation of Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (the Act of 2013). This case arose from a series of appeals and special leave petitions, questioning the correctness of previous interpretations of the said section. The core issue revolved around whether the term “paid” in Section 24(2) of the Act of 2013 has the same meaning as “tender of payment” in Section 31(1) of the Land Acquisition Act, 1894, and whether non-deposit of compensation in court under Section 31(2) of the 1894 Act results in a lapse of acquisition under Section 24(2) of the 2013 Act.
The bench was composed of Justices Arun Mishra, Indira Banerjee, Vineet Saran, M.R. Shah, and S. Ravindra Bhat. The majority opinion was authored by Justice Arun Mishra, with separate concurring opinions from Justices Indira Banerjee, Vineet Saran, M.R. Shah, and S. Ravindra Bhat.
Case Background
The case originated from multiple appeals and special leave petitions that were clubbed together due to the common legal questions they raised. The primary dispute concerned the interpretation of Section 24 of the 2013 Act, particularly regarding whether the acquisition of land lapses if compensation is not deposited in court, even if it has been offered to the landowner. The Indore Development Authority was a key petitioner in many of these cases, while various landowners were the respondents.
The central issue stemmed from differing interpretations of Section 24(2) of the 2013 Act, which stipulates that if physical possession of the land has not been taken or compensation has not been paid within five years of the commencement of the Act, the acquisition proceedings shall lapse. The landowners argued that the term “paid” should be interpreted to mean that the compensation must be deposited in court, as per Section 31(2) of the 1894 Act, while the acquiring authorities contended that an offer of payment or “tender of payment” is sufficient to meet the requirements of Section 24(2) of the 2013 Act.
Timeline
| Date | Event |
|---|---|
| 2013 | The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 came into force. |
| 2014 | The Supreme Court delivered a judgment in Pune Municipal Corporation & Anr. v. Harakchand Misirimal Solanki & Ors. interpreting Section 24 of the Act of 2013. |
| 2015 | Sree Balaji Nagar Residential Assn. v. State of Tamil Nadu was decided. |
| 2016 | A two-judge bench in Yogesh Neema & Ors. v. State of Madhya Pradesh doubted the decision in Sree Balaji Nagar and referred the matter to a larger bench. |
| 7 December 2017 | In Indore Development Authority vs. Shailendra, the matter was referred to a larger bench. |
| 21 February 2018 | A three-judge bench requested other benches to defer hearings on the issue of Section 24. |
| 22 February 2018 | A Division Bench in Indore Development Authority v. Shyam Verma and Ors. referred the matter to the Chief Justice of India to resolve the issues by a larger bench. |
| 22 February 2018 | A bench in State of Haryana v. Maharana Pratap Charitable Trust referred the matter to the Chief Justice of India to constitute an appropriate bench. |
| 6 March 2018 | The case was listed before a five-judge Constitution Bench. |
| 23 October 2019 | The five-judge Constitution Bench delivered its judgment in Indore Development Authority vs. Manohar Lal & Ors. |
Course of Proceedings
The interpretation of Section 24 of the 2013 Act has been a subject of debate and differing opinions within the judiciary. Initially, a three-judge bench in Pune Municipal Corporation & Anr. v. Harakchand Misirimal Solanki & Ors. (2014) interpreted Section 24. However, a two-judge bench in Yogesh Neema & Ors. v. State of Madhya Pradesh (2016) expressed doubts about the correctness of the decision in Sree Balaji Nagar Residential Assn. v. State of Tamil Nadu (2015), leading to a reference to a larger bench.
Subsequently, in Indore Development Authority vs. Shailendra (Dead) through Lrs. & Ors. (2018), the matter was again referred to a larger bench due to inconsistencies and several unconsidered aspects in the Pune Municipal Corporation judgment. A three-judge bench in Indore Development Authority vs. Shailendra (Dead) through Lrs. & Ors. (2018) unanimously accepted that the Pune Municipal Corporation case did not consider several aspects of Section 24 of the Act of 2013. However, due to the judgment being by a bench of coordinate strength, two judges opined that it was per incuriam, while one judge suggested a reference to a larger bench.
Several other benches also referred the matter to the Hon’ble Chief Justice of India, leading to the constitution of a five-judge Constitution Bench to resolve the issues.
Legal Framework
The core legal provisions at the heart of this case are:
- Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013: This section deals with the lapse of land acquisition proceedings. Specifically, Section 24(2) states that if physical possession of the land has not been taken or compensation has not been paid within five years of the commencement of the Act, the acquisition proceedings shall lapse.
“24. Land acquisition process under Act No. 1 of 1894 shall be deemed to have lapsed in certain cases.
(2) Notwithstanding anything contained in sub-section (1), in case of land acquisition proceedings initiated under the Land Acquisition Act, 1894 (1 of 1894), where an award under the said Act has been made five years or more prior to the commencement of this Act but the physical possession of the land has not been taken or the compensation has not been paid the said proceedings shall be deemed to have lapsed and the appropriate Government, if it so chooses, shall initiate the proceedings of such land acquisition afresh in accordance with the provisions of this Act” - Section 31 of the Land Acquisition Act, 1894: This section outlines the procedure for payment of compensation. Section 31(1) states that the Collector shall tender payment of compensation to the persons interested. Section 31(2) deals with the deposit of compensation in court when the persons interested refuse to accept it or if there are disputes regarding the compensation.
“31. Payment of compensation or deposit of same in Court.
(1) On making an award under section 11, the Collector shall tender payment of the compensation awarded by him to the persons interested entitled thereto according to the award, and shall pay it to them unless prevented by some one or more of the contingencies mentioned in the next sub-section.
(2) If the persons interested entitled to compensation do not consent to receive it, or if there be no person competent to alienate the land, or if there be any dispute as to the title to receive the compensation or as to the apportionment of it, the Collector shall deposit the amount of the compensation in the Court to which a reference under section 18 would be submitted”
The core of the dispute lies in the interpretation of the word “paid” in Section 24(2) of the 2013 Act. The landowners argued that “paid” means actual deposit of compensation in court as per Section 31(2) of the 1894 Act, while the authorities contended that “paid” includes “tender of payment” as per Section 31(1) of the 1894 Act, even if the landowners refuse to accept it.
Arguments
The arguments presented before the Supreme Court can be summarized as follows:
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Landowners’ Arguments:
- The landowners contended that the term “paid” in Section 24(2) of the 2013 Act should be interpreted strictly to mean that the compensation amount should not only be offered but also deposited in the court as per Section 31(2) of the Land Acquisition Act, 1894.
- They argued that mere tender of payment is not sufficient to fulfill the requirement of “paid” under Section 24(2).
- They relied on previous judgments to support their claim that non-deposit of compensation in court leads to a lapse of acquisition proceedings.
- They argued that the intention of the 2013 Act was to protect the landowners, and a liberal interpretation of “paid” in their favor is necessary.
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Acquiring Authorities’ Arguments:
- The acquiring authorities argued that “paid” in Section 24(2) of the 2013 Act is equivalent to “tender of payment” as mentioned in Section 31(1) of the Land Acquisition Act, 1894.
- They contended that once the compensation amount is unconditionally offered to the landowners, the obligation under Section 24(2) is fulfilled, even if the landowners refuse to accept it.
- They argued that the requirement of depositing compensation in court under Section 31(2) of the 1894 Act is only triggered when the landowners refuse the payment or there are disputes regarding the title or apportionment of the compensation.
- They submitted that the landowners cannot take advantage of their own wrong by refusing to accept the compensation and then claiming that the acquisition has lapsed due to non-deposit in court.
- They relied on the principle of actus curiae neminem gravabit, stating that the landowners should not benefit from delays caused by their own actions or by court orders.
The arguments were complex, involving interpretations of various legal provisions and their interplay, as well as the intent behind the 2013 Act.
| Main Submissions | Sub-Submissions (Landowners) | Sub-Submissions (Acquiring Authorities) |
|---|---|---|
| Interpretation of “Paid” in Section 24(2) of the 2013 Act |
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| Effect of Non-Deposit of Compensation |
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| Applicability of Section 31(2) of the 1894 Act |
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| Principle of Actus Curiae Neminem Gravabit |
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There was no specific innovativeness in the arguments by either side, as both sides relied on established legal principles and interpretations.
Issues Framed by the Supreme Court
The Supreme Court framed the following key issues for adjudication:
- Whether the word “paid” in Section 24 of the Act of 2013 has the same meaning as “tender of payment” in Section 31(1) of the Act of 1894.
- What is the normal mode of taking physical possession under the land acquisition cases?
- Whether the provisions of Section 24 of the Act of 2013 revive barred or stale claims?
- Whether the provisions of Section 24(2) intend to cover the period spent during litigation and when the authorities have been disabled to act under Section 24(2) due to the final or interim order of a court or otherwise?
- Whether the principle of actus curiae neminem gravabit is applicable for determining the questions under Section 24 of the Act of 2013?
Treatment of the Issue by the Court
The following table demonstrates as to how the Court decided the issues
| Issue | Court’s Decision | Brief Reason |
|---|---|---|
| Meaning of “paid” in Section 24 of the 2013 Act | “Paid” has the same meaning as “tender of payment” in Section 31(1) of the 1894 Act. | The words “paid” and “deposited” are different expressions with different meanings. Non-deposit in court does not result in a lapse of acquisition. |
| Mode of taking physical possession | Drawing of Panchnama is the normal mode of taking physical possession. | This is the established practice in land acquisition cases. |
| Revival of barred or stale claims | Section 24 of the 2013 Act does not revive barred or stale claims. | Such claims cannot be entertained. |
| Exclusion of litigation period | The period spent during litigation or when authorities are disabled by court orders has to be excluded from the five-year period in Section 24(2). | There was no conscious omission in Section 24(2) for exclusion of interim order period. |
| Applicability of actus curiae neminem gravabit | The principle of actus curiae neminem gravabit is applicable. | The period covered by final/interim orders depriving authorities of taking possession has to be excluded. |
Authorities
The Supreme Court considered the following authorities:
| Authority | Court | Legal Point | How Considered |
|---|---|---|---|
| Pune Municipal Corporation & Anr. v. Harakchand Misirimal Solanki & Ors. (2014) 3 SCC 183 | Supreme Court of India | Interpretation of Section 24 of the 2013 Act | Overruled on certain aspects |
| Yogesh Neema & Ors. v. State of Madhya Pradesh (2016) 6 SCC 387 | Supreme Court of India | Doubted the decision in Sree Balaji Nagar | Referred to a larger bench |
| Sree Balaji Nagar Residential Assn. v. State of Tamil Nadu (2015) 3 SCC 353 | Supreme Court of India | Interpretation of Section 24 of the 2013 Act | Doubted by Yogesh Neema |
| Indore Development Authority vs. Shailendra (Dead) through Lrs. & Ors. 2018 SCC Online SC 100 | Supreme Court of India | Reference to a larger bench on the applicability of Section 24 | Matter referred to larger bench |
| State of Bombay v. United Motors India Ltd. 1953 SCR 1069 | Supreme Court of India | Sales tax on inter-state sales | Referred to for historical context |
| Bengal Immunity Co. Ltd. v. State of Bihar 1955 (2) SCR 603 | Supreme Court of India | Sales tax on inter-state sales | Referred to for historical context and overruling of previous view |
| M/s. Ujagar Prints and Ors. (II) v. Union of India & Ors. (1989) 3 SCC 488 | Supreme Court of India | Correctness of decision in Empire Industries Ltd. v. Union of India | Referred to for practice of larger bench including a judge from smaller bench |
| Empire Industries Ltd. v. Union of India (1985) 3 SCC 314 | Supreme Court of India | Intercorporate dividends | Referred to for practice of larger bench including a judge from smaller bench |
| Gyan Devi Anand v. Jeevan Kumar & Ors. (1985) 2 SCC 683 | Supreme Court of India | Heritability of statutory tenancy | Referred to for practice of larger bench including a judge from smaller bench and overruling of previous view |
| Ganpat Ladha v. Sashikant Vishnu Shinde (1978) 2 SCC 573 | Supreme Court of India | Heritability of statutory tenancy | Overruled by Gyan Devi Anand |
| Damadilal v. Parashram (1976) 4 SCC 855 | Supreme Court of India | Status of tenant after termination of tenancy | Affirmed in Gyan Devi Anand |
| Kesavananda Bharati v. State of Kerala (1973) 4 SCC 225 | Supreme Court of India | Basic structure doctrine | Referred to for overruling of previous view |
| Sajjan Singh v. State of Rajasthan 1965 AIR SC 845 | Supreme Court of India | Power to amend the Constitution | Overruled by Kesavananda Bharati |
| Hyderabad Industries Limited and Anr. v. Union of India & Ors. (1995) 5 SCC 338 | Supreme Court of India | Correctness of view in Khandelwal Metal & Engineering Works | Referred to for practice of larger bench including a judge from smaller bench |
| Khandelwal Metal & Engineering Works v. Union of India (1985) 3 SCC 620 | Supreme Court of India | Excise duty | Overruled on certain grounds |
| M/s. Cloth Traders (P) Ltd. v. Additional C.I.T., Gujarat-I (1979) 3 SCC 538 | Supreme Court of India | Inter-corporate dividends | Overruled in Distributors (Baroda) Pvt. Ltd. v. Union of India |
| Distributors (Baroda) Pvt. Ltd. v. Union of India & Ors. (1986) 1 SCC 43 | Supreme Court of India | Inter-corporate dividends | Overruled M/s. Cloth Traders (P) Ltd. v. Additional C.I.T., Gujarat-I |
| Petlad Turkey Red Dye Works Co. Ltd. v. Commissioner of Income Tax, Bombay North, Ahmedabad (1963) Supp 1 SCR 871 | Supreme Court of India | Income Tax | Referred to for practice of larger bench including a judge from smaller bench |
| Keshav Mills Co. Ltd. v. Commissioner of Income Tax, Bombay North, Ahmedabad (1965) 2 SCR 908 | Supreme Court of India | Income Tax | Referred to for practice of larger bench including a judge from smaller bench |
| Jamal Uddin Ahmad v. Abu Saleh Najmuddin (2003) 4 SCC 257 | Supreme Court of India | Election petition procedures | Referred to for practice of the court is the law of the court |
| John Patrick Liteky v. United States 510 U.S. 540 (1994) | Supreme Court of the United States | Recusal based on “extrajudicial source” doctrine | Referred to for recusal principles |
| State of W.B. v. Shivananda Pathak (1998) 5 SCC 513 | Supreme Court of India | Bias and prejudging questions of law | Referred to for recusal principles |
| Asok Pande v. Supreme Court of India (2018) 5 SCC 341 | Supreme Court of India | Allocation of work and roster of Benches | Referred to for the role of Chief Justice |
| Campaign for Judicial Accountability and Reforms v. Union of India (2018) 1 SCC 196 | Supreme Court of India | Jurisdiction and authority of the Chief Justice | Referred to for the role of Chief Justice |
| State of Rajasthan v. Prakash Chand (1998) 1 SCC 1 | Supreme Court of India | Jurisdiction and authority of the Chief Justice | Referred to for the role of Chief Justice |
| Supreme Court Advocates-on-Record Association & Anr. v. Union of India (recusal matter) (2016) 5 SCC 808 | Supreme Court of India | Principles of recusal | Referred to for principles of recusal |
| Hyderabad Industries Ltd. & Anr. v. Union of India & Ors. (1999) 5 SCC 15 | Supreme Court of India | Excise duty | Referred to for practice of larger bench including a judge from smaller bench |
| Subrata Roy Sahara v. Union of India & Ors. (2014) 8 SCC 470 | Supreme Court of India | Recusal and correction of mistakes | Referred to for recusal principles |
| R.K. Anand v. Delhi High Court (2009) 8 SCC 106 | Supreme Court of India | Recusal and forum shopping | Referred to for recusal principles |
| Kamini Jaiswal v. Union of India & Anr. (2018) 1 SCC 156 | Supreme Court of India | Forum hunting and recusal | Referred to for recusal principles |
| All India Institute of Medical Sciences v. Prof. Kaushal K. Verma (2015) 220 DLT 446 | High Court of Delhi | Recusal and judicial fallibility | Referred to for recusal principles |
| Bal Kishan Giri v. State of Uttar Pradesh (2014) 7 SCC 280 | Supreme Court of India | Derogatory remarks and efforts to destroy the system | Referred to for the importance of judicial independence |
| Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 | Indian Parliament | Lapse of land acquisition proceedings | Core provision under consideration |
| Section 31 of the Land Acquisition Act, 1894 | Indian Parliament | Payment of compensation or deposit in court | Core provision under consideration |
Judgment
The Supreme Court, after considering the arguments and authorities, delivered its judgment, clarifying several aspects of Section 24 of the 2013 Act.
| Submission by Parties | How the Court Treated the Submission |
|---|---|
| Landowners: “Paid” means deposit in court. | Rejected. The Court held that “paid” means “tender of payment” and deposit in court is not mandatory for compliance with Section 24(2). |
| Landowners: Non-deposit of compensation leads to lapse. | Rejected. The Court held that non-deposit does not lead to lapse if payment was offered and refused. |
| Acquiring Authorities: “Paid” is equal to “tender of payment.” | Accepted. The Court held that once the compensation is unconditionally tendered, the obligation under Section 24(2) is fulfilled. |
| Acquiring Authorities: Landowners cannot benefit from their refusal. | Accepted. The Court held that landowners cannot take advantage of their own wrong by refusing compensation and then claiming lapse of acquisition. |
| Acquiring Authorities: Exclusion of litigation period. | Accepted. The Court held that the period during litigation or when the authorities were restrained by a court order should be excluded from the five-year period under Section 24(2). |
The Court also analyzed the authorities and precedents cited by both sides.
- Pune Municipal Corporation & Anr. v. Harakchand Misirimal Solanki & Ors. (2014): The Supreme Court held that this judgment did not consider several aspects of Section 24 of the 2013 Act and was per incuriam on certain aspects.
- Other Authorities: The Court relied on several other authorities to establish the practice of larger benches including judges from smaller benches, and for the principles of recusal and judicial independence.
The Court emphasized that the word “paid” in Section 24(2) of the 2013 Act has the same meaning as “tender of payment” in Section 31(1) of the 1894 Act. The Court clarified that non-deposit of compensation in court under Section 31(2) of the 1894 Act does not result in a lapse of acquisition under Section 24(2) of the 2013 Act.
What weighed in the mind of the Court?
The Supreme Court’s decision was influenced by a combination of factors, with a strong emphasis on the practical implications of the interpretation of Section 24 of the 2013 Act. The Court sought to balance the rights of landowners with the need for efficient land acquisition for public purposes.
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Key factors that weighed in the mind of the Court include:
- Practicality and Efficiency: The Court recognized that requiring a deposit of compensation in court for every land acquisition case, even when the landowner refuses to accept it, would be impractical and would unduly delay public projects. The Court aimed to ensure that land acquisition processes are not unnecessarily hampered by technicalities.
- Interpretation of “Paid”: The Court’s interpretation of “paid” as equivalent to “tender of payment” was driven by the need to give effect to the legislative intent of the 2013 Act. The Court reasoned that once compensation is offered unconditionally, the acquiring authority has fulfilled its obligation under Section 24(2), even if the landowner refuses to accept it.
- Prevention of Abuse: The Court sought to prevent landowners from taking advantage of their own wrong. The Court reasoned that landowners should not be able to refuse compensation and then claim that the acquisition has lapsed due to non-deposit in court.
- Exclusion of Litigation Period: The Court’s decision to exclude the period spent during litigation or when authorities are restrained by court orders from the five-year period under Section 24(2) was aimed at ensuring that the authorities are not penalized for delays caused by the judicial process.
- Principle of Actus Curiae Neminem Gravabit: The Court applied the principle of actus curiae neminem gravabit to ensure that no party is prejudiced by the actions of the court. The Court held that the period during which the authorities were restrained by court orders should not be counted towards the five-year period.
Decision Making Flowchart
Impact of the Judgment
The Supreme Court’s judgment in Indore Development Authority vs. Manohar Lal & Ors. has had a significant impact on land acquisition law and practice in India. The judgment has clarified the interpretation of Section 24 of the 2013 Act, which had been a subject of much debate and conflicting interpretations.
The key impacts of the judgment include:
- Clarity on “Paid”: The judgment has clarified that the term “paid” in Section 24(2) of the 2013 Act is equivalent to “tender of payment” as mentioned in Section 31(1) of the 1894 Act. This has provided much-needed clarity to acquiring authorities and landowners, reducing ambiguity and potential disputes.
- Reduced Lapses of Acquisition: The judgment has reduced the possibility of land acquisition proceedings lapsing due to technicalities. By holding that non-deposit of compensation in court does not result in a lapse if payment was offered, the Court has ensured that public projects are not unduly delayed.
- Protection of Authorities: The judgment has protected acquiring authorities from being penalized for delays caused by litigation or court orders. By excluding the period of litigation or court restraint from the five-year period under Section 24(2), the Court has ensured that authorities are not unfairly disadvantaged.
- Balance of Interests: The judgment has sought to balance the interests of landowners and acquiring authorities. While protecting landowners’ rights to fair compensation, the Court has also ensured that land acquisition for public purposes is not unduly hampered.
- Consistency in Interpretation: The judgment has brought consistency in the interpretation of Section 24 of the 2013 Act. By overruling certain aspects of the Pune Municipal Corporation judgment, the Court has ensured that there is a uniform and consistent approach to the application of Section 24.
The judgment has been widely cited and followed in subsequent cases, establishing a clear legal position on the interpretation of Section 24 of the 2013 Act. It has also highlighted the importance of a pragmatic and balanced approach to land acquisition law, ensuring that the interests of all stakeholders are duly considered.
Conclusion
The Supreme Court’s judgment in Indore Development Authority vs. Manohar Lal & Ors. is a landmark decision in the realm of land acquisition law in India. The judgment has provided much-needed clarity on the interpretation of Section 24 of the 2013 Act, addressing a long-standing debate and conflicting interpretations.
By holding that “paid” in Section 24(2) means “tender of payment” and that non-deposit of compensation in court does not result in a lapse of acquisition if payment was offered, the Court has ensured that land acquisition processes are not unnecessarily delayed by technicalities. The Court’s decision to exclude the period of litigation or court restraint from the five-year period under Section 24(2) has also provided much-needed relief to acquiring authorities.
The judgment reflects a balanced approach, seeking to protect the rights of landowners while ensuring that land acquisition for public purposes is not unduly hampered. It has also emphasized the importance of a pragmatic and consistent interpretation of legal provisions, ensuring that the law is applied fairly and efficiently.
The judgment has had a significant impact on land acquisition law and practice in India, and it continues to be a guiding precedent for all subsequent cases involving the interpretation of Section 24 of the 2013 Act.