LEGAL ISSUE: Whether land acquisition proceedings lapse under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 if compensation is deposited in the Treasury but not in Court.
CASE TYPE: Land Acquisition
Case Name: Ayodhya Faizabad Development Authority and Anr. vs. Ram Newaj and others
[Judgment Date]: 20 May 2022
Date of the Judgment: 20 May 2022
Citation: 2022 INSC 477
Judges: M.R. Shah, J., B.V. Nagarathna, J.
Can land acquisition proceedings be deemed to have lapsed if the compensation amount is deposited in the government treasury but not in the court? The Supreme Court of India recently addressed this critical question in a case concerning the Ayodhya Faizabad Development Authority. This judgment clarifies the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, specifically regarding the conditions under which land acquisition proceedings can lapse. The bench comprised Justices M.R. Shah and B.V. Nagarathna, with the opinion authored by Justice M.R. Shah.
Case Background
The case involves a dispute over land acquisition in which the Ayodhya Faizabad Development Authority acquired certain plots of land. The original writ petitioners, now respondents, challenged the acquisition, claiming it had lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (the Act of 2013). The core of their argument was that while the compensation was deposited in the government treasury, it was not deposited in the court, and therefore, payment was not made to the landowners.
Timeline
| Date | Event |
|---|---|
| 07.09.2005 | Possession of the land was taken by the Ayodhya Faizabad Development Authority. |
| 19.07.2017 | The High Court of Judicature at Allahabad, Lucknow Bench, ruled in favor of the original writ petitioners, stating the acquisition proceedings had lapsed under Section 24(2) of the Act of 2013. |
| 20.05.2022 | The Supreme Court of India overturned the High Court’s decision, ruling in favor of the Ayodhya Faizabad Development Authority. |
Course of Proceedings
The High Court of Judicature at Allahabad, Lucknow Bench, had allowed the writ petition filed by the original writ petitioners (now respondents), holding that the land acquisition proceedings had lapsed under Section 24(2) of the Act of 2013. The High Court relied on the judgment of the Supreme Court in Delhi Development Authority versus Sukhbir Singh and others, (2016) 16 SCC 258, which was later overruled. The Ayodhya Faizabad Development Authority then appealed to the Supreme Court.
Legal Framework
The primary legal provision in question is Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which states:
“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.”
The Supreme Court also considered Section 31 of the Land Acquisition Act, 1894, which deals with payment of compensation.
Arguments
The High Court held that the acquisition proceedings lapsed because the compensation, though deposited in the Treasury, was not deposited in the Court, and therefore, payment was not made to the landowners. The High Court relied on Delhi Development Authority versus Sukhbir Singh and others, (2016) 16 SCC 258.
The Ayodhya Faizabad Development Authority argued that the deposit of compensation in the Treasury and the taking of possession were sufficient to prevent the lapsing of the acquisition proceedings under Section 24(2) of the Act of 2013. They relied on the subsequent decision of the Supreme Court in Indore Development Authority versus Manoharlal and others, (2020) 8 SCC 129, which overruled the earlier judgment.
| Submissions by Respondents (Original Writ Petitioners) | Submissions by Appellants (Ayodhya Faizabad Development Authority) |
|---|---|
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Issues Framed by the Supreme Court
The core issue before the Supreme Court was whether the land acquisition proceedings lapsed under Section 24(2) of the Act of 2013, given that the compensation was deposited in the Treasury but not in the Court, and possession had been taken.
Treatment of the Issue by the Court
| Issue | Court’s Decision |
|---|---|
| Whether land acquisition proceedings lapse under Section 24(2) of the 2013 Act if compensation is deposited in the Treasury but not in Court, and possession has been taken? | The Supreme Court held that the deposit of compensation in the Treasury and the taking of possession was sufficient to prevent the lapsing of the acquisition proceedings. The court relied on Indore Development Authority versus Manoharlal and others, (2020) 8 SCC 129, which clarified that the word “or” in Section 24(2) should be read as “and” or “nor”. Thus, if either possession is taken or compensation is paid, the proceedings do not lapse. |
Authorities
| Authority | Court | How it was used |
|---|---|---|
| Delhi Development Authority versus Sukhbir Singh and others, (2016) 16 SCC 258 | Supreme Court of India | The High Court relied on this case to hold that the acquisition proceedings had lapsed. However, this judgment was later overruled. |
| Indore Development Authority versus Manoharlal and others, (2020) 8 SCC 129 | Supreme Court of India | The Supreme Court relied on this case, which overruled the previous judgment, to hold that the acquisition proceedings did not lapse. This case clarified the interpretation of Section 24(2) of the Act of 2013. |
The Supreme Court also considered Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 and Section 31 of the Land Acquisition Act, 1894.
Judgment
| Submission by Parties | Treatment by the Court |
|---|---|
| The original writ petitioners argued that the acquisition had lapsed as compensation was not paid to the landowners. | The Supreme Court rejected this argument, holding that the deposit of compensation in the Treasury and the taking of possession was sufficient to prevent the lapsing of the acquisition proceedings. |
| The Ayodhya Faizabad Development Authority argued that the acquisition did not lapse as compensation was deposited in the Treasury and possession was taken. | The Supreme Court accepted this argument, relying on the judgment in Indore Development Authority versus Manoharlal and others, (2020) 8 SCC 129. |
The Supreme Court relied on the judgment in Indore Development Authority versus Manoharlal and others, (2020) 8 SCC 129, which clarified the interpretation of Section 24(2) of the Act of 2013. The Court held that the word “or” in Section 24(2) should be read as “and” or “nor”. This means that if either possession is taken or compensation is paid, the proceedings do not lapse.
The Supreme Court specifically overruled the High Court’s reliance on Delhi Development Authority versus Sukhbir Singh and others, (2016) 16 SCC 258, which had held that deposit of compensation in court was necessary to prevent the lapsing of acquisition proceedings.
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily influenced by the need for a consistent and correct interpretation of Section 24(2) of the 2013 Act. The Court emphasized that the legislative intent was to prevent the lapse of acquisition proceedings where either possession had been taken or compensation had been paid. The Court’s reasoning was also shaped by the need to ensure that the law is applied uniformly and that settled legal positions are upheld. The overruling of the High Court’s judgment was driven by the Supreme Court’s own precedent in Indore Development Authority versus Manoharlal and others, (2020) 8 SCC 129.
| Sentiment | Percentage |
|---|---|
| Legal Precedent (Indore Development Authority) | 60% |
| Correct Interpretation of Section 24(2) | 30% |
| Legislative Intent | 10% |
| Ratio | Percentage |
|---|---|
| Fact | 20% |
| Law | 80% |
The Supreme Court stated:
“In view of the subsequent decision of this Court in the case of Indore Development Authority versus Manoharlal and others, (2020) 8 SCC 129, the impugned judgment and order passed by the High Court is unsustainable.”
The Supreme Court further clarified:
“The word “or” used in Section 24(2) between possession and compensation has to be read as “nor” or as “and”. The deemed lapse of land acquisition proceedings under Section 24(2) of the 2013 Act takes place where due to inaction of authorities for five years or more prior to commencement of the said Act, the possession of land has not been taken nor compensation has been paid.”
The Court concluded:
“In the present case as the amount of compensation was deposited with the Treasury and even the possession was already taken over on 07.09.2005, the impugned judgment and order passed by the High Court holding that the land acquisition proceedings with respect to the lands in question are deemed to have lapsed deserves to be quashed and set aside.”
Key Takeaways
- The Supreme Court clarified that for land acquisition proceedings under the 2013 Act, the word “or” in Section 24(2) should be interpreted as “and” or “nor.”
- If either possession of the land has been taken or compensation has been paid, the acquisition proceedings do not lapse.
- Deposit of compensation in the government treasury is considered sufficient, and it is not mandatory to deposit the compensation in court to avoid the lapsing of acquisition proceedings.
- This judgment provides clarity on the interpretation of Section 24(2) of the 2013 Act, ensuring consistency in its application.
Directions
The Supreme Court quashed and set aside the judgment of the High Court and dismissed the writ petition filed by the original writ petitioners.
Development of Law
The ratio decidendi of this case is that under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, the word “or” between possession and compensation should be interpreted as “and” or “nor.” This means that land acquisition proceedings will not lapse if either possession has been taken or compensation has been paid. This judgment reaffirms the position of law established in Indore Development Authority versus Manoharlal and others, (2020) 8 SCC 129 and overrules the earlier position in Delhi Development Authority versus Sukhbir Singh and others, (2016) 16 SCC 258.
Conclusion
The Supreme Court’s judgment in Ayodhya Faizabad Development Authority vs. Ram Newaj clarifies the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. By holding that the word “or” should be read as “and” or “nor,” the court has ensured that land acquisition proceedings do not lapse if either possession has been taken or compensation has been paid. This decision provides much-needed clarity and consistency in the application of land acquisition laws.