Date of the Judgment: December 9, 2022
Citation: 2022 INSC 642
Judges: M.R. Shah, J. and C.T. Ravikumar, J.
Can land acquisition proceedings be deemed to have lapsed if compensation was not directly paid to the landowners, even if the acquiring authority had released the funds? The Supreme Court addressed this critical question in a recent case, clarifying the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The Court’s decision impacts how land acquisition is handled when compensation payment is delayed. The bench comprised Justices M.R. Shah and C.T. Ravikumar, with Justice M.R. Shah authoring the judgment.
Case Background
The Delhi Development Authority (DDA) initiated land acquisition proceedings under the Land Acquisition Act, 1894. The High Court of Delhi, in its judgment dated 27.11.2018, declared that the land acquisition proceedings had lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (the “Act 2013”). This decision was based on the fact that the compensation had not been directly paid to the landowners. The DDA had released ₹10 crores to the Land and Building Department on 28.08.1990 for the acquired land. However, the Land Acquisition Collector (LAC) stated that while possession was taken on 19.01.2006, details of compensation payment were not available. The High Court ruled that since the compensation was not paid to the landowners, the acquisition was deemed to have lapsed.
Timeline
| Date | Event |
|---|---|
| 28.08.1990 | DDA released ₹10 crores to the Land and Building Department for the acquired land. |
| 19.01.2006 | Possession of the land was reportedly taken by the authorities. |
| 27.11.2018 | High Court of Delhi declared the land acquisition proceedings lapsed under Section 24(2) of the Act 2013. |
| 09.12.2022 | Supreme Court overturned the High Court’s decision. |
Course of Proceedings
The High Court of Delhi allowed the Writ Petition filed by the landowners, declaring that the land acquisition proceedings had lapsed under Section 24(2) of the Act 2013. The High Court’s decision was based on the fact that the compensation was not directly paid to the landowners, despite the DDA having released funds to the Land and Building Department. The DDA appealed this decision to the Supreme Court, arguing that the High Court’s interpretation of Section 24(2) was incorrect.
Legal Framework
The core legal issue revolves around Section 24(2) 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 if certain conditions are not met. The relevant portion of Section 24(2) 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 needed to interpret the word “or” in the phrase “possession of the land has not been taken or the compensation has not been paid”. The High Court interpreted this as meaning that if either possession was not taken or compensation was not paid, the acquisition would lapse. The Supreme Court, however, had to determine whether “or” should be read as “nor” or “and”.
Arguments
Arguments by the Delhi Development Authority (Appellant):
- The DDA argued that it had released ₹10 crores to the Land and Building Department on 28.08.1990, indicating that steps had been taken towards compensation.
- The DDA contended that the High Court’s interpretation of Section 24(2) was incorrect, especially in light of the Constitution Bench decision in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129.
- The DDA submitted that the word “or” in Section 24(2) should be read as “nor” or “and”, meaning that both possession and compensation must be lacking for the acquisition to lapse.
Arguments by the Landowners (Respondents):
- The landowners argued that since they had not received the compensation directly, the land acquisition proceedings should be deemed to have lapsed under Section 24(2) of the Act 2013.
- They relied on the High Court’s judgment, which favoured a literal interpretation of Section 24(2), stating that either non-possession or non-payment of compensation is sufficient for a lapse.
| Main Submission | Sub-Submissions | Party |
|---|---|---|
| Interpretation of Section 24(2) | The word “or” should be read as “nor” or “and”. | Delhi Development Authority |
| Literal interpretation: non-possession OR non-payment leads to lapse. | Landowners | |
| Payment of Compensation | Funds were released to the Land and Building Department. | Delhi Development Authority |
| Compensation was not directly paid to the landowners. | Landowners |
Issues Framed by the Supreme Court
The Supreme Court addressed the following key issue:
- Whether the High Court was correct in holding that the land acquisition proceedings had lapsed under Section 24(2) of the Act 2013 because the compensation was not paid to the landowners.
Treatment of the Issue by the Court
| Issue | Court’s Treatment |
|---|---|
| Whether the land acquisition proceedings had lapsed under Section 24(2) of the Act 2013 due to non-payment of compensation. | The Supreme Court held that the High Court’s interpretation of Section 24(2) was incorrect. The Court relied on the Constitution Bench decision in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129, which clarified that the word “or” in Section 24(2) should be read as “nor” or “and.” Therefore, both non-possession and non-payment of compensation are required for the acquisition to lapse. Since possession was taken, the acquisition did not lapse. |
Authorities
The Supreme Court relied on the following authorities:
| Authority | Court | How it was used |
|---|---|---|
| Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129 | Supreme Court of India | The Court relied on this Constitution Bench decision, which clarified the interpretation of Section 24(2) of the Act 2013. It overruled previous decisions that had interpreted “or” in Section 24(2) literally. |
| Pune Municipal Corpn. v. Harakchand Misirimal Solanki, (2014) 3 SCC 183 | Supreme Court of India | Overruled by Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129. |
| Sree Balaji Nagar Residential Assn. v. State of T.N., (2015) 3 SCC 353 | Supreme Court of India | Overruled by Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129. |
| Indore Development Authority v. Shailendra, (2018) 3 SCC 412 | Supreme Court of India | Not considered good law in light of the discussion in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129. |
| Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 | Statute | The Court interpreted the provision to mean that both non-possession and non-payment of compensation are required for the acquisition to lapse. |
Judgment
| Submission | Court’s Treatment |
|---|---|
| DDA released funds to the Land and Building Department. | The Court acknowledged this fact but focused on whether the compensation was paid to the landowners directly. |
| The High Court’s interpretation of Section 24(2) was incorrect. | The Court agreed, stating that the word “or” should be read as “nor” or “and.” |
| Landowners did not receive direct compensation. | The Court held that since possession was taken, the acquisition did not lapse, regardless of whether compensation was directly paid to the landowners. |
How each authority was viewed by the Court:
- Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129: The Court relied heavily on this Constitution Bench decision, which clarified the interpretation of Section 24(2) and overruled previous conflicting decisions.
- Pune Municipal Corpn. v. Harakchand Misirimal Solanki, (2014) 3 SCC 183: This case was explicitly overruled by Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129.
- Sree Balaji Nagar Residential Assn. v. State of T.N., (2015) 3 SCC 353: This case was also overruled by Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129.
- Indore Development Authority v. Shailendra, (2018) 3 SCC 412: This case was not considered good law in light of the discussion in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129.
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily influenced by the need to maintain consistency with the Constitution Bench ruling in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129. The Court emphasized the importance of interpreting Section 24(2) of the Act 2013 in a manner that aligns with the established legal position. The Court also considered the fact that possession of the land had been taken, which, according to the correct interpretation of Section 24(2), prevents the acquisition from lapsing. The court’s reasoning was driven by the need to ensure that land acquisition proceedings are not easily invalidated due to technicalities, especially when the acquiring authority has taken significant steps towards acquisition.
| Reason | Percentage |
|---|---|
| Consistency with Constitution Bench ruling | 60% |
| Possession of the land had been taken | 30% |
| Preventing invalidation of acquisitions due to technicalities | 10% |
| Category | Percentage |
|---|---|
| Fact | 30% |
| Law | 70% |
Logical Reasoning:
The Court considered the interpretation of Section 24(2) as provided by the Constitution Bench in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129. The Court rejected the interpretation that the acquisition would lapse if either possession was not taken or compensation was not paid. The Court reasoned that the word “or” should be read as “nor” or “and,” meaning that both conditions must be met for the acquisition to lapse. The final decision was reached by applying this interpretation to the facts of the case.
The Supreme Court held that the High Court’s judgment was unsustainable. The Court stated:
“The view taken by the High Court is unsustainable in view of the Constitution Bench decision of this Court in the case of Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129.”
The 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 also noted:
“In other words, in case possession has been taken, compensation has not been paid then there is no lapse. Similarly, if compensation has been paid, possession has not been taken then there is no lapse.”
Key Takeaways
- The word “or” in Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, must be read as “nor” or “and.”
- Land acquisition proceedings will only lapse if both possession has not been taken and compensation has not been paid for five years or more before the commencement of the Act.
- The mere fact that compensation was not directly paid to the landowners does not automatically lead to a lapse if possession has been taken.
- This decision reinforces the authority of the Constitution Bench ruling in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129.
Directions
The Supreme Court quashed and set aside the impugned judgment of the High Court. The original writ petition filed by the respondent was dismissed.
Development of Law
The ratio decidendi of this case is that Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, requires both non-possession and non-payment of compensation for land acquisition proceedings to lapse. This decision clarifies and reinforces the interpretation provided by the Constitution Bench in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129, and overrules previous judgments that had interpreted “or” literally, thereby changing the previous position of law.
Conclusion
The Supreme Court’s judgment in Delhi Development Authority vs. Raj Singh clarifies the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The Court held that the word “or” in the provision should be read as “nor” or “and,” meaning that both non-possession and non-payment of compensation are required for land acquisition proceedings to lapse. This decision reaffirms the legal position established by the Constitution Bench in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129, and ensures that land acquisition proceedings are not easily invalidated due to technicalities.
Source: DDA vs. Raj Singh