Supreme Court clarifies land acquisition lapse under Section 24(2) of the 2013 Act: Delhi Development Authority vs. Bhagwat Singh (2022)

Introduction

Date of the Judgment: November 2, 2022
Citation: Civil Appeal No. 7961 of 2022
Judges: Justice M.R. Shah and Justice M.M. Sundresh

Can land acquisition proceedings be deemed to have lapsed if compensation hasn’t been paid to landowners, even if possession of the land has been taken? The Supreme Court of India addressed this critical question in a recent judgment, clarifying the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (the “Act, 2013”). This case revolves around a dispute between the Delhi Development Authority and landowners concerning the validity of land acquisition. The bench comprised of Justice M.R. Shah and Justice M.M. Sundresh.

Case Background

The Delhi Development Authority (DDA) initiated land acquisition proceedings. The High Court of Delhi at New Delhi had previously ruled in favor of the landowners, stating that the land acquisition had lapsed under Section 24(2) of the Act, 2013, because compensation had not been paid. The DDA appealed this decision, arguing that possession of the land had already been taken. The High Court had relied on a previous Supreme Court ruling in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors. (2014) 3 SCC 183, which stated that non-payment of compensation would lead to the lapsing of acquisition.

Timeline

Course of Proceedings

The High Court of Delhi ruled in favor of the landowners, stating that the land acquisition had lapsed under Section 24(2) of the Act, 2013, because compensation had not been paid. The High Court relied on the decision in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors. (2014) 3 SCC 183. The Delhi Development Authority (DDA) then appealed to the Supreme Court, arguing that possession of the land had already been taken, and therefore, the acquisition should not lapse.

Legal Framework

The core of this case 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.

Section 24(2) of the Act, 2013 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 the payment of compensation, and Section 34 of the same Act, which deals with interest on delayed payments.

Arguments

The Delhi Development Authority (DDA) argued that the High Court erred in applying the ruling of Pune Municipal Corporation because it was overruled by a Constitution Bench in Indore Development Authority Vs. Manoharlal and Ors. (2020) 8 SCC 129. The DDA contended that since possession of the land had been taken, the acquisition should not lapse, even if compensation had not been paid.

The landowners, on the other hand, argued that since compensation had not been paid, the acquisition should lapse as per Section 24(2) of the Act, 2013. They relied on the interpretation of the word ‘or’ in the section, arguing that either non-payment of compensation or non-taking of possession would lead to the lapse of the acquisition.

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was the correct interpretation of Section 24(2) of the Act, 2013, specifically:

1. Whether the word “or” in Section 24(2) should be read as “or” or “and/nor” in the context of land acquisition lapse.
2. Whether the acquisition proceedings would lapse if either possession was not taken or compensation was not paid, or both conditions were required for the lapse.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Judgment

The Supreme Court held that the High Court’s judgment was unsustainable because it relied on the overruled decision in Pune Municipal Corporation. The Court emphasized that the Constitution Bench in Indore Development Authority had clarified that the word “or” in Section 24(2) should be read as “nor” or “and.” This means that for land acquisition to lapse, both possession must not have been taken and compensation must not have been paid.

The Court stated that “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 further clarified that “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.”

The Court also noted that “The obligation to pay is complete by tendering the amount under Section 31(1).”

The Supreme Court stated that the decision in Indore Development Authority Vs. Manoharlal and Ors. (2020) 8 SCC 129, specifically overruled the decision of this Court in the case of Pune Municipal Corporation and Anr. (supra).

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to provide a clear and consistent interpretation of Section 24(2) of the Act, 2013, as established by the Constitution Bench in Indore Development Authority. The Court emphasized the importance of adhering to the precedent set by a larger bench to ensure legal certainty. The Court’s reasoning focused on the literal interpretation of the word “or” in Section 24(2) of the Act, 2013, and clarified that the word “or” should be read as “nor” or “and.” This interpretation was crucial in determining whether land acquisition proceedings should lapse. The court also considered that the obligation to pay is complete by tendering the amount under Section 31(1).

Key Takeaways

• The Supreme Court clarified that the word “or” in Section 24(2) of the Act, 2013, should be interpreted as “nor” or “and.”
• Land acquisition proceedings will only lapse under Section 24(2) if both physical possession has not been taken and compensation has not been paid.
• If possession of the land has been taken, the acquisition will not lapse, even if compensation has not been paid.
• Tendering of compensation under Section 31(1) of the Land Acquisition Act, 1894, completes the obligation to pay.
• The decision in Pune Municipal Corporation has been overruled by the Constitution Bench decision in Indore Development Authority, and hence, the former cannot be relied upon.

Directions

The Supreme Court quashed and set aside the judgment of the High Court and dismissed the original writ petition filed by the landowners.

Development of Law

The ratio decidendi of this case is that 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.” This clarifies that for land acquisition proceedings to lapse, both non-taking of possession and non-payment of compensation must occur due to the inaction of authorities for five years or more prior to the commencement of the Act. This decision reinforces the legal position established in Indore Development Authority Vs. Manoharlal and Ors. (2020) 8 SCC 129, which overruled the earlier view in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors. (2014) 3 SCC 183.

Conclusion

The Supreme Court’s judgment in Delhi Development Authority vs. Bhagwat Singh & Ors. 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 section should be read as “nor” or “and,” meaning that both non-taking of possession and non-payment of compensation are necessary for land acquisition proceedings to lapse. This decision reinforces the precedent set by the Constitution Bench in Indore Development Authority, providing much-needed clarity on this crucial aspect of land acquisition law. The appeal of the Delhi Development Authority was allowed, and the High Court’s judgment was set aside.