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

Date of the Judgment: 09 December 2022
Citation: 2022 INSC 1066
Judges: M.R. Shah, J. and C.T. Ravikumar, J.
Can a subsequent purchaser of land challenge acquisition proceedings under the Land Acquisition Act, 1894, claiming that the acquisition has lapsed due to non-payment of compensation? The Supreme Court of India addressed this critical question, 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 held that a subsequent purchaser does not have the locus standi to challenge the acquisition and that the acquisition does not lapse if possession has been taken, even if compensation is not paid to the subsequent purchaser. This judgment was delivered by a bench comprising Justices M.R. Shah and C.T. Ravikumar, with the majority opinion authored by Justice M.R. Shah.

Case Background

The Delhi Development Authority (DDA) initiated acquisition proceedings for certain land under the Land Acquisition Act, 1894. Possession of the land was taken by the DDA on 26 November 2012. Subsequently, the original writ petitioner purchased the land. The petitioner then filed a writ petition before the High Court of Delhi, claiming that the acquisition proceedings had lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, because the compensation had not been paid to them. The High Court allowed the writ petition, declaring that the acquisition had lapsed. The DDA then appealed to the Supreme Court.

Timeline

Course of Proceedings

The High Court of Delhi allowed the writ petition filed by the subsequent purchaser, holding that the acquisition proceedings had lapsed under Section 24(2) of the Act, 2013, because the compensation had not been paid to the subsequent purchaser. The High Court relied on the decision in Government (NCT of Delhi) Vs. Manav Dharam Trust and Anr., (2017) 6 SCC 751, to overrule the objection regarding the maintainability of the writ petition by a subsequent purchaser. The Delhi Development Authority (DDA) appealed this decision to the Supreme Court.

Legal Framework

The Supreme Court examined the following key legal provisions:

• 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 acquisition proceedings if certain conditions are not met. It 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.”
• Section 31(1) of the Land Acquisition Act, 1894: This section deals with the payment of compensation.
• Section 16 of the Land Acquisition Act, 1894: This section deals with the possession of land after an award has been passed.

The Court emphasized that the interpretation of Section 24(2) of the Act, 2013, had been clarified by the Constitution Bench in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129.

Arguments

Arguments by the Appellant (Delhi Development Authority):

• The appellant argued that the High Court had erred in allowing the writ petition filed by the subsequent purchaser.
• The appellant contended that the subsequent purchaser had no locus standi to challenge the acquisition proceedings.
• The appellant relied on the decision in Delhi Development Authority Vs. Godfrey Philips (I) Ltd. & Ors., to argue that a subsequent purchaser cannot claim lapsing of proceedings under the Act, 2013.
• The appellant further argued that the acquisition proceedings could not lapse under Section 24(2) of the Act, 2013, because possession of the land had already been taken.
• The appellant relied on the decision in Indore Development Authority Vs. Manoharlal and Ors., to state that both conditions, of not taking possession and not paying compensation, must be satisfied for the acquisition to lapse.

Arguments by the Respondent (Original Writ Petitioner):

• The respondent argued that the acquisition proceedings had lapsed because the compensation had not been paid to them.
• The respondent relied on the High Court’s decision, which had held that the acquisition had lapsed under Section 24(2) of the Act, 2013.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the main issues addressed by the Court were:

1. Whether a subsequent purchaser has the locus standi to challenge the acquisition proceedings under Section 24(2) of the Act, 2013.
2. Whether the acquisition proceedings lapse under Section 24(2) of the Act, 2013, if possession has been taken, but compensation has not been paid to the subsequent purchaser.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues:

Authorities

The Supreme Court considered the following authorities:

Cases:

• Government (NCT of Delhi) Vs. Manav Dharam Trust and Anr., (2017) 6 SCC 751 – The High Court relied on this case to hold that a subsequent purchaser can maintain a writ petition. However, this was overruled by the Supreme Court.
• Delhi Development Authority Vs. Godfrey Philips (I) Ltd. & Ors. – The Supreme Court relied on this case to hold that a subsequent purchaser cannot claim lapsing of proceedings under the Act, 2013.
• Delhi Administration Thr. Secretary, Land and Building Department & Ors. Vs. Pawan Kumar & Ors. – The Supreme Court followed this case, which followed the Godfrey Philips case.
• Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129 – The Supreme Court relied on this Constitution Bench decision to interpret Section 24(2) of the Act, 2013, holding that both conditions, of not taking possession and not paying compensation, must be satisfied for the acquisition to lapse.

Legal Provisions:

• Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013: The Court interpreted this section to mean that the acquisition lapses only if both possession has not been taken and compensation has not been paid.
• Section 31(1) of the Land Acquisition Act, 1894: This section deals with the payment of compensation.
• Section 16 of the Land Acquisition Act, 1894: This section deals with the possession of land after an award has been passed.

Judgment

The Supreme Court allowed the appeal, setting aside the High Court’s judgment. The Court held that the subsequent purchaser had no locus standi to file the writ petition and that the acquisition proceedings did not lapse under Section 24(2) of the Act, 2013, because possession of the land had been taken. The Court clarified that for the acquisition to lapse under Section 24(2), both conditions—not taking possession and not paying compensation—must be satisfied. The Court also directed that if the compensation had not been paid to the recorded owner, it should be paid as and when the recorded owner or the person entitled to claim compensation approaches the authorities.

How each authority was viewed by the Court?

• The Court overruled the High Court’s reliance on Government (NCT of Delhi) Vs. Manav Dharam Trust and Anr., (2017) 6 SCC 751, stating that a subsequent purchaser cannot maintain a writ petition.
• The Court followed Delhi Development Authority Vs. Godfrey Philips (I) Ltd. & Ors., holding that a subsequent purchaser cannot claim lapsing of proceedings.
• The Court followed Delhi Administration Thr. Secretary, Land and Building Department & Ors. Vs. Pawan Kumar & Ors., which followed the Godfrey Philips case.
• The Court followed Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129, to interpret Section 24(2) of the Act, 2013, stating that both conditions (non-possession and non-payment) must be satisfied for the acquisition to lapse.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the interpretation of Section 24(2) of the Act, 2013, as clarified by the Constitution Bench in Indore Development Authority Vs. Manoharlal and Ors. The Court emphasized that the word “or” in Section 24(2) should be read as “nor” or “and,” meaning that both conditions (non-possession and non-payment) must be met for the acquisition to lapse. The Court also considered the fact that the original writ petitioner was a subsequent purchaser, who, according to previous rulings, does not have the locus standi to challenge the acquisition proceedings. The Court’s reasoning was also influenced by the principle that once possession has been taken, the land vests in the State, and there is no divesting under Section 24(2) of the Act, 2013.

Fact:Law Ratio

The Court’s decision was heavily based on legal interpretations and precedents, with a smaller emphasis on the specific facts of the case.

The Supreme Court’s reasoning was clear and direct. Since possession had been taken, the acquisition could not lapse under Section 24(2) of the Act, 2013, regardless of whether compensation had been paid to the subsequent purchaser.

The Court quoted from the judgment in Indore Development Authority Vs. Manoharlal and Ors.:

“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. 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 stated:

“In the case of Godfrey Philips (I) Ltd. & Ors. (supra) , it is observed and held that the subsequent purchaser is not entitled to claim lapsing of the proceedings under the Act, 2013. In that view of the matter, the original writ petitioner – subsequent purchaser had no locus to file the writ petition to claim lapsing of the acquisition proceedings under Section 24(2) of the Act, 2013.”

Further, the Court observed:

“Once award has been passed on taking possession under Section 16 of the 1894 Act, the land vests in State there is no divesting provided under Section 24(2) of the 2013 Act, as once possession has been taken there is no lapse under Section 24(2).”

Key Takeaways

• A subsequent purchaser of land does not have the right to challenge acquisition proceedings under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
• Acquisition proceedings do not lapse under Section 24(2) of the Act, 2013, if possession of the land has been taken, even if compensation has not been paid to the subsequent purchaser.
• The word “or” in Section 24(2) of the Act, 2013, should be read as “nor” or “and,” meaning that both conditions (non-possession and non-payment) must be met for the acquisition to lapse.
• If compensation has not been paid to the recorded owner, it should be paid as and when the recorded owner or the person entitled to claim compensation approaches the authorities.

Directions

The Supreme Court directed that if the compensation is not paid to the recorded owner, as and when the recorded owner and/or the person entitled to claim compensation under the Land Acquisition Act, 1894, approaches for claiming compensation, the same be paid in accordance with law.

Development of Law

The ratio decidendi of this case is that a subsequent purchaser does not have the locus standi to challenge acquisition proceedings under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, and that acquisition proceedings do not lapse if possession has been taken, even if compensation has not been paid to the subsequent purchaser. This judgment reinforces the interpretation of Section 24(2) as laid down in Indore Development Authority Vs. Manoharlal and Ors., clarifying that both conditions (non-possession and non-payment) must be met for acquisition proceedings to lapse. This case clarifies the position of law with respect to subsequent purchasers and the interpretation of Section 24(2) of the Act, 2013. This is a reaffirmation of the position of law settled by the Constitution Bench in Indore Development Authority Vs. Manoharlal and Ors.

Conclusion

The Supreme Court’s judgment in Delhi Development Authority vs. Dayanand & Ors. clarifies the legal position regarding the locus standi of subsequent purchasers and 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 a subsequent purchaser cannot challenge acquisition proceedings and that such proceedings do not lapse if possession has been taken, even if compensation has not been paid to the subsequent purchaser. This decision reaffirms the principles established in previous judgments and provides clarity on the application of Section 24(2).