Supreme Court clarifies land acquisition lapse under Section 24(2) of the 2013 Act: Delhi Development Authority vs. Rajesh Dua (2023) INSC 28

Introduction

Date of the Judgment: 20 January 2023

Citation: (2023) INSC 28

Judges: M.R. Shah, J. and C.T. Ravikumar, J.

Can the acquisition of land be deemed to have lapsed if the compensation was deposited in the Reference Court instead of being directly paid to the landowners? The Supreme Court of India recently addressed this critical question in a case concerning the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (Act, 2013). This judgment clarifies the conditions under which land acquisition proceedings are considered to have lapsed.

The core issue revolves around whether depositing compensation in the Reference Court satisfies the requirement of payment under Section 24(2) of the Act, 2013, and whether taking possession of land by drawing a panchnama is a valid mode of possession. The bench comprised Justices M.R. Shah and C.T. Ravikumar, who delivered a unanimous judgment.

Case Background

In 1964, the land in question was acquired by the Delhi Development Authority (DDA). The award for the acquisition was declared in 1967. The Land Acquisition Collector (LAC) stated that the possession of the land was taken in 1967 by drawing a panchnama, and the compensation was deposited with the Reference Court in the same year. In 2017, the original landowners, the respondents in this case, filed a writ petition before the High Court of Delhi, seeking a declaration that the acquisition had lapsed under Section 24(2) of the Act, 2013. They argued that the compensation was not actually tendered or paid to them. The High Court, relying on its earlier decision in Smt. Harbans Kaur Vs. Govt. of NCT of Delhi and Ors., held that depositing the compensation with the Reference Court did not constitute payment to the landowners and declared that the acquisition had lapsed.

Timeline

Course of Proceedings

The High Court of Delhi, in its judgment, relied on its earlier decision in Smt. Harbans Kaur Vs. Govt. of NCT of Delhi and Ors., which in turn relied on the Supreme Court’s decision in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors. The High Court held that depositing the compensation with the Reference Court could not be considered as payment to the landowners. Consequently, the High Court declared that the acquisition with respect to the land in question was deemed to have lapsed as the actual physical possession of the subject land had not been taken over by the land acquiring agency. The DDA then appealed to the Supreme Court.

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 provides that if physical possession of the land has not been taken or the compensation has not been paid, the acquisition proceedings are deemed to have lapsed. The High Court interpreted the term “paid” to mean actual payment to the landowners, not merely depositing the amount in the Reference Court. However, this interpretation was based on the Supreme Court’s decision in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., which has since been overruled. The Supreme Court in Indore Development Authority Vs. Manoharlal and Ors. clarified the interpretation of Section 24(2) and the meaning of the word “paid”.

Arguments

Arguments by the Delhi Development Authority (DDA):

• The DDA argued that the compensation was deposited in the Reference Court in 1967, and the possession of the land was taken in the same year by drawing a panchnama.
• The DDA contended that the High Court’s decision was based on the overruled judgment of Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors.
• The DDA relied on the Constitution Bench decision in Indore Development Authority Vs. Manoharlal and Ors., which clarified that the word “or” in Section 24(2) should be read as “nor” or “and.”
• The DDA argued that once possession has been taken, there is no lapse under Section 24(2), even if compensation has not been paid.

Arguments by the Landowners:

• The landowners argued that the compensation was not actually paid to them, as it was merely deposited in the Reference Court.
• They contended that the acquisition should be deemed to have lapsed under Section 24(2) of the Act, 2013, as they had not received the compensation.
• They relied on the High Court’s decision in Smt. Harbans Kaur Vs. Govt. of NCT of Delhi and Ors., which supported their position.

The DDA’s primary argument was based on the interpretation of Section 24(2) as clarified by the Constitution Bench in Indore Development Authority Vs. Manoharlal and Ors., which held that the word “or” should be read as “nor” or “and.” This meant that for a lapse to occur, both possession must not have been taken *and* compensation must not have been paid. The landowners’ argument was primarily based on the premise that depositing compensation in the Reference Court was not equivalent to payment to the landowners, and they had not received the compensation.

Issues Framed by the Supreme Court

The Supreme Court addressed the following key issues:

1. Whether the acquisition proceedings initiated under the Land Acquisition Act, 1894, with regard to the land in question, are deemed to have lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
2. Whether depositing the compensation in the Reference Court amounts to payment to the landowners under Section 24(2) of the Act, 2013.
3. Whether taking possession of the land by drawing a panchnama is a valid mode of taking possession.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

On the interpretation of Section 24(2) of the Act, 2013:

• Indore Development Authority Vs. Manoharlal and Ors. (2020) 8 SCC 129 – Supreme Court of India: The Constitution Bench clarified that the word “or” in Section 24(2) should be read as “nor” or “and,” and that the deemed lapse occurs only when both possession has not been taken and compensation has not been paid.
• Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors. (2014) 3 SCC 183 – Supreme Court of India: This case was specifically overruled by the Constitution Bench in Indore Development Authority Vs. Manoharlal and Ors. The Court stated that the interpretation of Section 24(2) in this case was incorrect.
• Smt. Harbans Kaur Vs. Govt. of NCT of Delhi and Ors. [W.P.(C) 5358 of 2014, decided on 02.02.2015] – High Court of Delhi: The High Court relied on the overruled judgment of Pune Municipal Corporation.

On the mode of taking possession:

• Indore Development Authority Vs. Manoharlal and Ors. (2020) 8 SCC 129 – Supreme Court of India: The Constitution Bench held that the mode of taking possession under the 1894 Act and as contemplated under Section 24(2) is by drawing of inquest report/memorandum.

Judgment

The Supreme Court, after considering the arguments and the relevant legal precedents, held that the acquisition proceedings had not lapsed. The Court emphasized that the High Court’s decision was based on the overruled judgment of Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors. The Supreme Court reiterated the interpretation of Section 24(2) as laid down in Indore Development Authority Vs. Manoharlal and Ors., which clarified that the word “or” should be read as “nor” or “and”.

How each authority was viewed by the Court:

• Indore Development Authority Vs. Manoharlal and Ors. [CITATION]: The Court followed this authority, relying on its interpretation of Section 24(2) and the mode of taking possession.
• Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors. [CITATION]: The Court explicitly overruled this authority, stating that its interpretation of Section 24(2) was incorrect.

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 non-possession and non-payment are required for a lapse to occur. The Court also considered the fact that possession was taken by drawing a panchnama, which is a valid mode of taking possession.

“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 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 mode of taking possession under the 1894 Act and as contemplated under Section 24(2) is by drawing of inquest report/memorandum.”

Key Takeaways

• The Supreme Court clarified that for land acquisition proceedings to lapse under Section 24(2) of the Act, 2013, both possession must not have been taken and compensation must not have been paid.
• The word “or” in Section 24(2) should be read as “nor” or “and,” meaning that both conditions must be met for a lapse to occur.
• Depositing compensation in the Reference Court does not amount to payment to the landowners, but it does not lead to a lapse of the acquisition if possession has been taken.
• Taking possession of land by drawing a panchnama is a valid mode of taking possession.
• The judgment overrules the earlier interpretation of Section 24(2) in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors.

Directions

There were no specific directions given by the Supreme Court in this judgment.

Specific Amendments Analysis

There were no specific amendments discussed in the judgment.

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, should be read as “nor” or “and.” This means that a lapse of acquisition proceedings under Section 24(2) only occurs when both possession has not been taken and compensation has not been paid. This judgment clarifies the interpretation of Section 24(2) and overrules the previous position of law as interpreted in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors.

Conclusion

The Supreme Court’s judgment in Delhi Development Authority vs. Rajesh Dua and 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 for land acquisition proceedings to lapse, both possession must not have been taken and compensation must not have been paid. The judgment overrules the previous interpretation of Section 24(2) and provides clarity on the conditions under which land acquisition proceedings are considered to have lapsed. The Supreme Court allowed the appeal of the DDA and set aside the judgment of the High Court.