Supreme Court clarifies land acquisition lapse under Section 24(2) of the 2013 Act: HSIIDC & Ors. vs. Honeywell International (India) Pvt. Ltd. (2023)

Introduction

Date of the Judgment: April 11, 2023

Citation: 2023 INSC 353

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

Can a land acquisition be deemed to have lapsed even if the government has taken possession and paid compensation? This was the core question before the Supreme Court in a batch of appeals concerning land acquisitions in Haryana. The Court addressed 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’), in cases where acquisitions were initiated under the Land Acquisition Act, 1894 (the ‘Act 1894’). The bench comprised Justices M.R. Shah and C.T. Ravikumar, with the judgment authored by Justice M.R. Shah.

Case Background

The appeals before the Supreme Court arose from a series of cases where landowners challenged land acquisitions initiated under the Act 1894. The primary contention was that these acquisitions had lapsed under Section 24(2) of the Act 2013. The landowners argued that they had not received compensation, nor had the possession of their land been taken. The Haryana State Industrial and Infrastructure Development Corporation Limited (HSIIDC) and the State of Haryana were the appellants, while various landowners were the respondents.

The High Court, relying on a previous Supreme Court decision, had ruled in favor of the landowners, declaring that the acquisitions had indeed lapsed. The HSIIDC and the State of Haryana appealed this decision, arguing that the High Court had erred in its interpretation of Section 24(2) of the Act 2013.

Timeline:

Course of Proceedings

The High Court of Punjab and Haryana had allowed the writ petitions filed by the landowners, declaring that the land acquisitions had lapsed under Section 24(2) of the Act 2013. The High Court primarily relied on the Supreme Court’s decision in Pune Municipal Corporation v. Harakchand Misirimal Solanki [(2014) 3 SCC 183]. The High Court did not delve into the merits of the challenges to the acquisition proceedings under the Act 1894, focusing solely on the deemed lapse under the Act 2013. Aggrieved by this, the HSIIDC and the State of Haryana filed appeals before the Supreme Court.

Legal Framework

The core legal issue revolves around Section 24(2) of the 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 Act 1894 was the primary law governing land acquisition in India before the enactment of the Act 2013. The Act 2013 introduced significant changes to the land acquisition process, including enhanced compensation and rehabilitation measures. Section 24(2) was included to address pending acquisitions under the old law.

Arguments

Appellants (HSIIDC and State of Haryana)

• The appellants argued that the High Court erred in applying Section 24(2) of the Act 2013, as the possession of the lands had already been taken, and compensation had been paid or deposited.
• They contended that the decision in Pune Municipal Corporation v. Harakchand Misirimal Solanki [(2014) 3 SCC 183], relied upon by the High Court, was not applicable to the present cases, as the facts were different.
• The appellants submitted that once possession is taken and compensation is paid, the acquisition proceedings under the Act 1894 cannot be challenged.

Respondents (Landowners)

• The landowners argued that the acquisition proceedings had lapsed because they had not received compensation, and possession had not been taken.
• They contended that the High Court had correctly applied Section 24(2) of the Act 2013 and the decision in Pune Municipal Corporation (supra).
• Some of the landowners also disputed that actual physical possession was taken, citing the absence of possession reports.

Issues Framed by the Supreme Court

The Supreme Court considered the following key issues:

1. Whether the High Court was correct in declaring that the acquisitions had lapsed under Section 24(2) of the Act 2013, based on the decision in Pune Municipal Corporation (supra).
2. Whether the acquisition proceedings under the Act 1894 could be challenged once possession had been taken and compensation paid/deposited.
3. Whether the absence of a possession report is sufficient to conclude that physical possession was not taken.

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:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• Pune Municipal Corporation v. Harakchand Misirimal Solanki, [(2014) 3 SCC 183]: The Supreme Court distinguished this case, stating that it was not applicable to the present cases due to different facts.
• Indore Development Authority v. Manoharlal & Others Etc., [(2020) 8 SCC 129]: The Supreme Court relied on this case to reject the submission that the absence of a possession report meant that physical possession was not taken.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the fact that possession of the land had been taken and compensation had been paid or deposited. The Court emphasized that Section 24(2) of the Act 2013 was not intended to invalidate acquisitions where these conditions were met. The Court also relied on its previous decision in Indore Development Authority (supra) to clarify that the absence of a possession report does not negate the fact of physical possession.

Logical Reasoning:

The Court considered alternative interpretations but rejected them, emphasizing that the purpose of Section 24(2) was to address situations where neither possession nor compensation had been provided. The Court’s decision was based on a straightforward reading of the provision and the facts of the case, as well as the precedent set by Indore Development Authority (supra).

The Supreme Court held that the High Court’s decision was unsustainable. The Court quashed and set aside the High Court’s judgments and orders, declaring that the acquisition with respect to the lands in question is deemed to have lapsed under Section 24(2) of the Act, 2013. The Court remitted the matters back to the High Court to decide the writ petitions afresh on their own merits on other issues except the applicability of Section 24(2) of the Act, 2013.

“The impugned judgment(s) and order(s) passed by the High Court declaring that the acquisition with respect to the lands in question is deemed to have lapsed under Section 24(2) of the Act, 2013 is/are hereby quashed and set aside.”

“However, the matters are remitted back to the High Court to decide and dispose of the main writ petitions afresh in accordance with law and on their own merits on other issues except the applicability of Section 24(2) of the Act, 2013.”

“There shall not be deemed lapse of acquisition in those cases also as observed and held by the High Court.”

The Court’s decision clarifies that Section 24(2) of the Act 2013 does not apply if possession has been taken and compensation has been paid or deposited. This interpretation has significant implications for future land acquisition cases.

Key Takeaways

• Section 24(2) of the Act 2013 does not apply if possession of the land has been taken and compensation has been paid or deposited.
• The absence of a possession report does not automatically mean that physical possession was not taken.
• High Courts must consider other challenges to land acquisition proceedings under the Act 1894 on their merits, except the applicability of Section 24(2) of the Act, 2013.
• The decision reinforces the importance of factual evidence in determining whether an acquisition has lapsed.

Directions

The Supreme Court directed the High Court to:

• Decide and dispose of the main writ petitions afresh on their own merits on other issues except the applicability of Section 24(2) of the Act, 2013.
• Complete the proceedings preferably within a period of nine months from the date of receipt of the order.

Specific Amendments Analysis

Not Applicable

Development of Law

The ratio decidendi of this case is that Section 24(2) of the Act 2013 does not apply if possession of the land has been taken and compensation has been paid or deposited. This clarifies the interpretation of Section 24(2) and reinforces the position that the provision is intended to address situations where the government has neither taken possession nor paid compensation. This decision reinforces the position of law laid down by the Supreme Court in Indore Development Authority (supra).

Conclusion

The Supreme Court’s judgment in Haryana State Industrial and Infrastructure Development Corporation Ltd. (HSIIDC) & Others vs. M/s Honeywell International (India) Pvt. Ltd. clarifies the scope of Section 24(2) of the Act 2013. The Court held that land acquisitions do not lapse under this provision if possession has been taken and compensation has been paid or deposited. The matters have been remitted back to the High Court to decide other issues on merits. This decision provides much-needed clarity on the interpretation of the Act 2013 and its application to pending land acquisition cases.