Supreme Court Clarifies Land Acquisition Lapse Under Section 24(2) of the 2013 Act: Land Acquisition Collector vs. Ashok Kumar (2023)

Date of the Judgment: March 13, 2023
Citation: (2023) INSC 229
Judges: M.R. Shah, J. and C.T. Ravikumar, J.

Can a land acquisition be deemed to have lapsed if the authorities could not take possession of the land due to a court-issued stay order? The Supreme Court of India 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 held that the period during which a stay order is in effect must be excluded when calculating the five-year period for deemed lapse of acquisition. This judgment has significant implications for land acquisition proceedings across the country.

Case Background

The case involves an appeal against a judgment by the High Court of Delhi at New Delhi, which had declared that the acquisition of certain land had lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (hereinafter referred to as “Act, 2013”). The High Court had ruled in favor of the landowners, stating that neither possession of the land had been taken nor compensation had been paid.

Timeline:

Course of Proceedings

The High Court of Delhi, in its judgment, declared that the land acquisition had lapsed based on the fact that neither possession had been taken nor compensation had been paid. The High Court relied on the Supreme Court’s decision in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183 and its own decision in Gyanender Singh & Ors. Vs. Union of India & Ors. The Land Acquisition Collector & Anr. then appealed to the Supreme Court against this decision.

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 under certain conditions.

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:
Provided that where an award has been made and compensation in respect of a majority of land holdings has not been deposited in the account of the beneficiaries, then, all beneficiaries specified in the notification for acquisition under section 4 of the said Land Acquisition Act, shall be entitled to compensation in accordance with the provisions of this Act.”

The Supreme Court also considered Section 16 of the Land Acquisition Act, 1894, which deals with the taking of possession of land after an award has been made.

Arguments

The appellants (Land Acquisition Collector & Anr.) argued that the High Court erred in declaring the acquisition lapsed. They contended that the physical possession of the land could not be taken due to a stay order issued by the court, which was in effect until January 1, 2014, when the 2013 Act came into force.

The respondents (landowners) argued that since neither possession of the land was taken nor compensation was paid, the acquisition should be deemed to have lapsed under Section 24(2) of the 2013 Act. They relied on the High Court’s interpretation of the law.

The innovativeness of the argument lies in the appellant’s reliance on the Constitution Bench judgment of Indore Development Authority 2Vs. Manoharlal and Ors., (2020) 8 SCC 129 to argue that the period of stay should be excluded from calculating the five-year period for the deemed lapse.

Issues Framed by the Supreme Court

The Supreme Court addressed the following issue:

✓ Whether the acquisition of land should be deemed to have lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, when the authorities could not take physical possession of the land due to a court-issued stay order.

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:

The Supreme Court also considered the following 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 land acquisition proceedings under certain conditions.
• Section 16 of the Land Acquisition Act, 1894: This section deals with the taking of possession of land after an award has been made.

Judgment

The Supreme Court allowed the appeal, setting aside the High Court’s judgment. The Court held that the period during which a stay order is in effect must be excluded when calculating the five-year period for deemed lapse of acquisition under Section 24(2) of the 2013 Act.

The Court specifically noted that the decision in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183 had been overruled by the Constitution Bench in Indore Development Authority 2Vs. 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 interpretation of Section 24(2) of the 2013 Act as clarified by the Constitution Bench in Indore Development Authority 2Vs. Manoharlal and Ors., (2020) 8 SCC 129. The Court emphasized that the period during which a stay order is in operation should be excluded from the calculation of the five-year period for deemed lapse. The Court’s reasoning focused on the fact that the authorities were prevented from taking possession due to the stay order, and it would be unjust to penalize them for not taking possession when they were legally restrained from doing so.

The Court’s reasoning is based on the interpretation of Section 24(2) of the Act, 2013, as clarified by the Constitution Bench in Indore Development Authority 2Vs. Manoharlal and Ors., (2020) 8 SCC 129. The Court held that the word “or” in Section 24(2) between possession and compensation has to be read as “nor” or as “and”. The Court also held that the deemed lapse of land acquisition proceedings 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 Supreme Court quoted the following from Indore Development Authority 2Vs. Manoharlal and Ors., (2020) 8 SCC 129:

“366.3. 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.”

“366.8. The provisions of Section 24(2) providing
for a deemed lapse of proceedings are applicable in
case authorities have failed due to their inaction to take
possession and pay compensation for five years or
more before the 2013 Act came into force, in a
proceeding for land acquisition pending with the
authority concerned as on 1-1-2014. The period of
subsistence of interim orders passed by court has to
be excluded in the computation of five years.”

The Court also observed that the High Court’s reliance on Pune Municipal Corporation (supra) was incorrect as that judgment had been overruled. The Court also stated that the High Court’s decision in Gyanender Singh (supra) was contrary to the decision of the Supreme Court in Indore Development Authority (supra).

Key Takeaways

• The period during which a court-issued stay order is in effect must be excluded when calculating the five-year period for deemed lapse of acquisition under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
• Land acquisition proceedings will not lapse if the authorities were unable to take possession of the land due to a court-issued stay order.
• The Supreme Court’s decision in Indore Development Authority 2Vs. Manoharlal and Ors., (2020) 8 SCC 129 provides the correct interpretation of Section 24(2) of the 2013 Act.

Directions

The Supreme Court set aside the High Court’s judgment and dismissed the original writ petition, clarifying that there shall be no deemed lapse of the acquisition with respect to the land in question under Section 24(2) of the Act, 2013.

Development of Law

The ratio decidendi of this case is that the period of stay order has to be excluded while calculating the five year period for deemed lapse under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. This clarifies the position of law laid down in Indore Development Authority 2Vs. Manoharlal and Ors., (2020) 8 SCC 129 and overrules Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183.

Conclusion

The Supreme Court’s judgment in this case clarifies the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, specifically regarding the exclusion of stay periods. This ruling ensures that land acquisition proceedings are not deemed to have lapsed when authorities are prevented from taking possession due to court orders.