Supreme Court clarifies land acquisition lapse under Section 24(2) of the 2013 Act: NCT of Delhi vs. Subhash Chander Khatri (2023)

Date of the Judgment: April 10, 2023
Citation: Civil Appeal No. 1987 of 2023 (@ Special Leave Petition (Civil) No. 6169 of 2023) (@ Diary No.37735 of 2022)
Judges: M.R. Shah, J. and C.T. Ravikumar, J.
Can land acquisition proceedings be deemed to have lapsed if the compensation has not been paid, even if possession of the land has been taken? The Supreme Court of India addressed this crucial question in a recent case concerning 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”). The court clarified that if possession of the land has been taken, the acquisition proceedings do not lapse, even if compensation is pending. This judgment has significant implications for land acquisition disputes across the country. The bench comprised Justice M.R. Shah and Justice C.T. Ravikumar, with the judgment authored by Justice M.R. Shah.

Case Background

The case revolves around a dispute concerning land acquisition in Delhi. The Land and Building Department of the National Capital Territory (NCT) of Delhi initiated acquisition proceedings for certain land. The High Court of Delhi, in its judgment dated January 15, 2018, had ruled that the acquisition of the land was deemed to have lapsed under Section 24(2) of the Act, 2013, because the compensation had not been paid. However, the High Court also noted that the land had already been put to use by the beneficiary department, and therefore, the original writ petitioner was entitled to compensation under the Act, 2013. The NCT of Delhi and other authorities appealed this decision to the Supreme Court.

Timeline

Course of Proceedings

The High Court of Delhi, in its decision, relied on the Supreme Court’s judgment in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors. [(2014) 3 SCC 183], holding that the acquisition proceedings had lapsed due to non-payment of compensation. The High Court, however, acknowledged that the land was already in use by the department and directed that the original writ petitioner be compensated under the Act, 2013. The NCT of Delhi appealed this decision, arguing that the acquisition should not be deemed to have lapsed since possession had been taken.

Legal Framework

The central legal issue 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. The Supreme Court referred to the following extract from Section 24 of the Act, 2013:

“24. Land acquisition process under Act No. 1 of 1894 shall be deemed to have lapsed in certain cases. –
(1) Notwithstanding anything contained in this Act, in any case of land acquisition proceedings initiated under the Land Acquisition Act, 1894 (1 of 1894),–
(a) where no award under section 11 of the said Land Acquisition Act has been made, then, all provisions of this Act relating to the determination of compensation shall apply; or
(b) where an award under said section 11 has been made, then such proceedings shall continue under the provisions of the said Land Acquisition Act, as if the said Act has not been repealed.
(2) 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 section 11 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 Court also discussed Section 31(1) of the Land Acquisition Act, 1894, which deals with the tendering of compensation to the landowners.

The Supreme Court also discussed Section 16 of the Land Acquisition Act, 1894, which deals with the taking of possession of the land.

Arguments

The appellant, the NCT of Delhi, argued that the High Court erred in applying Section 24(2) of the Act, 2013. The appellant contended that since the possession of the land had already been taken and the land was put to use before the 2013 Act came into force, the acquisition proceedings could not be deemed to have lapsed. The appellant relied on the Supreme Court’s decision in Indore Development Authority Vs. Manoharlal and Ors. [(2020) 8 SCC 129], which clarified the interpretation of Section 24(2).

The respondent, the original writ petitioner, argued that since compensation had not been paid, the acquisition should be deemed to have lapsed under Section 24(2) of the Act, 2013. The respondent sought compensation as per the 2013 Act.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in the judgment. However, the main issue before the court was:

1. 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 possession of the land has been taken, but compensation has not been paid.

Treatment of the Issue by the Court

Authorities

The Supreme Court relied on the following authorities:

• Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors. [(2014) 3 SCC 183] – Supreme Court of India: This case was relied upon by the High Court to hold that the acquisition had lapsed, but the Supreme Court distinguished this case in its judgment.
• Indore Development Authority Vs. Manoharlal and Ors. [(2020) 8 SCC 129] – Supreme Court of India: This case was the primary authority relied upon by the Supreme Court to clarify the interpretation of Section 24(2) of the Act, 2013.

Judgment

The Supreme Court, in its judgment, referred to the decision in Indore Development Authority Vs. Manoharlal and Ors. [(2020) 8 SCC 129], specifically paragraph 366, which clarified the interpretation of Section 24(2) of the Act, 2013. The Court emphasized that the word “or” in Section 24(2) should be read as “nor” or “and.” Therefore, for a deemed lapse of land acquisition proceedings to occur, both conditions must be met: (1) possession of the land has not been taken, and (2) compensation has not been paid. If either of these conditions is not met, the acquisition does not lapse.

The Court noted that in this case, the possession of the land had already been taken and the land was put to use by the department. Therefore, even if compensation had not been paid, the acquisition proceedings could not be deemed to have lapsed. The Court stated:

“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 further clarified that the expression “paid” in Section 24(2) does not include a deposit of compensation in court. The obligation to pay is complete when the amount is tendered under Section 31(1) of the Land Acquisition Act, 1894.

The Supreme Court then stated:

“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).”

The Supreme Court set aside the High Court’s judgment and dismissed the original writ petition.

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 in Indore Development Authority Vs. Manoharlal and Ors. [(2020) 8 SCC 129]. The Court emphasized the importance of the literal and contextual interpretation of legal provisions. The fact that the land had already been taken into possession and put to use by the department was a crucial factor in the Court’s decision. The Court also aimed to provide clarity and consistency in the application of land acquisition laws, preventing any ambiguity that could lead to unnecessary litigation. The court’s reasoning was also influenced by the need to prevent the revival of stale claims and to ensure that concluded proceedings are not reopened.

Logical Reasoning

Key Takeaways

• The Supreme Court clarified that the word “or” in Section 24(2) of the Act, 2013, should be read as “nor” or “and.”
• If possession of the land has been taken, the acquisition proceedings do not lapse, even if compensation has not been paid.
• The judgment in Indore Development Authority Vs. Manoharlal and Ors. [(2020) 8 SCC 129] was upheld.
• This decision provides clarity on the interpretation of Section 24(2) of the Act, 2013, and prevents the revival of stale claims.

Directions

The Supreme Court set aside the judgment of the High Court and dismissed the original writ petition.

Development of Law

The ratio decidendi of this case is that the word “or” in Section 24(2) of the Act, 2013, should be read as “nor” or “and,” meaning that for a deemed lapse of land acquisition proceedings to occur, both conditions must be met: (1) possession of the land has not been taken, and (2) compensation has not been paid. This clarifies the position of law and reinforces the interpretation given in Indore Development Authority Vs. Manoharlal and Ors. [(2020) 8 SCC 129].

Conclusion

The Supreme Court’s judgment in the case of NCT of Delhi vs. Subhash Chander Khatri 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 if possession of the land has been taken, the acquisition proceedings do not lapse, even if compensation has not been paid. This decision reinforces the legal position established in Indore Development Authority Vs. Manoharlal and Ors. [(2020) 8 SCC 129] and provides much-needed clarity on this issue.