Supreme Court on Land Acquisition: Subsequent Purchasers Cannot Challenge Acquisition Lapse (20 January 2023)

Date of the Judgment: 20 January 2023

Citation: 2023 INSC 69

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

Can a person who buys land after it has been acquired by the government challenge that acquisition? The Supreme Court recently addressed this question, clarifying the rights of subsequent purchasers in land acquisition cases. This judgment clarifies that only the original landowners, not subsequent purchasers, can claim a lapse in acquisition proceedings. The bench comprised Justices M.R. Shah and C.T. Ravikumar, with the judgment authored by Justice M.R. Shah.

Case Background

The Delhi Development Authority (DDA) initiated land acquisition proceedings under the Land Acquisition Act, 1894. The original landowners were not paid compensation. Subsequently, the land was purchased by a third party, Asha Prakash (Respondent No. 1). This subsequent purchaser then filed a writ petition before the High Court of Delhi, claiming that the acquisition had lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, because compensation had not been paid to the original landowners.

The High Court of Delhi, relying on previous judgments, ruled in favor of the subsequent purchaser, declaring that the acquisition had indeed lapsed. The DDA, aggrieved by this decision, appealed to the Supreme Court.

Timeline

Course of Proceedings

The High Court of Delhi entertained the writ petition filed by the subsequent purchaser, Asha Prakash, despite objections from the DDA regarding the maintainability of the petition. The High Court relied on the judgment in Government (NCT of Delhi) Vs. Manav Dharam Trust and Anr., (2017) 6 SCC 751, which allowed subsequent purchasers to challenge acquisition proceedings. It then applied the principle from Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183, holding that the acquisition had lapsed due to non-payment of compensation to the original landowners.

The DDA appealed to the Supreme Court, challenging the High Court’s decision on the grounds that a subsequent purchaser does not have the right to challenge the acquisition and that the High Court relied on a judgment that has been overruled.

Legal Framework

The case revolves around the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (Act, 2013), which states:

“(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 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.”

This section provides for the lapse of land acquisition proceedings if certain conditions are met. The Supreme Court also considered the Land Acquisition Act, 1894, particularly Section 31, which deals with the payment of compensation. The court also considered Section 4 of the Land Acquisition Act, 1894, which deals with the notification for land acquisition.

Arguments

Appellant (Delhi Development Authority) Arguments:

• The DDA argued that the High Court erred in entertaining the writ petition of the subsequent purchaser, as such purchasers have no locus standi to challenge the acquisition.
• The DDA contended that the High Court wrongly relied on the judgment in Government (NCT of Delhi) Vs. Manav Dharam Trust and Anr., which has been overruled by subsequent decisions of the Supreme Court.
• The DDA further argued that the High Court’s reliance on Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors. was also incorrect, as this decision was overruled by the Constitution Bench in Indore Development Authority Vs. Manoharlal and Ors.

Respondent (Asha Prakash and Ors.) Arguments:

• The respondent argued that the acquisition proceedings had lapsed under Section 24(2) of the 2013 Act because the compensation was not paid to the original landowners.
• The respondent relied on the High Court’s judgment, which followed the previous rulings of the Supreme Court in Government (NCT of Delhi) Vs. Manav Dharam Trust and Anr. and Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors.

Sub-Submissions:

Issues Framed by the Supreme Court

The Supreme Court addressed the following key issues:

1. Whether a subsequent purchaser of land has the locus standi to challenge the acquisition proceedings under the Land Acquisition Act, 1894, claiming a lapse under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
2. Whether the High Court was correct in relying on the judgments in Government (NCT of Delhi) Vs. Manav Dharam Trust and Anr. and Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors..

Treatment of the Issue by the Court

Authorities

Cases:

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 if compensation is not paid or possession is not taken.
• Section 31 of the Land Acquisition Act, 1894: This section deals with the payment of compensation to the landowners.
• Section 4 of the Land Acquisition Act, 1894: This section deals with the notification for land acquisition.

Judgment

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

How each authority was viewed by the Court?

• Government (NCT of Delhi) Vs. Manav Dharam Trust and Anr., (2017) 6 SCC 751: This case was overruled by subsequent decisions and was held to be not a good law.
• Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183: This case was overruled by the Constitution Bench in Indore Development Authority Vs. Manoharlal and Ors.
• Shiv Kumar and Anr. Vs. Union of India and Ors., (2019) 10 SCC 229: This case was relied upon to establish that a subsequent purchaser has no locus standi to challenge acquisition.
• Delhi Development Authority Vs. Godfrey Philips (I) Ltd. & Ors.: This case was relied upon to establish that a subsequent purchaser has no locus standi to challenge acquisition.
• Delhi Administration Thr. Secretary, Land and Building Department & Ors. Vs. Pawan Kumar & Ors.: This case was relied upon to establish that a subsequent purchaser has no locus standi to challenge acquisition.
• Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129: This case was relied upon as it overruled Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the principle that subsequent purchasers do not have the right to challenge prior land acquisitions. The court emphasized the need to uphold the finality of acquisition proceedings and prevent endless litigation. The sentiment analysis reveals that the Court was strongly driven by legal precedents and the need for consistency in the application of law.

Fact:Law Ratio:

The court’s reasoning was heavily based on legal principles and precedents, with a lesser emphasis on the specific facts of the case.

Logical Reasoning:

The Court rejected the High Court’s reliance on Government (NCT of Delhi) Vs. Manav Dharam Trust and Anr. and Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., as these cases had been overruled. The Court’s reasoning was based on the principle that a subsequent purchaser cannot claim a lapse in acquisition proceedings. The Court stated:

“In the aforesaid decisions, it is specifically observed and held by this Court that the subsequent purchaser has no locus to challenge the acquisition / lapse of acquisition.”

The Court clarified that the decision in Indore Development Authority Vs. Manoharlal and Ors. had overruled the earlier position of law, stating:

“Resultantly, the decision rendered in Pune Municipal Corpn. is hereby overruled and all other decisions in which Pune Municipal Corpn. has been followed, are also overruled.”

The Court also emphasized that:

“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.”

Key Takeaways

• Subsequent purchasers of land do not have the legal standing to challenge prior land acquisition proceedings.
• The Supreme Court has clarified that only original landowners can claim a lapse of acquisition under Section 24(2) of the 2013 Act.
• The judgment reinforces the finality of land acquisition proceedings and prevents frivolous litigation by subsequent purchasers.
• The decision overrules the previous position of the law as laid down in Government (NCT of Delhi) Vs. Manav Dharam Trust and Anr. and Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors.

Directions

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

Specific Amendments Analysis

There is no specific amendment analysis in this judgment.

Development of Law

The ratio decidendi of this case is that a subsequent purchaser of land does not have the locus standi to challenge the acquisition proceedings or claim a lapse of acquisition under Section 24(2) of the 2013 Act. This judgment overrules the previous legal position where subsequent purchasers were allowed to challenge the acquisition, as seen in Government (NCT of Delhi) Vs. Manav Dharam Trust and Anr. and Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors. The judgment reinforces the principle that only original landowners can claim a lapse in acquisition proceedings.

Conclusion

The Supreme Court’s judgment in Delhi Development Authority vs. Asha Prakash and Ors. clarifies that subsequent purchasers of land cannot challenge prior land acquisition proceedings. This decision reinforces the finality of acquisition proceedings and ensures that only original landowners can claim a lapse of acquisition under Section 24(2) of the 2013 Act. The judgment overrules the previous position of law, as laid down in Government (NCT of Delhi) Vs. Manav Dharam Trust and Anr. and Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., providing a clear precedent for future cases.