Supreme Court overturns Delhi High Court on Land Acquisition Lapse: Government of NCT of Delhi vs. Shakeel Ahmed & Ors. (2023) INSC 111, Government of NCT of Delhi vs. Sh. Manish & Anr. (2023) INSC 110, Government of NCT of Delhi vs. Subhash Gupta & Ors. (2023) INSC 112, Govt. of NCT of Delhi & Anr. vs. Sh. Narender & Anr. (2023) INSC 113 (09 February 2023)

Date of the Judgment: 09 February 2023
Citations:

• Government of NCT of Delhi vs. Shakeel Ahmed & Ors. (2023) INSC 111
• Government of NCT of Delhi vs. Sh. Manish & Anr. (2023) INSC 110
• Government of NCT of Delhi vs. Subhash Gupta & Ors. (2023) INSC 112
• Govt. of NCT of Delhi & Anr. vs. Sh. Narender & Anr. (2023) INSC 113

Judges: M.R. Shah, J. and C.T. Ravikumar, J.
Can land acquisition proceedings be deemed to have lapsed if the government has taken possession of the land, but not paid compensation? The Supreme Court of India recently addressed this question, overturning several decisions of the High Court of Delhi. The core issue revolves around the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, and whether the word “or” should be read as “and” or “nor”.

Case Background

These appeals arise from judgments of the High Court of Delhi, which declared that land acquisition proceedings under the Land Acquisition Act, 1894, had lapsed due to non-compliance with Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The High Court, in its decisions, relied on a previous Supreme Court ruling in *Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors.*, which has since been overruled. The Government of NCT of Delhi appealed these decisions, arguing that the High Court’s interpretation was incorrect.

Timeline

Course of Proceedings

The High Court of Delhi, in the cases of *Shakeel Ahmed*, *Sh. Manish*, and *Sh. Narender*, allowed the writ petitions, declaring that the land acquisition proceedings had lapsed under Section 24(2) of the Act, 2013. The High Court relied on the decision in *Pune Municipal Corporation*, which interpreted Section 24(2) to mean that if either possession was not taken or compensation was not paid, the acquisition would lapse. In the case of *Subhash Gupta*, the High Court relied on its earlier decision in *Jagjit Singh and Ors. Vs. Union of India and Ors.*, along with the *Pune Municipal Corporation* judgment, to reach the same conclusion. These decisions were appealed to the Supreme Court.

Legal Framework

The core of the dispute lies in the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. This section 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 Supreme Court also considered the implications of Section 16 of the Land Acquisition Act, 1894, which states that once possession has been taken, the land vests absolutely in the government.

Arguments

The arguments presented before the Supreme Court can be summarized as follows:

Appellant’s Arguments (Government of NCT of Delhi)

• The appellant contended that the High Court erred in relying on the *Pune Municipal Corporation* case, which was specifically overruled by the Constitution Bench in *Indore Development Authority Vs. Manoharlal and Ors.*.

• It was argued that the word “or” in Section 24(2) of the Act, 2013, should be read as “nor” or “and.” This means that for a lapse to occur, both possession must not have been taken *and* compensation must not have been paid.

• The appellant emphasized that in all the cases, possession of the land had been taken, and therefore, the land acquisition proceedings could not be deemed to have lapsed.

• In the case of *Subhash Gupta*, it was argued that the period of stay against taking possession should be excluded while calculating the five-year period under Section 24(2) of the Act, 2013.

Respondent’s Arguments (Landowners)

• The respondents, the original writ petitioners, argued that the land acquisition proceedings had lapsed because possession was not taken or compensation was not paid, based on the High Court’s interpretation of Section 24(2) of the Act, 2013 and the ruling in *Pune Municipal Corporation*.

• They contended that since the physical possession of the land was not taken, and compensation had not been paid, the acquisition proceedings should lapse under Section 24(2) of the Act, 2013.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issue before the court was:

1. Whether the High Court was correct in declaring that the land acquisition proceedings had lapsed under Section 24(2) of the Act, 2013.
2. Whether the word “or” in Section 24(2) of the Act, 2013, should be read as “nor” or “and”.
3. Whether the period of stay of possession should be excluded while calculating the five-year period under Section 24(2) of the Act, 2013.

Treatment of the Issue by the Court

The following table demonstrates how the Court decided the issues:

Authorities

The Supreme Court relied on the following authorities:

Judgment

The Supreme Court allowed the appeals, setting aside the judgments of the High Court. The Court held that the High Court erred in relying on the overruled decision of *Pune Municipal Corporation*. The Supreme Court reiterated the position of law as laid down in *Indore Development Authority*.

The Supreme Court’s reasoning was based on the following:

• The decision in *Pune Municipal Corporation* was specifically overruled by the Constitution Bench in *Indore Development Authority*.

• The Constitution Bench in *Indore Development Authority* clarified that the word “or” in Section 24(2) should be read as “nor” or “and,” meaning that both possession and compensation must be lacking for a lapse to occur.

• Once possession has been taken, the land vests in the State, and there is no divesting under Section 24(2) of the Act, 2013.

• The period of stay of possession has to be excluded for the purpose of Section 24(2) of Act, 2013.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily driven by the need to adhere to the established legal position as laid down by the Constitution Bench in *Indore Development Authority*. The Court emphasized that the interpretation of Section 24(2) of the Act, 2013, should be consistent with this binding precedent. The Court also aimed to ensure that land acquisition proceedings, where possession had been taken, were not unduly invalidated due to an incorrect interpretation of the law. The Court’s focus was on upholding the principle that once possession is taken, the land vests in the State, and there is no provision for divesting it under Section 24(2) of the Act, 2013.

Logical Reasoning

The Supreme Court considered the alternative interpretation of Section 24(2) as adopted by the High Court, which was based on the overruled decision in *Pune Municipal Corporation*. However, the Court rejected this interpretation because it was contrary to the binding precedent set by the Constitution Bench in *Indore Development Authority*. The Court emphasized that the word “or” in Section 24(2) must be read as “nor” or “and” to give effect to the legislative intent and to ensure that land acquisitions where possession has been taken are not invalidated.

The decision was reached by applying the law laid down in *Indore Development Authority*, which clarified the correct interpretation of Section 24(2) of the Act, 2013. The Court held that since possession of the land had been taken in all the cases, the land acquisition proceedings could not be deemed to have lapsed.

The Court’s decision is clear and accessible, emphasizing the importance of following binding precedents. The key reasons for the decision are:

• The High Court incorrectly relied on the overruled decision in *Pune Municipal Corporation*.

• The correct interpretation of Section 24(2), as clarified in *Indore Development Authority*, requires both non-possession and non-payment of compensation for a lapse.

• Once possession is taken, the land vests in the State, and there is no divesting under Section 24(2) of the Act, 2013.

• The period of stay of possession has to be excluded for the purpose of Section 24(2) of Act, 2013.

The Supreme Court quoted the following from the *Indore Development Authority* judgment:

“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.”

“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 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.”

There was no dissenting opinion in these cases. The bench consisted of two judges, both of whom agreed on the judgment.

The Supreme Court’s decision has significant implications for future cases involving land acquisition under the Act, 2013. It clarifies that the interpretation of Section 24(2) must be consistent with the ruling in *Indore Development Authority*, and that once possession has been taken, the land vests in the State, and there is no divesting under Section 24(2) of the Act, 2013. This will prevent landowners from claiming a lapse in acquisition proceedings where possession has already been taken, even if compensation has not been paid.

The Supreme Court did not introduce any new doctrines or legal principles but reaffirmed the existing principles laid down in *Indore Development Authority*.

Key Takeaways

• 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”.

• For land acquisition proceedings to lapse under Section 24(2), both possession must not have been taken *and* compensation must not have been paid.

• Once possession of land is taken by the government, the land vests in the State, and there is no provision for divesting it under Section 24(2) of the Act, 2013.

• The period of stay of possession has to be excluded for the purpose of Section 24(2) of Act, 2013.

• The decision in *Pune Municipal Corporation* has been overruled and should not be followed.

Directions

The Supreme Court did not issue any specific directions other than allowing the appeals and setting aside the High Court’s judgments.

Development of Law

The ratio decidendi of the case is that Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 requires both non-possession and non-payment of compensation for the land acquisition proceedings to lapse. This decision reinforces the position of law as clarified in *Indore Development Authority*, and overrules the earlier position taken in *Pune Municipal Corporation*.

Conclusion

The Supreme Court’s judgment in these cases clarifies the correct 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 High Court erred in relying on the overruled decision of *Pune Municipal Corporation*. The Supreme Court reiterated the position of law as laid down in *Indore Development Authority*, emphasizing that both non-possession and non-payment of compensation are required for land acquisition proceedings to lapse. This decision ensures consistency in the application of the law and prevents unwarranted challenges to land acquisitions where possession has already been taken by the government.