Supreme Court Overturns Delhi High Court on Land Acquisition Lapse: Govt. of NCT of Delhi vs. Shiv Dutt Sharma (24 November 2022)

Date of the Judgment: 24 November 2022

Citation: 2022 INSC 1008

Judges: M.R. Shah, J. and M.M. Sundresh, J.

Can land acquisition be deemed to have lapsed if the government has taken possession of the land but not paid compensation to the landowner? This was the core issue before the Supreme Court in this case. The Court examined the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, specifically addressing whether the word “or” should be read as “and” or “nor.” The Supreme Court, in this case, overturned the High Court’s decision, clarifying the conditions under which land acquisition proceedings can lapse. The judgment was delivered by a two-judge bench comprising Justice M.R. Shah and Justice M.M. Sundresh, with Justice M.R. Shah authoring the opinion.

Case Background

The case revolves around a land acquisition dispute where the High Court of Delhi had ruled that the acquisition of land had lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (the “Act, 2013”). The High Court based its decision on the fact that although the government had taken possession of the land, it had not paid compensation to the original landowner. The land in question was reportedly occupied by encroachers, with the area known as ‘Sanjay Mohalla.’ The Land Acquisition Collector asserted that possession had been taken on 21.06.1973, but compensation was not paid to the recorded owner. The High Court had relied on the Supreme Court’s decision in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors. (2014) 3 SCC 183, which was later overruled.

Timeline

Course of Proceedings

The High Court of Delhi, in its judgment, had allowed the writ petition filed by the respondent No.1, declaring that the land acquisition had lapsed under Section 24(2) of the Act, 2013. This decision was based on the premise that the compensation had not been paid to the original writ petitioner, even though the possession of the land had been taken over by the government. The High Court relied on the decision in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors. (2014) 3 SCC 183. Aggrieved by this decision, the Government of NCT of Delhi and the Land Acquisition Collector appealed to the Supreme Court.

Legal Framework

The case primarily 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 also considered the interpretation of the word “or” in the provision, specifically whether it should be read as “nor” or “and.”

Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement 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…”

The Supreme Court also discussed Section 31 of the Land Acquisition Act, 1894, regarding the payment of compensation.

Arguments

Arguments by the Appellants (Govt. of NCT of Delhi and Land Acquisition Collector):

• The appellants argued that the High Court erred in relying on the decision in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors. (2014) 3 SCC 183, which had been specifically overruled by a Constitution Bench of the Supreme Court in Indore Development Authority Vs. Manoharlal and Ors. (2020) 8 SCC 129.
• They contended that the possession of the land had been taken, as asserted in the counter-affidavit filed by the Land Acquisition Collector.
• The appellants submitted that even if there were illegal occupants or encroachers, it did not negate the fact that possession had been taken by the government.
• They argued that the landowner could still benefit from the encroachments on the land.

Arguments by the Respondent (Shiv Dutt Sharma):

• The respondent argued that the actual possession of the land had not been taken because the land was occupied by encroachers and was known as ‘Sanjay Mohalla.’
• The respondent contended that since the compensation had not been paid, the land acquisition proceedings should be deemed to have lapsed under Section 24(2) of the Act, 2013.

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was:

1. Whether the High Court was correct in holding that the acquisition had lapsed under Section 24(2) of the Act, 2013, based on the non-payment of compensation, despite the government having taken possession of the land.
2. Whether the word “or” in Section 24(2) should be read as “and” or “nor”.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

Judgment

How each authority was viewed by the Court?

• The Supreme Court specifically overruled the decision in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors. (2014) 3 SCC 183, stating that it was no longer good law, based on the decision of the Constitution Bench in Indore Development Authority Vs. Manoharlal and Ors. (2020) 8 SCC 129.
• The decision in Indore Development Authority Vs. Manoharlal and Ors. (2020) 8 SCC 129 was relied upon, which clarified that the word “or” in Section 24(2) should be read as “nor” or “and”. This meant that if either possession was taken or compensation was paid, the acquisition would not lapse.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to correct the High Court’s reliance on an overruled judgment and to provide a clear interpretation of Section 24(2) of the Act, 2013. The court emphasized that the purpose of the Act was not to invalidate acquisitions where either possession was taken or compensation was paid. The court also considered the fact that the Land Acquisition Collector had asserted that possession had been taken, and that the presence of encroachers did not negate this fact.

Logical Reasoning:

The court considered the alternative interpretation that the word “or” in Section 24(2) should be read literally, meaning that the acquisition would lapse if either possession was not taken or compensation was not paid. However, the court rejected this interpretation, relying on the Constitution Bench decision in Indore Development Authority Vs. Manoharlal and Ors. (2020) 8 SCC 129, which clarified that “or” should be read as “nor” or “and”. The court reasoned that the intention of the law was not to invalidate acquisitions where either of the two conditions were met.

The Supreme Court concluded that the High Court’s judgment was unsustainable and should be set aside. The court held that since the possession of the land had been taken, the acquisition proceedings did not lapse, even if compensation had not been paid. The court emphasized that the High Court had relied on a judgment that had been specifically overruled by a larger bench of the Supreme Court.

The Court quoted from the judgment:

“Resultantly, the decision rendered in Pune Municipal Corpn. [Pune Municipal Corpn. v. Harakchand Misirimal Solanki, (2014) 3 SCC 183] is hereby overruled and all other decisions in which Pune Municipal Corpn. [Pune Municipal Corpn. v. Harakchand Misirimal Solanki, (2014) 3 SCC 183] has been followed, are also overruled.”

“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.”

“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.”

Key Takeaways

• The Supreme Court clarified that for land acquisition proceedings under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, the word “or” should be read as “nor” or “and”.
• If either possession of the land has been taken or compensation has been paid, the acquisition proceedings do not lapse.
• The decision in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors. (2014) 3 SCC 183 has been overruled and is no longer a valid precedent.
• This judgment reinforces the principle that once possession is taken by the government, the acquisition process is considered valid, even if compensation has not been paid.

Directions

The Supreme Court allowed the appeals and set aside the impugned judgment and order passed by the High Court. The court clarified that the issue of regularization of encroachment on the land was not a subject matter before it and would be decided by the appropriate court.

Development of Law

The ratio decidendi of this case is that 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 interpreted as “nor” or “and”. This means that land acquisition proceedings will only lapse if neither possession has been taken nor compensation has been paid. This decision clarifies and solidifies the position of law established in Indore Development Authority Vs. Manoharlal and Ors. (2020) 8 SCC 129, and overrules the previous position held in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors. (2014) 3 SCC 183.

Conclusion

In conclusion, the Supreme Court’s decision in Govt. of NCT of Delhi and Anr. vs. Shiv Dutt Sharma and Anr. 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 the word “or” in the provision should be read as “nor” or “and,” meaning that land acquisition proceedings will only lapse if neither possession has been taken nor compensation has been paid. This judgment overrules the previous position established in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors. (2014) 3 SCC 183, which had been relied upon by the High Court. The Supreme Court’s ruling provides clarity on the conditions for the lapse of land acquisition proceedings and reinforces the importance of the government’s possession of the land in the acquisition process.