Supreme Court Overturns High Court on Land Acquisition Lapse for Subsequent Purchasers: Delhi Development Authority vs. Narendra Kumar Jain (2023)

Introduction

Date of the Judgment: May 4, 2023

Citation: 2023 INSC 501

Judges: Justice M.R. Shah and Justice Ahsanuddin Amanullah

Can a person who buys land after it has been acquired by the government claim that the acquisition has lapsed? The Supreme Court of India recently addressed this question, clarifying the rights of subsequent purchasers in land acquisition cases. The core issue revolves around whether a subsequent purchaser can invoke Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (the “Act, 2013”) to argue that the acquisition of land has lapsed due to non-payment of compensation or failure to take possession. The Supreme Court bench comprised Justice M.R. Shah and Justice Ahsanuddin Amanullah.

Case Background

The Delhi Development Authority (DDA) initiated land acquisition proceedings. The original landowners were not the ones who filed the writ petition. The respondents in this appeal are subsequent purchasers of the land. The respondents filed a writ petition before the High Court of Delhi, claiming that the land acquisition had lapsed under Section 24(2) of the Act, 2013. They argued that they had not received compensation, and possession had not been taken by the acquiring authority. The High Court, relying on a previous Supreme Court decision, ruled in favor of the subsequent purchasers. This decision was challenged by the DDA before the Supreme Court.

Timeline

Course of Proceedings

The High Court of Delhi allowed the writ petition filed by the subsequent purchasers, holding that the land acquisition had lapsed under Section 24(2) of the Act, 2013. The High Court relied on the Supreme Court’s decision in Govt. of NCT of Delhi Vs. Manav Dharma Trust (2017) 6 SCC 751, which held that subsequent purchasers have the locus to challenge the acquisition and claim a lapse. However, the Supreme Court in this case noted that the decision in Manav Dharma Trust was overruled by subsequent decisions.

Legal Framework

The core legal provision in this case is 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.”

This provision essentially allows for the lapse of land acquisition proceedings if certain conditions are met: (1) the award was made five years or more before the commencement of the Act of 2013; and (2) either physical possession of the land has not been taken or compensation has not been paid.

Arguments

The Delhi Development Authority (DDA) argued that the High Court erred in relying on the Manav Dharma Trust case, which has been subsequently overruled. The DDA contended that subsequent purchasers of land have no locus standi to challenge the acquisition proceedings or claim a lapse under Section 24(2) of the Act, 2013.

The respondents, on the other hand, argued that the acquisition had lapsed because the compensation had not been paid/tendered to the original owners, and possession had not been taken. They relied on the High Court’s ruling based on the Manav Dharma Trust case, which had stated that subsequent purchasers could also claim a lapse in acquisition.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues. However, the core issue before the Court was:

• Whether a subsequent purchaser of land has the locus standi to challenge the acquisition proceedings and claim a lapse under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013?

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Judgment

The Supreme Court held that the High Court’s reliance on Manav Dharma Trust was incorrect as that decision was overruled by the subsequent decisions in Shiv Kumar & Anr. Vs. Union of India & Ors. [CITATION] and Delhi Development Authority Vs. Godfrey Philips (I) Ltd. & Ors. [CITATION]. The Court stated that “the subsequent purchaser has no locus to challenge the acquisition and/or pray for deemed lapse of acquisition.” The Court emphasized that only the original landowners can claim a lapse in acquisition under Section 24(2) of the Act, 2013.

The Court quashed and set aside the High Court’s judgment and allowed the appeal by the Delhi Development Authority.

“In the case of Shiv Kumar (supra) and Godfrey Philips (I) Ltd. (supra), it is specifically observed and held that the subsequent purchaser has no locus to challenge the acquisition and/or pray for deemed lapse of acquisition.”

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the legal principle that subsequent purchasers do not have the locus standi to challenge land acquisition proceedings. The Court emphasized the importance of adhering to established legal precedents, particularly the decisions in Shiv Kumar & Anr. Vs. Union of India & Ors. and Delhi Development Authority Vs. Godfrey Philips (I) Ltd. & Ors., which had already clarified this point. The Court’s reasoning focused on the legal position that the right to claim a lapse in acquisition under Section 24(2) of the Act, 2013 is vested only in the original landowners, and not in those who purchase the land after the acquisition process has begun.

Key Takeaways

• Only original landowners, and not subsequent purchasers, can claim a lapse in land acquisition under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
• The Supreme Court has reaffirmed that subsequent purchasers do not have the locus standi to challenge acquisition proceedings.
• The decision in Govt. of NCT of Delhi Vs. Manav Dharma Trust has been definitively overruled on this point.
• This judgment provides clarity on the rights of subsequent purchasers in land acquisition cases.

Directions

No specific directions were issued by the Supreme Court in this case. The Court simply quashed the High Court’s judgment.

Specific Amendments Analysis

There was no specific amendment discussed in this case.

Development of Law

The Supreme Court’s decision reinforces the legal position that subsequent purchasers do not have the right to challenge land acquisition proceedings or claim a lapse under Section 24(2) of the Act, 2013. This decision clarifies the law and establishes that the right to claim a lapse in acquisition is vested only in the original landowners. The ratio decidendi of the case is that subsequent purchasers do not have the locus standi to challenge the acquisition and/or pray for deemed lapse of acquisition under Section 24(2) of the Act, 2013. This case reaffirms the position of law established in Shiv Kumar & Anr. Vs. Union of India & Ors. and Delhi Development Authority Vs. Godfrey Philips (I) Ltd. & Ors.

Conclusion

In conclusion, the Supreme Court’s judgment in Delhi Development Authority vs. Narendra Kumar Jain & Ors. clarifies that subsequent purchasers of land do not have the legal standing to challenge land acquisition proceedings or claim a lapse under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The Court overturned the High Court’s decision, emphasizing that the right to claim a lapse in acquisition is vested only in the original landowners. This decision reinforces the legal position established in previous Supreme Court judgments and provides much-needed clarity on the rights of subsequent purchasers in land acquisition cases.