Supreme Court Overturns High Court on Land Acquisition Lapse: Government of NCT of Delhi vs. Krishna Saini (2 December 2022)

Date of the Judgment: 2 December 2022

Citation: Civil Appeal No. 8933 of 2022 (@ SLP (C) No. 21816 of 2022) (@ Diary No. 25683 of 2022)

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

Can land acquisition proceedings be deemed to have lapsed simply because compensation wasn’t paid, even if the government has already taken possession of the land? The Supreme Court recently addressed this question, clarifying the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. This case involved the Government of NCT of Delhi appealing against a High Court decision that had ruled in favor of landowners, declaring that the land acquisition had lapsed due to non-payment of compensation. The Supreme Court bench, comprising Justices M.R. Shah and C.T. Ravikumar, overturned the High Court’s decision.

Case Background

The case revolves around a land acquisition dispute where the High Court of Delhi had previously ruled that the acquisition proceedings had lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (Act, 2013). The High Court’s decision was based on the fact that compensation had not been tendered to the landowners, even though the Government of NCT of Delhi claimed to have taken possession of the land on 5 September 2002. The High Court relied on a previous Supreme Court judgment in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183, which had held that non-payment of compensation would lead to the lapse of acquisition proceedings.

The Government of NCT of Delhi, being the appellant, challenged this decision, arguing that the High Court’s reliance on the Pune Municipal Corporation case was misplaced because that judgment had been overruled by a Constitution Bench of the Supreme Court in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129.

Timeline

Course of Proceedings

The High Court of Delhi, in its judgment, had declared that the land acquisition proceedings under the Land Acquisition Act, 1894, had lapsed due to non-compliance with Section 24(2) of the Act, 2013. The High Court based its decision on the precedent set by the Supreme Court in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183, which stated that if compensation was not tendered, the acquisition would lapse. The Government of NCT of Delhi then appealed to the Supreme Court, arguing that the Pune Municipal Corporation judgment had been overruled.

Legal Framework

The core 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 initiated under the Land Acquisition Act, 1894. Section 24(2) 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 interpretation of the word “or” in the phrase “possession of the land has not been taken or the compensation has not been paid,” as well as the implications of non-payment of compensation.

Arguments

Appellant (Government of NCT of Delhi):

• The primary argument of the Government of NCT of Delhi was that the High Court’s decision was based on the overruled judgment of Pune Municipal Corporation.
• The appellant contended that the Constitution Bench of the Supreme Court in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129, had specifically overruled the Pune Municipal Corporation case.
• The appellant argued that the word “or” in Section 24(2) of the Act, 2013 should be read as “nor” or “and,” meaning that the acquisition would lapse only if both possession had not been taken and compensation had not been paid.
• The appellant highlighted that the possession of the land was taken on 05.09.2002 and hence the acquisition proceedings cannot be deemed to have lapsed.

Respondent (Landowners):

• The landowners argued that since compensation had not been tendered, the acquisition proceedings should be deemed to have lapsed under Section 24(2) of the Act, 2013.
• The respondents relied on the High Court’s judgment, which had followed the decision in Pune Municipal Corporation.

Submissions

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section, but the core issue it addressed was:

1. Whether the High Court was correct in relying on the decision in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183, which had been overruled by the Constitution Bench of the Supreme Court in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129.

Treatment of the Issue by the Court

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

Authorities

The Supreme Court considered the following authorities:

Judgment

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

How each authority was viewed by the Court?

• The Supreme Court noted that the High Court had relied on Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183*, which was specifically overruled by the Constitution Bench in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129*. The Court held that the Pune Municipal Corporation case was no longer a valid precedent.
• The Supreme Court followed the interpretation of Section 24(2) given in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129*, which clarified that the word “or” in Section 24(2) should be read as “nor” or “and.”

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the fact that the High Court had relied on a judgment that had been explicitly overruled by a larger bench of the same court. The Court emphasized the binding nature of the Constitution Bench’s decision in Indore Development Authority, which had clarified the correct interpretation of Section 24(2) of the Act, 2013. The Court also stressed that the word “or” in the provision should be read as “nor” or “and,” meaning that both non-possession and non-payment of compensation were required for the acquisition proceedings to lapse.

Fact:Law Ratio

The Supreme Court’s reasoning was heavily based on the legal interpretation of Section 24(2) and the binding precedent set by the Constitution Bench. The factual aspect of the case, i.e., whether possession was taken, was a secondary consideration.

The Supreme Court considered the interpretation of Section 24(2) of the Act, 2013 and the binding nature of the Constitution Bench’s decision in Indore Development Authority. The Court rejected the interpretation that non-payment of compensation alone would lead to the lapse of acquisition proceedings if possession had already been taken.

The Court stated:

“The decision of this Court in the case of Pune Municipal Corporation and Anr. (supra) , which has been relied upon by the High Court while passing the impugned judgment and order has been specifically overruled by the Constitution Bench of this Court in the case of Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129.”

The Court also quoted 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. 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’s decision was primarily based on the legal principle of following binding precedents and the correct interpretation of the statutory provision.

Key Takeaways

• The Supreme Court clarified that for land acquisition proceedings to lapse under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, both possession must not have been taken AND compensation must not have been paid.
• The word “or” in Section 24(2) should be read as “nor” or “and.”
• The judgment in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183, is no longer a valid precedent on this issue, having been overruled by Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129.
• If possession of the land has been taken, the acquisition proceedings do not lapse, even if compensation has not been paid.

Directions

The Supreme Court did not provide any specific directions other than setting aside the High Court’s judgment.

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 must be read as “nor” or “and.” This means that for land acquisition proceedings to lapse, both possession must not have been taken and compensation must not have been paid. This decision clarifies the position of law and overrules the previous interpretation that non-payment of compensation alone could cause the lapse of acquisition proceedings. This case reinforces the position of law settled by Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129.

Conclusion

The Supreme Court’s decision in Government of NCT of Delhi vs. Krishna Saini & Ors. 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 emphasized that the word “or” in the provision should be read as “nor” or “and,” meaning that both non-possession and non-payment of compensation are required for the acquisition proceedings to lapse. This judgment overturns the High Court’s decision and aligns with the precedent set by the Constitution Bench in Indore Development Authority, providing clarity on the conditions under which land acquisition proceedings lapse.