Supreme Court Reconsiders the Proviso of Section 24 of the Right to Fair Compensation Act in Land Acquisition Cases: Delhi Development Authority vs. Virender Lal Bahri (27 February 2019)

Date of the Judgment: 27 February 2019
The Supreme Court of India is revisiting a crucial aspect of land acquisition law. The central question revolves around the interpretation of a proviso within Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. Specifically, the court is examining whether this proviso applies to Section 24(1)(b), which deals with compensation under the old Land Acquisition Act of 1894, or to Section 24(2), which concerns the lapsing of land acquisition proceedings. This re-examination is prompted by conflicting interpretations from the High Court of Delhi and a Division Bench of the Supreme Court. The judges presiding over this case are Justice R.F. Nariman and Justice Vineet Saran.

Case Background

The core issue stems from differing interpretations of Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (referred to as “the 2013 Act”). The Delhi High Court, in its judgment in Tarun Pal Singh v. Lieutenant Governor, Government of NCT of Delhi and Ors., held that the proviso in Section 24 applied to Section 24(1)(b). This interpretation was followed in several other judgments of the same High Court. However, a Division Bench of the Supreme Court in Delhi Metro Rail Corporation v. Tarun Pal Singh, took a contrary view, stating that the proviso applies to Section 24(2) and not Section 24(1)(b). This discrepancy led to the current review by the Supreme Court. The Delhi Development Authority (DDA) filed appeals against the High Court’s judgments, while the respondents argue that the Supreme Court’s Division Bench judgment requires reconsideration.

Timeline

Course of Proceedings

The High Court of Delhi, in Tarun Pal Singh, ruled that the proviso in Section 24 of the 2013 Act was applicable to Section 24(1)(b). This interpretation was consistently followed in subsequent judgments by the same High Court. However, the Supreme Court’s Division Bench in Delhi Metro Rail Corporation, overturned this view, stating that the proviso was related to Section 24(2). This conflict in interpretation led to the current matter being placed before the Supreme Court for clarification. The DDA appealed against the High Court’s decisions, while the respondents argued for a re-evaluation of the Supreme Court’s Division Bench ruling.

Legal Framework

The case primarily revolves around the interpretation of Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. This Act repealed the Land Acquisition Act, 1894. Section 114 of the 2013 Act states:

“114. Repeal and saving.—(1) The Land Acquisition Act, 1894 (1 of 1894) is hereby repealed. (2) Save as otherwise provided in this Act the repeal under sub-section (1) shall not be held to prejudice or affect the general application of Section 6 of the General Clauses Act, 1897 (10 of 1897) with regard to the effect of repeals.”

Section 24 of the 2013 Act outlines the conditions under which land acquisition proceedings under the 1894 Act are deemed to have lapsed. It reads:

“24. Land acquisition process under Act No. 1 of 1894 shall be deemed to have lapsed in certain cases.—(1) Notwithstanding anything contained in this Act, in any case of land acquisition proceedings initiated under the Land Acquisition Act, 1894 (1 of 1894),— (a) where no award under Section 11 of the said Land Acquisition Act has been made, then, all provisions of this Act relating to the determination of compensation shall apply; or (b) where an award under said Section 11 has been made, then such proceedings shall continue under the provisions of the said Land Acquisition Act, as if the said Act has not been repealed. (2) Notwithstanding anything contained in sub-section (1), in case of land acquisition proceedings initiated under the Land Acquisition Act, 1894, where an award under the said Section 11 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: Provided that where an award has been made and compensation in respect of a majority of land holdings has not been deposited in the account of the beneficiaries, then, all beneficiaries specified in the notification for acquisition under Section 4 of the said Land Acquisition Act, shall be entitled to compensation in accordance with the provisions of this Act.”

The core of the dispute lies in whether the proviso to Section 24(2) applies to Section 24(1)(b) or Section 24(2).

Arguments

The arguments presented by both sides are as follows:

Respondents’ Arguments (represented by Shri Dhruv Mehta):

• The proviso to Section 24 should govern Section 24(1)(b), not Section 24(2). If the proviso governs Section 24(2), it would take away the valuable right of lapsing of acquisition proceedings and create inconsistencies.
• Section 24(1) deals with compensation, while Section 24(2) deals with the lapsing of acquisition proceedings. The proviso should be read as an exception to Section 24(1)(b), where if compensation for the majority of land holdings has not been deposited, all beneficiaries should receive compensation under the 2013 Act.
• Reading the proviso as part of Section 24(2) would lead to anomalies. For example, if an award was made six years before 01.01.2014 and physical possession was not taken, the acquisition should lapse. However, the proviso, if applied to Section 24(2), would prevent lapsing if compensation for the majority of land holdings has not been deposited.
• The proviso cannot nullify the substantive provision of Section 24(2), as established in cases like Dwarka Prasad v. Dwarka Das Saraf.
• If the proviso is read as part of Section 24(2), it would lead to arbitrary results. For instance, whether an acquisition lapses would depend on whether the land is acquired alone or with other lands.
• The language of the proviso does not refer to the award in Section 24(2) because it does not use the words “such award” or specify “five years or more prior to the commencement of this Act”.
• The 2013 Act is a beneficial legislation and should be interpreted to further its purpose of ensuring humane land acquisition and fair compensation.

DDA’s Arguments (represented by Shri Amarendra Sharan):

• The judgment in Delhi Metro Rail Corporation is a recent judgment of the Supreme Court and should not be disturbed, as it correctly interprets the law in detail.
• The proviso to Section 24 governs Section 24(2) and not Section 24(1)(b).
• Section 24(1)(b) indicates that if an award has been passed under the 1894 Act, the proceedings will continue under the said Act as if it has not been replaced, whereas Section 24(2) provides for deemed lapse if the award is passed five years or more before the commencement of the 2013 Act and possession has not been taken or compensation has not been paid.
• The proviso carves out an exception for a situation where the land acquisition proceedings shall not be deemed to lapse.
• The proviso extends the benefit even to those landholders who have received compensation as per the 1894 Act.

Issues Framed by the Supreme Court

The core issue before the Supreme Court is:

✓ Whether the proviso contained in Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 is a proviso to Section 24(1)(b) or whether it is a proviso to Section 24(2).

Treatment of the Issue by the Court

Authorities

The following authorities were considered by the Court:

Judgment

The Supreme Court analyzed the submissions made by both parties and the relevant authorities.

How each authority was viewed by the Court:

• Tarun Pal Singh v. Lieutenant Governor, Government of NCT of Delhi and Ors. The High Court’s view that the proviso governs Section 24(1)(b) was noted, but ultimately, the Supreme Court sought a review of this position.
• Delhi Metro Rail Corporation v. Tarun Pal Singh The Supreme Court’s Division Bench decision that the proviso governs Section 24(2) is being reconsidered by a larger bench.
• DDA v. Sukhbir Singh The Court used this authority to set out the statutory scheme of Section 24.
• Dwarka Prasad v. Dwarka Das Saraf* This case was used to emphasize that a proviso cannot nullify the main provision.
• S. Sundaram Pillai v. V.R. Pattabiraman* This case was used to explain the scope of a proviso.
• J.K. Industries Ltd. v. Chief Inspector of Factories and Boilers* This case was used to explain the functions of a proviso.
• Sree Balaji Nagar Residential Assn. v. State of Tamil Nadu* The Court referred to this case to emphasize that when the main enactment is clear and unambiguous, a proviso cannot exclude what clearly falls within its express terms. This judgment has been upset by Indore Development Authority v. Shailendra.
• Indore Development Authority v. Shailendra* The Court noted that this judgment, which had upset the judgment in Sree Balaji Nagar Residential Assn., has been referred to a Bench of five learned Judges.
• Eera (through Dr. Manjula Krippendorf) v. State (NCT of Delhi) and Anr.* This case was used to emphasize that the 2013 Act is a beneficial legislation and should be interpreted to further its purpose.

What weighed in the mind of the Court?

The Supreme Court’s reasoning was primarily driven by the need to ensure a consistent and non-arbitrary interpretation of Section 24 of the 2013 Act. The Court was concerned that reading the proviso as part of Section 24(2) would lead to anomalies and inconsistencies, potentially undermining the beneficial intent of the legislation. The Court emphasized the importance of maintaining a balance between the rights of landowners and the state’s power to acquire land.

Logical Reasoning:

The Supreme Court considered the alternative interpretations, particularly the one adopted by the Division Bench in Delhi Metro Rail Corporation. However, the Court found that this interpretation led to inconsistencies and anomalies. The Court also noted that the language of the proviso did not align well with Section 24(2). Therefore, the Court rejected this interpretation and decided to refer the matter to a larger bench for reconsideration.

The Court’s decision is based on the following reasons:

• The proviso should be read as an exception to Section 24(1)(b), which deals with compensation, rather than Section 24(2), which deals with lapsing of acquisition.
• Reading the proviso as part of Section 24(2) would lead to inconsistencies, anomalies, and arbitrary results.
• The language of the proviso does not align with the provisions of Section 24(2).
• The 2013 Act is a beneficial legislation and should be interpreted in a way that furthers its purpose of ensuring fair compensation and humane land acquisition.

The Court did not provide a majority or minority opinion, as it referred the matter to a larger bench for reconsideration.

Key Takeaways

✓ The Supreme Court has raised concerns about the interpretation of the proviso in Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

✓ The Court has referred the matter to a larger bench for reconsideration, indicating that the current legal position may be subject to change.

✓ This decision highlights the complexities in interpreting land acquisition laws and the need for a consistent and fair approach.

Directions

The Supreme Court requested the Chief Justice of India to refer Delhi Metro Rail Corporation v. Tarun Pal Singh to a larger bench for reconsideration.

Development of Law

The ratio decidendi of the case is that the interpretation of the proviso to Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, as laid down in the case of Delhi Metro Rail Corporation v. Tarun Pal Singh, needs to be reconsidered by a larger bench of the Supreme Court. This is because the current interpretation may lead to inconsistencies and arbitrary results. Therefore, the Supreme Court has not changed the previous position of law, but has referred the matter for reconsideration.

Conclusion

The Supreme Court has referred the interpretation of the proviso in Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, to a larger bench. This decision was prompted by conflicting interpretations from the Delhi High Court and a Division Bench of the Supreme Court. The Court found that the current interpretation may lead to inconsistencies and arbitrary results. This case underscores the complexities in land acquisition law and the need for a consistent and equitable approach.