Supreme Court Reviews Land Acquisition Judgments: Impact of Indore Development Authority Ruling (17 March 2023)

Introduction

Date of the Judgment: 17 March 2023

Citation: Not Available in the source

Judges: M.R. Shah, J. and B.V. Nagarathna, J. (Divided opinion with M.R. Shah, J. writing the majority opinion and B.V. Nagarathna, J. writing the minority opinion)

Can a change in law warrant a review of previously decided cases? The Supreme Court of India recently grappled with this question in a batch of cases concerning land acquisition. The core issue revolves around whether the overruling of a prior judgment, specifically Pune Municipal Corporation v. Harakchand Misirimal Solanki, by a Constitution Bench in Indore Development Authority v. Manohar Lal & others, justifies the review of earlier judgments that relied on the overruled decision. This case highlights the complexities of applying new legal interpretations to past rulings and the balance between finality and justice.

Case Background

The Government of NCT of Delhi and the Delhi Development Authority (DDA) filed a series of applications seeking the review and recall of orders passed in various Civil Appeals. These earlier appeals had been dismissed or disposed of, based on the precedent set in Pune Municipal Corporation v. Harakchand Misirimal Solanki. The core of the matter was that the High Courts had declared the acquisition of lands lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (the 2013 Act).

The applicants argued that the legal landscape had fundamentally shifted with the Constitution Bench’s decision in Indore Development Authority v. Manohar Lal & others, which specifically overruled Pune Municipal Corporation. They contended that this overruling invalidated the basis of the earlier dismissals and warranted a review of the judgments. The applicants also pointed to a prior decision in Indore Development Authority v. Shailendra (dead) through Lrs. & Others, which had deemed the Pune Municipal Corporation decision to be per incuriam, and had reserved the liberty to review decisions based on the same.

The respondents, primarily landowners, opposed the review applications, arguing that a change in law is not a valid ground for review. They contended that the judgments had attained finality and that the overruling of Pune Municipal Corporation should not affect settled matters.

Timeline

Course of Proceedings

The initial Civil Appeals were dismissed or disposed of by the Supreme Court, affirming the judgments of various High Courts. These High Courts had ruled that land acquisitions had lapsed under Section 24(2) of the 2013 Act, based on the interpretation provided in Pune Municipal Corporation.

However, the correctness of the decision in Pune Municipal Corporation was doubted in a subsequent case, Indore Development Authority v. Shailendra, which led to the matter being placed before a three-judge bench. This bench declared the decision in Pune Municipal Corporation as per incuriam. Subsequently, a reference was made to a five-judge Constitution Bench, which in Indore Development Authority v. Manohar Lal & others, specifically overruled Pune Municipal Corporation.

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) of the 2013 Act 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 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…”

The interpretation of the word “or” in this section, particularly whether it should be read as “and” or “nor,” was a key point of contention. The Supreme Court in Indore Development Authority v. Manohar Lal & others, clarified that “or” should be read as “nor” or “and,” meaning that a lapse occurs only if both possession has not been taken and compensation has not been paid.

The review applications were filed under Article 137 of the Constitution of India, which grants the Supreme Court the power to review its judgments, and Section 47 of the Civil Procedure Code (CPC). The power to review is also governed by Order XLVII Rule 1 of the Supreme Court Rules, 2013, which limits review to the grounds specified in Order XLVII Rule 1 of the CPC.

Order XLVII Rule 1 of the CPC states that a review petition may be preferred on the following grounds:

• ✓ Discovery of new and important matter or evidence.
• ✓ Mistake or error apparent on the face of the record.
• ✓ Any other sufficient reason.

The Explanation to Order XLVII Rule 1 of the CPC states that the reversal or modification of a decision on a question of law by a subsequent decision of a superior court shall not be a ground for review.

Arguments

Applicants’ Submissions:

• ✓ The applicants argued that the decision in Pune Municipal Corporation, which was the basis for dismissing their appeals, had been specifically overruled by the Constitution Bench in Indore Development Authority v. Manohar Lal & others.
• ✓ They emphasized that the Constitution Bench had not only overruled Pune Municipal Corporation but also all other decisions that followed it.
• ✓ They contended that the earlier decision in Indore Development Authority v. Shailendra (dead) through Lrs. & Others had already declared Pune Municipal Corporation per incuriam, and had reserved the liberty to review decisions based on the same.
• ✓ The applicants submitted that the power to review flows from Article 137 of the Constitution and that the principle of res judicata should not apply when the law has been altered by a subsequent decision.
• ✓ They also pointed out that the judgment in Pune Municipal Corporation had been recalled by a three-judge bench, further necessitating a review of the orders that relied on it.
• ✓ The applicants argued that a judicial decision acts retrospectively, and that the later decision in Indore Development Authority v. Manohar Lal & others clarified the correct principle of law, which should be applied retrospectively.
• ✓ They highlighted that in many cases, possession of the land had already been handed over to the DDA for public purposes, and that the deemed lapse of acquisition due to the incorrect interpretation of law in Pune Municipal Corporation was causing significant public harm.
• ✓ They relied on the decision in Board of Control for Cricket in India v. Netaji Cricket Club, arguing that a mistake on the part of the Court may call for a review, and that the words “sufficient reason” in Order 47 Rule 1 CPC are wide enough to include a misconception of fact or law.

Respondents’ Submissions:

• ✓ The respondents argued that the review applications were based on a subsequent change in law, which is not a valid ground for review.
• ✓ They contended that even if Indore Development Authority v. Manohar Lal & others had overruled Pune Municipal Corporation, the settled position between the parties should not be affected.
• ✓ They submitted that the judgment in Indore Development Authority v. Manohar Lal & others should be construed to be prospective in its operation and should not reopen cases that had already attained finality.
• ✓ The respondents argued that the law operational at the time when the High Court delivered its judgment was that laid down in Pune Municipal Corporation, and that the matter had attained finality before the judgment in Indore Development Authority v. Manohar Lal & others.
• ✓ They contended that the Constitution Bench in Indore Development Authority v. Manohar Lal & others was only concerned with the correctness of the law laid down in Pune Municipal Corporation and was not considering a review of the decisions.
• ✓ The respondents relied on the decision in BSNL v. Union of India, arguing that the overruling of a decision does not affect the binding nature of the decision between the parties to the lis.
• ✓ They also cited Neelima Srivastava v. State of U.P., arguing that the mere overruling of principles by a subsequent judgment does not dilute the binding effect of the decision inter-parties.
• ✓ The respondents argued that none of the conditions enumerated under Order 47 Rule 1 CPC and Order 47 of the Supreme Court Rules were satisfied.
• ✓ They further argued that the Explanation to Order 47 of the CPC states that the fact that a decision on a question of law has been reversed by a subsequent decision of a superior court shall not be a ground for review.
• ✓ They contended that the sole ground raised by the review petitioners was that the decision in Pune Municipal Corporation was held to be per incuriam, which is not a valid ground for review.
• ✓ They submitted that similar review petitions had been dismissed in some cases, and that the subsequent recall of the judgment in Pune Municipal Corporation should not be a ground to review the orders in the present cases.

Submissions Table

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issue was whether the overruling of Pune Municipal Corporation by Indore Development Authority constituted a valid ground for the review of earlier judgments that had relied on the overruled decision.

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?

✓ Pune Municipal Corporation v. Harakchand Misirimal Solanki [(2014) 3 SCC 183]: Overruled by the Constitution Bench in Indore Development Authority v. Manohar Lal & others.

✓ Indore Development Authority v. Manohar Lal & others [(2020) 8 SCC 129]: Followed as the correct interpretation of Section 24(2) of the 2013 Act.

✓ Indore Development Authority v. Shailendra (dead) through Lrs. & Others [(2018) 3 SCC 412]: Referred to as the decision that declared Pune Municipal Corporation per incuriam and reserved liberty to review decisions based on the same.

✓ Mathura Prasad Bajoo Jaiswal & Others v. Dossibai N.B. Jeejeebhoy [(1970) 1 SCC 613]: Relied upon to support the view that the principle of res judicata does not apply when the law has been altered.

✓ Assistant Commissioner, Income Tax, Rajkot v. Saurashtra Kutch Stock Exchange Limited [(2008) 14 SCC 171]: Relied upon to support the view that judicial decisions act retrospectively.

✓ Board of Control for Cricket in India v. Netaji Cricket Club [(2005) 4 SCC 741]: Relied upon to support the view that a mistake on the part of the Court may call for a review.

✓ BSNL v. Union of India [(2006) 3 SCC 1]: Relied upon by the respondents, but distinguished by the Court, stating that overruling does not affect the binding nature of a decision between parties.

✓ Neelima Srivastava v. State of U.P. [(2021 SCC OnLine SC 610)]: Relied upon by the respondents, but distinguished by the Court, stating that overruling of principles does not dilute the binding effect of a decision inter-parties.

✓ Kamlesh Verma v. Mayawati [(2013) 8 SCC 320]: Relied upon by the respondents, but distinguished by the Court, stating that review is not maintainable unless grounds are made out.

✓ Beghar Foundation v. K.S. Puttaswamy [(2021) 3 SCC 1]: Relied upon by the respondents, but distinguished by the Court, stating that change in law is not a ground for review.

✓ Chajju Ram vs. Neki [AIR 1922 P.C. 112]: Relied upon by the minority opinion, stating that there cannot be a review on the ground that the judgment proceeded on an incorrect exposition of law.

✓ Moran Mar Basselios Catholicos vs. Most Rev. Mar Paulose Athanasius [AIR 1954 SC 526]: Relied upon by the minority opinion, stating that the expression “any other sufficient reason” must mean “a reason sufficient on grounds, at least analogous to those specified in the Rule”.

✓ Hari Sankar Pal vs. Anath Nath Mitter [AIR 1949 FC 106]: Relied upon by the minority opinion, stating that if a decision is erroneous in law, that is not a ground for ordering review.

What weighed in the mind of the Court?

The majority opinion, authored by Justice M.R. Shah, emphasized the specific observations made by the Constitution Bench in Indore Development Authority v. Manohar Lal & others, which not only overruled Pune Municipal Corporation but also all decisions that followed it. This was a significant factor in the Court’s decision to allow the review applications. The Court also considered the fact that in many cases, possession of the lands had been taken over and utilized by the beneficiary authorities, and that the deemed lapse of acquisition was causing public harm. The Court highlighted the need to give the public authorities an opportunity to put forward their case afresh, which was seen to be in the larger public interest.

The minority opinion, authored by Justice B.V. Nagarathna, focused on the limitations of the review jurisdiction under Order XLVII Rule 1 CPC and the Explanation to the said rule. The minority opinion held that the Explanation to Order XLVII Rule 1 CPC bars a review of a judgment on the ground that a subsequent decision has been rendered by a superior Court reversing or overruling the earlier decision. The minority opinion also emphasized the importance of the finality of judgments and the need to avoid reopening settled matters.

The Court also considered that in some cases, similar review petitions had been dismissed, but noted that in those cases, the attention of the Court to paras 365 and 366 of the decision of the Constitution Bench in Indore Development Authority v. Manohar Lal & others and para 217 of the earlier decision in the case of Indore Development Authority v. Shailendra (dead) through Lrs. were not brought to the notice of the Court.

The ratio of fact:law indicates that the court considered both the factual aspects of the case (such as possession of land and public purpose) and legal considerations (such as the interpretation of Section 24(2) and the principle of res judicata) in its decision-making process.

Dissent

Justice B.V. Nagarathna delivered a dissenting opinion, disagreeing with the majority’s decision to allow the review applications. The dissenting opinion emphasized the importance of the finality of judgments and the limitations of the review jurisdiction under Order XLVII Rule 1 of the CPC. The dissenting judge held that a change in law, as a result of a subsequent judgment of a superior court, is not a valid ground for review.

The dissenting opinion argued that the Explanation to Order XLVII Rule 1 CPC specifically states that the reversal or modification of a decision on a question of law by a subsequent decision of a superior court shall not be a ground for review. The dissenting judge also noted that the power of review is not an inherent power, but is conferred by statute and is circumscribed by the limits specified therein.

The dissenting opinion relied on the decision in Chajju Ram vs. Neki, Moran Mar Basselios Catholicos vs. Most Rev. Mar Paulose Athanasius, and Hari Sankar Pal vs. Anath Nath Mitter, to support the view that a review cannot be ordered on the ground that the judgment proceeded on an incorrect exposition of law.

Final Order

The Supreme Court, by a majority of 2:1, allowed the review applications. The Court recalled the orders passed in the earlier Civil Appeals and restored the same to their original file numbers. The Court directed the Registry to list the cases for hearing before the appropriate Bench.

Conclusion

The Supreme Court’s decision in this batch of cases highlights the complexities of applying new legal interpretations to past rulings. The majority opinion emphasized the need to rectify errors arising from a misinterpretation of law, especially when it affects public interest. The Court acknowledged that the overruling of Pune Municipal Corporation by Indore Development Authority had fundamentally altered the legal landscape, necessitating a review of judgments that had relied on the overruled decision.

The dissenting opinion, however, underscored the importance of the finality of judgments and the limitations of the review jurisdiction. The dissenting judge argued that a change in law is not a valid ground for review under the existing legal framework.

The case is significant because it shows the Court’s willingness to revisit earlier decisions in the interest of justice and public welfare, especially when a fundamental legal principle has been reinterpreted by a larger Bench. The decision also underscores the importance of the retrospective application of judicial decisions and the potential impact of changes in law on settled matters.