Supreme Court settles land acquisition lapse under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013: Government of NCT of Delhi vs. Shakeel Ahmed (2023)

Date of the Judgment: 09 February 2023
Citation: 2023 INSC 108
Judges: M.R. Shah, J. and C.T. Ravikumar, J.

Can land acquisition proceedings be deemed to have lapsed if the government has taken possession of the land but not paid compensation, or vice-versa? The Supreme Court of India recently addressed this critical question in a series of appeals, clarifying the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (Act, 2013). The core issue revolved around whether the word “or” in Section 24(2) should be read as “and” or “nor,” impacting the conditions under which land acquisition proceedings could lapse.

This judgment was authored by Justice M.R. Shah, with Justice C.T. Ravikumar concurring.

Case Background

The Government of NCT of Delhi initiated land acquisition proceedings under the Land Acquisition Act, 1894 (Act, 1894). The High Court of Delhi, relying on a previous Supreme Court decision, ruled that the acquisition proceedings had lapsed under Section 24(2) of the Act, 2013, as the possession was taken on 04.03.1983. The Government of NCT of Delhi appealed this decision. The original writ petitioner and the original respondent No. 5 had an ownership dispute regarding the land in question. The High Court did not address this dispute before ruling on the lapse of the acquisition.

Timeline

Legal Framework

The core of the dispute lies in the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (Act, 2013). This section deals with the lapse of land acquisition proceedings initiated under the Land Acquisition Act, 1894 (Act, 1894).

Section 24(2) of the 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 had to interpret whether the word “or” in the phrase “possession of the land has not been taken or the compensation has not been paid” should be read as “and” or “nor”. This interpretation is crucial in determining when land acquisition proceedings lapse.

Arguments

The Government of NCT of Delhi argued that the High Court erred in applying the decision of Pune Municipal Corporation, which was later overruled. They contended that the possession of the land was taken on 04.03.1983.

The original writ petitioner argued that the land acquisition proceedings should be deemed to have lapsed under Section 24(2) of the Act, 2013, as the possession was not taken and compensation was not paid.

The High Court relied upon the decision of this Court in the case of Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183 , and declared that the land acquisition proceedings initiated under the Act, 1894 of the subject land is deemed to have lapsed under Section 24(2) of the Act, 2013.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in this judgment. However, the core issue was whether the High Court was correct in declaring that the land acquisition proceedings had lapsed under Section 24(2) of the Act, 2013, based on the overruled decision of Pune Municipal Corporation.

Treatment of the Issue by the Court

Authorities

The Supreme Court relied on the following authorities:

• Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129 – Constitution Bench, Supreme Court of India. This case overruled the previous decision in Pune Municipal Corporation and clarified the interpretation of Section 24(2) of the Act, 2013.
• Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183 – Supreme Court of India. This case was specifically overruled by Indore Development Authority.

The Court also considered the following legal provisions:

• Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
• Land Acquisition Act, 1894

Judgment

The Supreme Court overturned the High Court’s decision, stating that the High Court had incorrectly applied the law. The Court emphasized that the decision in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183* had been specifically overruled by the Constitution Bench in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129*. The Court reiterated that the word “or” in Section 24(2) of the Act, 2013, should be read as “nor” or “and.”

The Court held that the deemed lapse of land acquisition proceedings under Section 24(2) of the Act, 2013, occurs only when both possession has not been taken and compensation has not been paid due to the inaction of authorities for five years or more before the commencement of the Act, 2013.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily driven by the need to adhere to the correct legal interpretation of Section 24(2) of the Act, 2013, as clarified by the Constitution Bench in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129*. The Court emphasized the importance of following binding precedents and correcting errors made by lower courts due to reliance on overruled judgments. The factual aspect of the case was secondary to the legal principle that the word “or” in Section 24(2) should be read as “and” or “nor”.

The Court’s reasoning can be summarized as follows:

The Supreme Court considered the interpretation of Section 24(2) of the Act, 2013 as laid down in the case of Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129*. The Court noted that the High Court had relied on the overruled judgment of Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183* which was not correct. The Supreme Court observed that the word “or” in Section 24(2) should be read as “nor” or “and”. The Court also considered the fact that possession of the land was taken by the Government.

The Court quoted from Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129* stating,
“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 also observed,
“In view of the above and applying the law laid down by this Court in the case of Indore Development Authority (supra) and when it was the specific case on behalf of the appellant and original respondents that the possession of the land in question was taken on 04.03.1983, the impugned judgment and order passed by the High Court declaring that the land acquisition proceedings initiated under the Act, 1894 with respect to land in question is deemed to have lapsed under Section 24(2) of the Act, 2013 is unsustainable and deserves to be quashed and set aside and is accordingly quashed and set aside.”

The Court further stated,
“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.”

Key Takeaways

• The Supreme Court clarified that for land acquisition proceedings to lapse under Section 24(2) of the Act, 2013, both possession must not have been taken and compensation must not have been paid.
• The word “or” in Section 24(2) is to be read as “nor” or “and”.
• The decision in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183* has been overruled.
• If possession of the land has been taken, the land acquisition proceedings will not lapse under Section 24(2) even if compensation has not been paid.

Directions

The Supreme Court quashed and set aside the High Court’s judgment, allowing the appeal of the Government of NCT of Delhi.

Specific Amendments Analysis

There was no discussion on specific amendments in the judgment.

Development of Law

The ratio decidendi of this case is that the word “or” in Section 24(2) of the Act, 2013, should be read as “nor” or “and.” This means that both non-possession and non-payment of compensation are required for the land acquisition proceedings to lapse. This judgment reinforces the position of law as laid down in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129* and overrules the previous interpretation in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183*.

Conclusion

The Supreme Court allowed the appeal, setting aside the High Court’s decision. The Court clarified that land acquisition proceedings under the Land Acquisition Act, 1894, would not lapse under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, if possession of the land had been taken, regardless of whether compensation had been paid. This judgment reinforces the correct interpretation of Section 24(2) as laid down by the Constitution Bench in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129*.