Supreme Court Settles Meaning of "Paid" and "Tender" under Section 24 of the 2013 Act in Land Acquisition Cases (8 February 2018)

Supreme Court Clarifies Land Acquisition Lapses Under Section 24 of the 2013 Act

LEGAL ISSUE: Interpretation of “paid” and “tender” in land acquisition and the effect of non-deposit of compensation in court.

CASE TYPE: Land Acquisition

Case Name: Indore Development Authority v. Shailendra (Dead) Through LRs. & Ors.

[Judgment Date]: 8 February 2018

Table of Contents

Introduction

Date of the Judgment: 8 February 2018

Citation: (2018) INSC 121

Judges: Arun Mishra, Adarsh Kumar Goel, and Mohan M. Shantanagoudar, JJ. (Majority opinion by Arun Mishra and Adarsh Kumar Goel, JJ. Concurring opinion by Mohan M. Shantanagoudar, J.)

Can a land acquisition be deemed to have lapsed if the compensation wasn’t deposited in court, even if it was offered to the landowner? The Supreme Court recently addressed this critical question, clarifying the meaning of “paid” and “tender” in the context of land acquisition under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (the 2013 Act). This judgment analyzes the interplay between the 2013 Act and the Land Acquisition Act, 1894 (the 1894 Act), providing crucial guidance on the process of land acquisition.

The Supreme Court, in this significant ruling, has interpreted the terms “paid” and “tender” in the context of land acquisition, particularly under Section 24 of the 2013 Act and Section 31 of the 1894 Act. The core issue revolved around whether the non-deposit of compensation in court, especially when compensation has been tendered and refused, results in a lapse of acquisition. The Court also examined the mode of taking physical possession under Section 24(2) of the 2013 Act, and whether the said provision revives stale or barred claims. The Court further analyzed the effect of interim orders by the Court on the applicability of Section 24(2) of the 2013 Act, and the applicability of the principle of “actus curiae neminem gravabit”.

The judgment was delivered by a three-judge bench of the Supreme Court, with the majority opinion authored by Justices Arun Mishra and Adarsh Kumar Goel, and a concurring opinion by Justice Mohan M. Shantanagoudar.

Case Background

The case originated from a land acquisition by the Indore Development Authority (IDA) for the construction of a Ring Road and Link Road in Indore. The acquisition process began with a notification under Section 4(1) of the 1894 Act on December 23, 1994, followed by a declaration under Section 6 on March 17, 1995. The IDA deposited the compensation with the Land Acquisition Collector, but the landowners refused to collect it. The landowners filed a writ petition challenging the acquisition, which was initially allowed by the High Court, holding that the scheme had lapsed and the enquiry under section 5A was illegally dispensed with. However, the matter was remitted back to the High Court by the Supreme Court, and the High Court again ordered status quo. Subsequently, the landowners raised the issue of the lapse of acquisition under Section 24(2) of the 2013 Act.

Timeline

Date	Event
23 December 1994	Notification under Section 4(1) of the 1894 Act issued.
17 March 1995	Declaration under Section 6 of the 1894 Act published.
14 March 1997	Award passed by the Land Acquisition Officer (LAO).
1997	Writ Petition No. 1182 of 1997 filed by landowners.
28 August 1998	High Court allowed the Writ Petition, holding that the scheme lapsed and enquiry under section 5A was illegally dispensed with.
29 January 2000	Division Bench of the High Court passed status quo order.
04 April 2007	High Court again directed maintenance of status quo.
03 November 2014	High Court held that acquisition proceedings had lapsed under Section 24(2) of the 2013 Act.
07 December 2017	Supreme Court referred the matter to a larger bench.
08 February 2018	Supreme Court delivered the judgment.

Legal Framework

The Supreme Court analyzed the following key legal provisions:

Section 24 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 1894 Act. Sub-section (2) states that proceedings lapse if an award was made five years or more before the commencement of the 2013 Act, and either physical possession hasn’t been taken or compensation hasn’t been paid. The proviso to this sub-section states that if compensation for the majority of land holdings has not been deposited in the accounts of the beneficiaries, the acquisition will not lapse, but all beneficiaries will be entitled to compensation under the 2013 Act.
Sections 31, 32, 33, and 34 of the Land Acquisition Act, 1894: These sections govern the payment of compensation, the deposit of compensation in court under certain circumstances (such as refusal to accept payment), and the payment of interest on delayed payments. Specifically, Section 31(1) mandates the Collector to “tender payment” and “pay” the compensation, while Section 31(2) specifies the conditions for depositing the amount in court.
Section 77 of the 2013 Act: This section is similar to Section 31 of the 1894 Act, outlining the procedure for payment of compensation.
Section 80 of the 2013 Act: This section is akin to Section 34 of the 1894 Act, dealing with the payment of interest on delayed compensation.

The Court also considered various State rules framed under Section 55 of the 1894 Act, which provide for deposit of compensation in the Treasury under certain circumstances.

Arguments

Arguments by the Landowners:

The expression “paid” in Section 24(2) of the 2013 Act must be interpreted strictly to mean actual payment to the landowner or deposit in court as per Section 31(2) of the 1894 Act.
A deposit in the treasury does not amount to payment of compensation, and therefore, the acquisition proceedings must lapse if the compensation is not deposited in court.
The legislature consciously omitted to extend the period of five years under Section 24(2), even if the proceedings were delayed due to a stay order by a court.

Arguments by the State/Acquiring Authority:

The terms “paid” and “tender” should be interpreted to include a situation where the State has offered the compensation, and the landowner has refused to accept the same.
Deposit of compensation in the treasury is a valid mode of deposit, especially when landowners do not appear to accept the compensation.
The State cannot be penalized for delays caused by court orders or by the landowners’ own conduct.
The provisions of section 24 of the 2013 Act should not be misused to revive stale and dead claims.

The innovativeness in the argument by the State was to emphasize that the word ‘paid’ in section 24(2) of the 2013 Act is not to be interpreted literally, but must also include the concept of ‘tender’ as used in Section 31(1) of the 1894 Act. The landowners, on the other hand, emphasized that the word ‘paid’ must be interpreted strictly to mean actual receipt of the compensation or deposit in the court.

Main Submission	Sub-Submissions by Landowners	Sub-Submissions by State/Acquiring Authority
Meaning of “Paid” and “Tender”	“Paid” means actual receipt or deposit in court. “Tender” is not equivalent to payment.	“Paid” includes situations where compensation is offered and refused. “Tender” is a valid mode of payment.
Effect of Non-Deposit in Court	Non-deposit in court leads to lapse of acquisition. Deposit in treasury is insufficient.	Non-deposit in court does not lead to lapse. Deposit in treasury is a permissible mode of deposit.
Effect of Stay Orders	Period of stay orders should not be excluded. Legislature consciously omitted to exclude stay period.	Period of stay orders should be excluded. State cannot be penalized for court-ordered delays.

Issues Framed by the Supreme Court

The Supreme Court framed the following key issues for consideration:

What is the meaning of the expression ‘paid’/ ‘tender’ in Section 24 of the 2013 Act and Section 31 of the 1894 Act? Whether non-deposit of compensation in court under Section 31(2) of the 1894 Act results in a lapse of acquisition under Section 24(2) of the 2013 Act? What are the consequences of non-deposit in Court especially when compensation has been tendered and refused under Section 31(1) of the 1894 Act and Section 24(2) of the 2013 Act? Whether such persons after refusal can take advantage of their wrong/conduct?
Mode of taking physical possession as contemplated under Section 24(2) of the 2013 Act.
Whether Section 24 of the 2013 Act revives barred and stale claims?
Whether the conscious omission referred to in paragraph 11 of the judgment in Shree Balaji Nagar Residential Association v. State of Tamil Nadu [(2015) 3 SCC 353] makes any substantial difference to the legal position with regard to the exclusion or inclusion of the period covered by an interim order of the Court for the purpose of determination of the applicability of Section 24(2) of the 2013 Act?
Whether the principle of “actus curiae neminem gravabit”, namely act of the Court should not prejudice any parties would be applicable in the present case to exclude the period covered by an interim order for the purpose of determining the question with regard to taking of possession as contemplated in Section 24(2) of the 2013 Act?

Treatment of the Issue by the Court

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

Issue	Court’s Decision	Brief Reasons
Meaning of “Paid” and “Tender”	“Paid” is equivalent to “tender of payment”; deposit in court not required.	The obligation to pay is discharged when payment is offered and refused. “Paid” does not include “deposited” in court.
Mode of Taking Physical Possession	Drawing of Panchnama is a valid mode of taking possession.	State is not expected to physically occupy land. Drawing a Panchnama is accepted mode of taking possession.
Revival of Stale Claims	Section 24 does not revive stale claims.	Section 24 is not intended to benefit those who deliberately refuse compensation or delay proceedings.
Effect of Conscious Omission	Conscious omission does not make a difference.	The legislature’s omission to exclude stay periods does not prevent the court from applying common law principles to exclude such periods.
Applicability of “Actus Curiae Neminem Gravabit”	Principle is applicable to exclude stay periods.	The act of the court should not prejudice any party; therefore, time spent under a stay order should be excluded.

Authorities

The Supreme Court considered the following authorities:

Decision of the Court

The Supreme Court held that:

The word “paid” in Section 24(2) of the 2013 Act is equivalent to “tender of payment” and does not necessarily mean the actual deposit of compensation in court.
If the compensation has been offered to the landowners and they have refused to accept it, the obligation to pay is discharged, and the acquisition does not lapse.
The drawing of a Panchnama is a valid mode of taking physical possession of the land.
Section 24 of the 2013 Act is not intended to revive stale or dead claims.
The period covered by an interim order of the court should be excluded while determining the applicability of Section 24(2) of the 2013 Act, based on the principle of “actus curiae neminem gravabit”.

The Court emphasized that the interpretation of “paid” should not lead to a situation where landowners can deliberately refuse to accept compensation and then claim a lapse of acquisition. The Court also observed that the State cannot be penalized for delays caused by court orders or by the landowners’ own conduct.

Flowchart: Land Acquisition and Lapse under Section 24(2)

Notification under Section 4(1) of 1894 Act

↓

Declaration under Section 6 of 1894 Act

↓

Award Passed

↓

Compensation Offered (Tendered) to Landowners

↓

If Accepted: Acquisition Valid

↓

If Refused: Compensation Deposited in Treasury

↓

Possession Taken (Panchnama)

↓

Acquisition Valid

↓

If Award Made 5+ Years Before 2013 Act & Possession Not Taken & Compensation Not “Paid/Tendered”: Acquisition Lapses

Concurring Opinion by Justice Mohan M. Shantanagoudar

Justice Mohan M. Shantanagoudar delivered a concurring opinion, agreeing with the majority view. He emphasized the importance of the principle of “actus curiae neminem gravabit” and highlighted that the court should not allow any party to take advantage of its own wrong. He also stressed that the term “paid” should not be interpreted literally, and the tender of payment is sufficient compliance with the requirement of Section 24(2) of the 2013 Act. He also emphasized that the provisions of section 24(2) cannot be used to revive stale and dead claims.

Implications

This judgment has significant implications for land acquisition law and practice in India:

It clarifies the meaning of “paid” and “tender” in the context of land acquisition, providing certainty and preventing misuse of Section 24(2) of the 2013 Act.
It establishes that the State is not required to deposit the compensation in court in every case, especially when the landowners have refused the payment.
It validates the practice of taking physical possession by drawing a Panchnama.
It reinforces the principle that courts should not allow parties to benefit from their own delays or wrong conduct.
It clarifies that the period of stay orders should be excluded for the purpose of determining the applicability of Section 24(2) of the 2013 Act.

The ruling ensures that land acquisition proceedings are not unduly hampered by technicalities, and that the State is not penalized for delays caused by landowners or court orders. The judgment also strikes a balance between the rights of landowners and the need for efficient land acquisition for public purposes.

Source: Supreme Court Settles Meaning of “Paid” and “Tender” under Section 24 of the 2013 Act in Land Acquisition Cases (8 February 2018)

Authority	Legal Point	How it was Considered	Court
Straw Board Manufacturing Co. Ltd., Saharanpur v. Gobind, AIR 1962 SC 1500	Meaning of “payment” in the context of wages.	Held that tender of wages amounts to payment.	Supreme Court of India
The Management of Delhi Transport Undertaking v. The Industrial Tribunal, Delhi &Anr., AIR 1965 SC 1503	Meaning of “payment” in the context of wages.	Held that tender of wages is sufficient compliance.	Supreme Court of India
Indian Oxygen Ltd. v. Narayan Bhoumik, (1968) 1 PLJR 94	Meaning of “paid” in the context of wages.	Held that tender of wages is sufficient compliance.	Supreme Court of India
The Benares State Bank Ltd. v. The Commissioner of Income Tax, Lucknow, (1969) 2 SCC 316	Meaning of “paid” in the context of dividends.	Held that dividend is “paid” when made unconditionally available.	Supreme Court of India
N.B. Sanjana, Assistant Collector of Central Excise, Bombay & Ors. v. The Elphinstone Spinning & Weaving Mills Co. Ltd., (1971) 1 SCC 337	Literal meaning of “paid” need not be adopted.	Literal meaning of “paid” need not be adopted.	Supreme Court of India
J.Dalmia v. Commissioner of Income Tax, New Delhi, AIR 1964 SC 1866	Meaning of “paid” in the context of dividends.	Held that dividend is “paid” when made unconditionally available.	Supreme Court of India
Nali Nalinakhya Bysack v. Shyamsunder Halder, AIR 1953 SC 148	Court cannot add or subtract words from a statute.	Emphasized that the court cannot add or subtract words from a statute.	Supreme Court of India
State of Madhya Pradesh v. G.S. Dall and Flour Mills, AIR 1991 SC 772	Court cannot add or subtract words from a statute.	Emphasized that the court cannot add or subtract words from a statute.	Supreme Court of India
State of Gujarat and Others v. Dilipbhai Nathjibhai Patel and Another (1998) 3 SCC 234	Court cannot add or subtract words from a statute.	Emphasized that the court cannot add or subtract words from a statute.	Supreme Court of India
Competition Commission of India v. Steel Authority of India Ltd., (2010) 10 SCC 744	Court cannot add or subtract words from a statute.	Emphasized that the court cannot add or subtract words from a statute.	Supreme Court of India
Assessing Authority cum-Excise and Taxation Officer v. East India Cotton Mfg. Co. Ltd., (1981) 3 SCC 531	Court cannot add or subtract words from a statute.	Emphasized that the court cannot add or subtract words from a statute.	Supreme Court of India
Paul Enterprises & Ors. v. Rajib Chatterjee & Co. & Ors., AIR 2009 SC 187	Court cannot add or subtract words from a statute.	Emphasized that the court cannot add or subtract words from a statute.	Supreme Court of India
Sakshi v. Union of India, (2004) 5 SCC 518	Court cannot add or subtract words from a statute.	Emphasized that the court cannot add or subtract words from a statute.	Supreme Court of India
Commissioner of Income Tax, Kerala v. Tata Agencies, (2007) 6 SCC 429	Court cannot add or subtract words from a statute.	Emphasized that the court cannot add or subtract words from a statute.	Supreme Court of India
Ram Narain Medhi v. State of Bombay, AIR 1959 SC 459	Court cannot add or subtract words from a statute.	Emphasized that the court cannot add or subtract words from a statute.	Supreme Court of India
S.P. Gupta v. President of India, AIR 1982 SC 149	Court cannot add or subtract words from a statute.	Emphasized that the court cannot add or subtract words from a statute.	Supreme Court of India
Dadi Jagannadham v. Jammulu Ramulu, (2001) 7 SCC 71	Court cannot add or subtract words from a statute.	Emphasized that the court cannot add or subtract words from a statute.	Supreme Court of India
P.K. Unni v. Nirmala Industries, AIR 1990 SC 933	Court cannot add or subtract words from a statute.	Emphasized that the court cannot add or subtract words from a statute.	Supreme Court of India
Crawford v. Spooner (1846) 6 Moore PC 1	Court cannot add or subtract words from a statute.	Emphasized that the court cannot add or subtract words from a statute.	Privy Council
Royal Trust Company v. Minister of Finance, AIR 1921 PC 184	Court cannot add or subtract words from a statute.	Emphasized that the court cannot add or subtract words from a statute.	Privy Council
Padma Sundara Rao (dead) & Ors. v. State of T. N. & Ors., (2002) 3 SCC 533	Court cannot add or subtract words from a statute.	Emphasized that the court cannot add or subtract words from a statute.	Supreme Court of India
Brighton Parish Guardians v. Strand Union Guardians, (1891) 2 QB 156	Different words in a statute carry different meanings.	Held that different words in a statute carry different meanings.	Court of Appeal
Member, Board of Revenue v. Arthur Paul Benthall, AIR 1956 SC 35	Different words in a statute carry different meanings.	Held that different words in a statute carry different meanings.	Supreme Court of India
CIT v. East West Import & Export (P.) Ltd., Jaipur, AIR 1989 SC 836	Different words in a statute carry different meanings.	Held that different words in a statute carry different meanings.	Supreme Court of India
Kailash Nath Agarwal v. Pradeshiya Industries and Investment Corporation of Uttar Pradesh, (2003) 4 SCC 305	Different words in a statute carry different meanings.	Held that different words in a statute carry different meanings.	Supreme Court of India
The Oriental Insurance Co. Ltd. v. Hansrajbhai v. Kodala, AIR 2001 SC 1832	Different words in a statute carry different meanings.	Held that different words in a statute carry different meanings.	Supreme Court of India
S.K. DAS, J. in construing section 14(f) of the U.P. Town Areas Act, 1914	Court cannot add words to a statute.	Emphasized that the court cannot add words to a statute.	Supreme Court of India
Lord Loreburn, L.C., in interpreting sections 6(a) and 43 of the Transfer of Property Act, 1882	Court cannot add words to a statute.	Emphasized that the court cannot add words to a statute.	House of Lords
Harbhajan Singh v. Press Council of India, AIR 2002 SC 1351	Ordinary meaning to be assigned to the words in a statute.	Held that ordinary meaning to be assigned to the words in a statute.	Supreme Court of India
Balasinor Nagrik Cooperative Bank Limited vs. Babubhai Shankerlal Pandya, (1987) 1 SCC 606	A section is to be interpreted by reading all its parts together.	Held that a section is to be interpreted by reading all its parts together.	Supreme Court of India
Inco Europe Ltd. v. First Choice Distribution (a firm), (2000) 2 All ER 109	Court can correct obvious drafting errors.	Held that court can correct obvious drafting errors.	House of Lords
G.P. Singh, in “Principles of Statutory Interpretation” (14th edition)	Rule of literal construction.	Discussed the rule of literal construction.	(Book)
Delhi Development Authority v. Sukhbir Singh & Ors., (2016) 16 SCC 258	Mode of payment under Section 31(1) of the 1894 Act.	Held that deposit in treasury is a residuary mode of payment under Section 31(1).	Supreme Court of India
Hissar Improvement v. Smt. Rukmani Devi & Anr., AIR 1990 SC 2033	Consequence of non-deposit of compensation in time.	Held that interest is payable if compensation is not deposited in time.	Supreme Court of India
Kishan Das & Ors. v. State of U.P. & Ors., (1995) 6 SCC 240	Higher interest cannot be claimed for dilatory tactics.	Held that higher interest cannot be claimed for dilatory tactics.	Supreme Court of India
Seshan & Ors. v. Special Tehsildar & Land Acquisition Officer, SPICOT, Pudukkottai, (1996) 8 SCC 89	Interest payable under Section 34 of the 1894 Act.	Held that interest is payable under Section 34 of the 1894 Act.	Supreme Court of India
D Block Ashok Nagar (Sahibabad) Plot Holders’ Association (Regd.) v. State of U.P. & Ors., (1997) 10 SCC 77	Liability to pay interest under Section 34 arises from the date of taking possession.	Held that liability to pay interest under Section 34 arises from the date of taking possession.	Supreme Court of India
Fruit and Vegetable Merchants Union v. Delhi Improvement Trust, AIR 1957 SC 344	Meaning of “vest”.	Held that “vest” means the property becomes the property of the Government without condition.	Supreme Court of India
State of Punjab v. Sadhu Ram, 1996 (7) JT 118	Vesting of land in the Government.	Held that upon taking possession, the land vests absolutely in the Government.	Supreme Court of India
Star Wire (India) Ltd. v. State of Haryana & Ors., (1996) 11 SCC 698	Vesting of land in the Government.	Held that upon taking possession, the land vests absolutely in the Government.	Supreme Court of India