Supreme Court settles the locus standi of subsequent purchasers in land acquisition cases: Delhi Development Authority vs. Narendra Kumar Jain (2023) INSC 432 (4 May 2023)

Date of the Judgment: 4 May 2023
Citation: (2023) INSC 432
Judges: M.R. Shah, J. and Ahsanuddin Amanullah, J.
Can a subsequent purchaser of land challenge its acquisition? The Supreme Court of India recently addressed this critical question, overturning a High Court decision. The Court clarified that subsequent purchasers do not have the right to challenge land acquisition or claim it has lapsed under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. This judgment clarifies the legal standing of subsequent purchasers in land acquisition disputes. The bench comprised of Justice M.R. Shah and Justice Ahsanuddin Amanullah, with the judgment authored by Justice M.R. Shah.

Case Background

The Delhi Development Authority (DDA) appealed against a judgment by the High Court of Delhi. The High Court had ruled in favor of the respondents, declaring that the land acquisition concerning their property had lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (the “Act, 2013”). The High Court’s decision was based on the premise that the compensation had not been paid or tendered to the landowners. The respondents, who were subsequent purchasers of the land, had filed a writ petition challenging the acquisition. The DDA contended that the respondents, being subsequent purchasers, lacked the locus standi to challenge the acquisition.

Timeline

Course of Proceedings

The High Court of Delhi had allowed the writ petition filed by the respondents, who were subsequent purchasers of the land. The High Court, relying on the decision in Govt. of NCT of Delhi Vs. Manav Dharma Trust (2017) 6 SCC 751, overruled the objection that subsequent purchasers lack the standing to challenge the acquisition. The High Court then declared that the acquisition had lapsed because the compensation had not been paid or tendered. The Delhi Development Authority then appealed to the Supreme Court against this decision.

Legal Framework

The case primarily 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 if certain conditions are not met. The Supreme Court also considered previous judgments on the issue of locus standi of subsequent purchasers in land acquisition cases.

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

“(2) 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: 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, shall be entitled to compensation in accordance with the provisions of this Act.”

Arguments

The arguments in this case primarily revolved around the locus standi of subsequent purchasers to challenge land acquisition proceedings.

• Appellant’s (Delhi Development Authority) Submissions:
  • The Delhi Development Authority argued that the respondents, being subsequent purchasers, did not have the legal standing to challenge the acquisition.
  • They contended that the High Court erred in relying on Govt. of NCT of Delhi Vs. Manav Dharma Trust (2017) 6 SCC 751, as this decision had been overruled by subsequent judgments of the Supreme Court.
  • The DDA relied on the decisions in Shiv Kumar & Anr. Vs. Union of India & Ors. (2019) 10 SCC 229 and Delhi Development Authority Vs. Godfrey Philips (I) Ltd. & Ors. Civil Appeal No. 3073/2022, which held that subsequent purchasers do not have the right to challenge acquisition or claim lapse of acquisition.
• Respondents’ (Narendra Kumar Jain & Ors.) Submissions:
  • The respondents, the subsequent purchasers, argued that the acquisition should be deemed to have lapsed under Section 24(2) of the Act, 2013, as the compensation had not been paid or tendered.
  • They relied on the High Court’s judgment, which had initially favored them based on the Manav Dharma Trust case.

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was:

1. Whether subsequent purchasers of land have the locus standi to challenge the acquisition of the said land or claim that the acquisition has lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

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

The Supreme Court allowed the appeal filed by the Delhi Development Authority. The Court held that the High Court’s judgment was unsustainable and set it aside. The Supreme Court reiterated that subsequent purchasers do not have the locus standi to challenge land acquisition or claim a lapse of acquisition.

The following authorities were viewed by the Court as follows:

✓ Govt. of NCT of Delhi Vs. Manav Dharma Trust (2017) 6 SCC 751: The Supreme Court held that this case was not a good law and overruled it as it was contrary to the position of law.

✓ Shiv Kumar & Anr. Vs. Union of India & Ors. (2019) 10 SCC 229: The Supreme Court followed this case to hold that subsequent purchasers do not have the locus standi to challenge the acquisition.

✓ Delhi Development Authority Vs. Godfrey Philips (I) Ltd. & Ors. Civil Appeal No. 3073/2022: The Supreme Court relied on this case to further support its position that subsequent purchasers cannot challenge the acquisition.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the legal principle that subsequent purchasers do not have the right to challenge prior land acquisition proceedings. The Court emphasized the need for legal clarity and consistency in land acquisition matters. The Court also considered the implications of allowing subsequent purchasers to challenge acquisitions, which could lead to instability and uncertainty in land ownership.

The Court reasoned that allowing subsequent purchasers to challenge acquisitions would disrupt the established legal framework and create unnecessary complications in land acquisition processes. The Court also noted that the respondents did not have any original rights over the land at the time of acquisition, and therefore, they could not claim any lapse of acquisition based on non-payment of compensation.

The Supreme Court quoted:

“In the case of Shiv Kumar (supra) and Godfrey Philips (I) Ltd. (supra), it is specifically observed and held that the subsequent purchaser has no locus to challenge the acquisition and/or pray for deemed lapse of acquisition.”

The Court did not have any dissenting opinions.

The decision has significant implications for future cases involving land acquisition. It clarifies that only the original landowners or those who had a vested interest in the land at the time of acquisition can challenge the acquisition or claim a lapse. This ruling will bring greater clarity and predictability to land acquisition proceedings.

Key Takeaways

• Subsequent purchasers of land do not have the legal standing to challenge the acquisition of that land.
• Subsequent purchasers cannot claim that the land acquisition has lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
• The Supreme Court overruled its earlier decision in Govt. of NCT of Delhi Vs. Manav Dharma Trust (2017) 6 SCC 751, clarifying the legal position on this matter.
• This decision brings clarity to land acquisition proceedings and ensures that only those with a direct interest at the time of acquisition can challenge it.

Directions

No specific directions were given by the Supreme Court in this case.

Development of Law

The ratio decidendi of this case is that subsequent purchasers of land do not have the locus standi to challenge the acquisition of that land or claim that the acquisition has lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. This decision clarifies the legal position and overrules the previous view taken in Govt. of NCT of Delhi Vs. Manav Dharma Trust (2017) 6 SCC 751, thus changing the previous position of law.

Conclusion

In conclusion, the Supreme Court’s decision in Delhi Development Authority vs. Narendra Kumar Jain clarifies that subsequent purchasers of land cannot challenge land acquisition proceedings or claim a lapse of acquisition. The Court overruled the High Court’s judgment, reinforcing the principle that only those with a vested interest at the time of acquisition can challenge it. This ruling provides much-needed clarity and consistency in land acquisition matters.