Supreme Court Upholds Land Acquisition: Agra Development Authority vs. Anek Singh (2022)

Date of the Judgment: May 20, 2022

Citation: 2022 INSC 480

Judges: M. R. Shah, J., B.V. Nagarathna, J.

Can land acquisition be invalidated if the compensation hasn’t been directly paid to the landowners, even when the authorities have taken possession and deposited the compensation with the designated officer? The Supreme Court of India addressed this critical question in a recent case involving the Agra Development Authority. The core issue revolved around the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, specifically whether the non-payment of compensation directly to the landowners would result in the lapse of acquisition proceedings. The judgment was delivered by a two-judge bench comprising Justice M.R. Shah and Justice B.V. Nagarathna, with the opinion authored by Justice M.R. Shah.

Case Background

The Agra Development Authority initiated land acquisition proceedings. The Authority claimed that they had taken possession of the land, mutated the revenue records in their name, and even carried out development work on the land. The Authority also stated that the entire compensation had been deposited with the Special Land Acquisition Officer. However, the original landowners (respondents) argued that they had not received the compensation directly, and therefore, the acquisition proceedings should lapse under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The High Court of Judicature at Allahabad sided with the landowners, leading the Agra Development Authority to appeal to the Supreme Court.

Timeline

Course of Proceedings

The High Court of Judicature at Allahabad allowed the writ petition filed by the landowners, holding that the acquisition proceedings had lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The High Court relied on the Supreme Court’s decision in Pune Municipal Corporation and another versus Harakchand Misirimal Solanki and others (2014) 3 SCC 183, which stated that if compensation was not actually paid to the landowners, the acquisition would lapse. The Agra Development Authority appealed this decision to the Supreme Court.

Legal Framework

The central legal provision in this case is 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) 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 key issue is the interpretation of the word “or” in the phrase “possession of the land has not been taken or the compensation has not been paid.” The High Court interpreted this to mean that if either possession was not taken or compensation was not paid, the acquisition would lapse. The Supreme Court, however, had to consider the interpretation of this provision in light of its previous judgments.

Arguments

Agra Development Authority’s Arguments:

• The Authority contended that it had taken possession of the land and the land was mutated in their name in the revenue records.
• They argued that development works had already been carried out on the land, and the entire compensation had been deposited with the Special Land Acquisition Officer.
• The Authority submitted that the landowners deliberately did not collect the compensation for the remaining land. Therefore, the acquisition proceedings should not lapse due to the landowners’ fault.

Landowners’ Arguments:

• The landowners argued that the compensation was not actually paid to them.
• They relied on the High Court’s interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, and the Supreme Court’s decision in Pune Municipal Corporation vs. Harakchand Misirimal Solanki (2014) 3 SCC 183, which supported their claim that non-payment of compensation leads to lapse of acquisition proceedings.

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was:

1. Whether the acquisition proceedings with respect to the land in question shall be deemed to have lapsed under sub-section (2) of Section 24 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

How each authority was viewed by the Court?

• The High Court relied on Pune Municipal Corporation and another versus Harakchand Misirimal Solanki and others (2014) 3 SCC 183*, which was **overruled** by the Constitution Bench in Indore Development Authority versus Manoharlal and others (2020) 8 SCC 129*. The Supreme Court followed the interpretation of Section 24(2) as laid down in Indore Development Authority versus Manoharlal and others (2020) 8 SCC 129*.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the Constitution Bench’s ruling in Indore Development Authority vs. Manoharlal (2020) 8 SCC 129, which clarified the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The court emphasized that the word “or” in the provision should be read as “nor” or “and,” meaning that the acquisition proceedings would only lapse if neither possession had been taken nor compensation had been paid. The court also considered that the Agra Development Authority had deposited the compensation with the Special Land Acquisition Officer and taken possession of the land, which satisfied the requirements of the law.

Logical Reasoning:

The Supreme Court rejected the High Court’s interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which was based on the overruled judgment of Pune Municipal Corporation vs. Harakchand Misirimal Solanki (2014) 3 SCC 183. The court stated that the High Court’s reliance on a judgment that had been specifically overruled by a Constitution Bench was unsustainable. The Supreme Court clarified that the intent of Section 24(2) was to protect landowners from the inaction of authorities, and not to allow landowners to benefit from their own refusal to accept compensation. The court noted that the Agra Development Authority had deposited the compensation with the Special Land Acquisition Officer, and had taken possession of the land, which satisfied the requirements of the law. The court stated that the landowners cannot claim the acquisition has lapsed due to non-payment when the compensation has been deposited.

The Supreme Court emphasized the importance of adhering to the law as interpreted by the Constitution Bench. It stated that the High Court’s decision was based on an incorrect interpretation of the law and that the acquisition proceedings should not be deemed to have lapsed. The court also highlighted that the landowners cannot claim the acquisition has lapsed due to non-payment when the compensation has been deposited.

The Supreme Court’s decision was based on the following reasons:

• The High Court relied on the decision in Pune Municipal Corporation vs. Harakchand Misirimal Solanki (2014) 3 SCC 183, which was overruled by Indore Development Authority vs. Manoharlal (2020) 8 SCC 129.
• The Constitution Bench in Indore Development Authority vs. Manoharlal (2020) 8 SCC 129 clarified that the word “or” in Section 24(2) should be read as “nor” or “and”.
• The Agra Development Authority had taken possession of the land and deposited the compensation with the Special Land Acquisition Officer.
• The landowners cannot claim the acquisition has lapsed due to non-payment when the compensation has been deposited.

The court quoted the following from the judgment:

• “However, the decision of this Court in the case of Pune Municipal Corporation (supra) has been subsequently over­ruled by the Constitution Bench of this Court in the case of Indore Development Authority versus Manoharlal and others, (2020) 8 SCC 129.”
• “The word “or” used in Section 24(2) between possession and compensation has to be read as “nor” or as “and”. 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 case a person has been tendered the compensation as provided under Section 31(1) of the 1894 Act, it is not open to him to claim that acquisition has lapsed under Section 24(2) due to non­payment or non­deposit of compensation in court.”

Key Takeaways

• The Supreme Court clarified that the word “or” in Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, should be read as “nor” or “and.”
• Land acquisition proceedings do not lapse if either possession of the land has been taken or compensation has been paid/deposited.
• Landowners cannot claim a lapse in acquisition proceedings if they refused to accept compensation that was offered or deposited by the authorities.
• This judgment reinforces the importance of adhering to the interpretation of the law as laid down by the Constitution Bench of the Supreme Court.

Directions

The Supreme Court quashed and set aside the High Court’s judgment and dismissed the writ petition filed by the original landowners.

Development of Law

The ratio decidendi of this case is that the word “or” in Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, should be read as “nor” or “and.” This clarifies that land acquisition proceedings do not lapse if either possession has been taken or compensation has been paid/deposited. This decision reaffirms the position of law as laid down by the Constitution Bench in Indore Development Authority vs. Manoharlal (2020) 8 SCC 129 and overrules the position taken in Pune Municipal Corporation vs. Harakchand Misirimal Solanki (2014) 3 SCC 183.

Conclusion

The Supreme Court’s judgment in Agra Development Authority vs. Anek Singh clarifies the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. By overruling the High Court’s decision, the Supreme Court upheld the validity of the land acquisition proceedings initiated by the Agra Development Authority. The judgment underscores that the deposit of compensation with the Land Acquisition Officer and taking possession of the land are sufficient to prevent the lapse of acquisition proceedings, even if the compensation has not been directly paid to the landowners. This decision provides clarity on the issue and ensures that land acquisition proceedings are not easily invalidated due to technicalities.