Supreme Court Upholds Land Acquisition: DDA vs. Rajesh Dua (2023)

LEGAL ISSUE: Whether land acquisition proceedings lapse if compensation is deposited in the Reference Court but not directly paid to landowners and if possession is taken by drawing a panchnama.

CASE TYPE: Land Acquisition

Case Name: Delhi Development Authority vs. Rajesh Dua and Ors.

[Judgment Date]: 20 January 2023

Date of the Judgment: 20 January 2023

Citation: 2023 INSC 68

Judges: M.R. Shah, J. and C.T. Ravikumar, J.

Can the Delhi Development Authority (DDA) retain land acquired decades ago if compensation was deposited in court, but not directly paid to landowners? The Supreme Court of India recently addressed this question, clarifying the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The court’s decision hinged on whether depositing compensation in the Reference Court constitutes payment and the validity of possession taken via panchnama. This judgment was delivered by a two-judge bench comprising Justice M.R. Shah and Justice C.T. Ravikumar, with Justice M.R. Shah authoring the opinion.

Case Background

The case revolves around land acquired by the Delhi Development Authority (DDA) in 1964. The award for the acquisition was declared in 1967. According to the Land Acquisition Collector (LAC), the possession of the land was taken in 1967 by drawing a panchnama, and the compensation was deposited with the Reference Court in the same year. However, the original landowners, the respondents in this case, filed a writ petition in 2017, arguing that the acquisition should be deemed to have lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (Act, 2013) because the compensation was not actually paid to them.

Timeline:

Course of Proceedings

The High Court of Delhi, relying on its earlier decision in Smt. Harbans Kaur Vs. Govt. of NCT of Delhi and Ors., which in turn cited Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., ruled in favor of the landowners. The High Court held that depositing compensation with the Reference Court does not equate to payment to the landowners and that actual physical possession must be taken. Aggrieved by this decision, the DDA appealed to the Supreme Court.

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 (Act, 2013), which 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.”

The Supreme Court also considered Section 31 of the Land Acquisition Act, 1894, which deals with the payment of compensation.

The key question was the interpretation of “or” in Section 24(2) of the Act, 2013, specifically whether it should be read as “and” or “nor,” and whether depositing compensation in court constitutes payment.

Arguments

The respondents (original landowners) argued that the acquisition proceedings had lapsed under Section 24(2) of the Act, 2013, as the compensation was not actually tendered or paid to them, and mere deposit with the Reference Court was not sufficient. They contended that physical possession was not taken over by the land acquiring agency.

The appellant (DDA) argued that the compensation was deposited with the Reference Court in 1967, and possession was taken by drawing a panchnama, which is a permissible mode as held in Indore Development Authority Vs. Manoharlal and Ors. They contended that the High Court erred in relying on Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., which had been overruled.

The innovativeness of the argument from the respondent’s side was that it relied on a literal interpretation of the word “paid” in Section 24(2) of the Act, 2013, arguing that it necessitates direct payment to landowners and not just a deposit in court. The DDA’s argument was innovative in that it relied on the Constitution Bench decision in Indore Development Authority Vs. Manoharlal and Ors. to assert that the High Court’s reliance on the overruled judgment was erroneous.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issue the court addressed can be summarized as:

✓ Whether the acquisition proceedings initiated under the Land Acquisition Act, 1894, are deemed to have lapsed under Section 24(2) of the Act, 2013, when compensation was deposited in the Reference Court but not directly paid to the landowners, and possession was taken by drawing a panchnama.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Cases:

• Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183 (Supreme Court of India) – Overruled
• Smt. Harbans Kaur Vs. Govt. of NCT of Delhi and Ors. [W.P.(C) 5358 of 2014, decided on 02.02.2015] (High Court of Delhi) – Overruled
• Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129 (Supreme Court of India)

Legal Provisions:

• Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (Act, 2013)
• Section 31 of the Land Acquisition Act, 1894

Judgment

How each authority was viewed by the Court?

• The Supreme Court specifically overruled Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors. [CITATION], stating that the decision was no longer good law.
• The High Court’s decision in Smt. Harbans Kaur Vs. Govt. of NCT of Delhi and Ors. [CITATION], which relied on the overruled Pune Municipal Corporation case, was also implicitly overruled.
• The Supreme Court followed the Constitution Bench decision in Indore Development Authority Vs. Manoharlal and Ors. [CITATION], which clarified the interpretation of Section 24(2) of the Act, 2013.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the Constitution Bench judgment in Indore Development Authority Vs. Manoharlal and Ors., which clarified the interpretation of Section 24(2) of the Act, 2013. The court emphasized that the word “or” in Section 24(2) should be read as “nor” or “and,” meaning that the acquisition would lapse only if both possession was not taken and compensation was not paid. The Court also noted that depositing compensation in the Reference Court and taking possession by drawing a panchnama were permissible modes.

The court’s reasoning was primarily based on legal interpretations and precedents, with less emphasis on the specific factual aspects of the case. The ratio of fact to law is approximately 30:70, indicating a greater reliance on legal principles.

The Supreme Court reasoned that the High Court’s reliance on Pune Municipal Corporation was incorrect, as it had been overruled by a Constitution Bench. The Court emphasized that the word “or” in Section 24(2) of the Act, 2013 should be interpreted as “nor” or “and,” meaning that the acquisition would only lapse if both possession was not taken and compensation was not paid. The Court also held that depositing the compensation in the Reference Court and taking possession by drawing the panchnama were permissible modes of compliance.

The court quoted from Indore Development Authority Vs. Manoharlal and Ors.: “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.”

The court further stated: “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 noted: “The expression “paid” in the main part of Section 24(2) of the 2013 Act does not include a deposit of compensation in court.”

There were no minority opinions in this case.

Key Takeaways

• The Supreme Court clarified that the word “or” in Section 24(2) of the Act, 2013 should be read as “nor” or “and.”
• Depositing compensation in the Reference Court is considered a valid mode of payment for the purposes of Section 24(2).
• Taking possession of land by drawing a panchnama is a valid mode of taking possession.
• Land acquisition proceedings do not lapse if either possession has been taken or compensation has been paid, even if not directly to the landowners.
• This decision reinforces the finality of land acquisition proceedings where the authorities have taken possession and deposited compensation, even if not directly paid to the landowners.
• The decision in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors. has been explicitly overruled.

Directions

No specific directions were given by the Supreme Court in this 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,” and that depositing compensation in the Reference Court and taking possession by drawing a panchnama are valid modes of compliance. This judgment reaffirms the position of law established in Indore Development Authority Vs. Manoharlal and Ors. and overrules the previous position held in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., thereby clarifying the interpretation of Section 24(2) of the Act, 2013.

Conclusion

The Supreme Court allowed the appeal by the DDA, setting aside the High Court’s judgment. The Court held that the land acquisition proceedings had not lapsed under Section 24(2) of the Act, 2013, as the compensation was deposited in the Reference Court and possession was taken by drawing a panchnama. This decision clarifies the interpretation of Section 24(2) and reinforces the validity of land acquisition proceedings where authorities have taken possession and deposited compensation, even if not directly paid to the landowners.