Supreme Court Upholds Land Acquisition: Delhi Administration vs. Pawan Kumar (2022)

Date of the Judgment: May 06, 2022
Citation: 2022 INSC 452
Judges: Hemant Gupta, J. and V. Ramasubramanian, J.
Can a land acquisition be invalidated if the compensation wasn’t directly offered to the landowner, but deposited in court? The Supreme Court of India addressed this question in a recent case concerning land acquired by the Delhi Administration. The core issue revolved around whether the deposit of compensation in court fulfills the requirement of payment under the Land Acquisition Act and whether a subsequent purchaser can claim the lapsing of acquisition proceedings. The judgment was delivered by a two-judge bench comprising Justice Hemant Gupta and Justice V. Ramasubramanian, with the opinion authored by Justice Hemant Gupta.

Case Background

The case involves land in village Sayoorpur, New Delhi, which was acquired by the government. The original landowner had challenged the acquisition notifications of 1980 and 1985. The Land Acquisition Collector announced the award on May 14, 1987. The original landowner’s writ petition was dismissed on March 3, 2005. A review application was also dismissed on April 27, 2006. Subsequently, the respondent, Pawan Kumar, purchased the land on November 25, 2011.

The respondent then filed a writ petition, which was allowed by the High Court relying on an earlier judgment, Gyanender Singh & Ors. v. Union of India & Ors., which held that mere deposit of compensation in court does not amount to payment unless it has been first offered to the person interested. The High Court declared the acquisition proceedings as lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The Delhi Administration appealed this decision to the Supreme Court.

Timeline:

Course of Proceedings

The original landowner filed a writ petition challenging the notifications under Sections 4 and 6 of the Land Acquisition Act, 1894. This petition was dismissed on March 3, 2005. A review application was also dismissed on April 27, 2006. Subsequently, the respondent, Pawan Kumar, purchased the land on November 25, 2011. The respondent filed a writ petition which was allowed by the High Court, relying on the judgment in Gyanender Singh & Ors. v. Union of India & Ors., which held that mere deposit of compensation in court does not amount to payment unless it has been first offered to the person interested. The High Court declared the acquisition proceedings as lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The Delhi Administration then appealed to the Supreme Court.

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, 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 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 also considered Section 31(1) of the Land Acquisition Act, 1894, which deals with payment of compensation:

“On making an award under section 11, the Collector shall take possession of the land, and such land shall thereupon vest absolutely in the Government, free from all encumbrances.”

The Court also discussed the interpretation of the word “paid” in Section 24(2) of the 2013 Act, and whether it includes the deposit of compensation in court.

Arguments

Appellant’s Arguments (Delhi Administration):

• The appellant argued that the respondent is a subsequent purchaser, and therefore, not entitled to claim lapsing of the acquisition proceedings under the 2013 Act.
• The appellant contended that the compensation was deposited in the High Court on December 30, 2013, as the Additional District Judge’s court was closed for winter vacations. The High Court had ordered that this deposit be treated as a tender to the Additional District Judge’s court.
• The appellant submitted that the deposit of compensation in court should be considered as payment, especially when the landowner has not accepted the payment.

Respondent’s Arguments (Pawan Kumar):

• The respondent argued that the compensation was not offered to the original land owners before being deposited in the court.
• The respondent relied on the High Court’s judgment in Gyanender Singh, which held that mere deposit in court does not amount to payment unless it is first offered to the person interested.
• The respondent contended that since the compensation was not paid, the acquisition proceedings should be deemed to have lapsed under Section 24(2) of the 2013 Act.

Issues Framed by the Supreme Court

The Supreme Court addressed the following issues:

1. Whether a subsequent purchaser of land is entitled to claim lapsing of the acquisition proceedings under the 2013 Act.
2. Whether the deposit of compensation in court can be considered as payment of compensation under Section 24(2) of the 2013 Act.

Treatment of the Issue by the Court:

Authorities

The Supreme Court considered the following authorities:

Cases:

• Gyanender Singh & Ors. v. Union of India & Ors. (Delhi High Court): The High Court held that mere deposit of compensation in court does not amount to payment unless it has been first offered to the person interested.
• Indore Development Authority v. Manoharlal & Ors. [2020] 8 SCC 129 (Supreme Court of India): The Supreme Court held that twin conditions of non-payment of compensation and/or not taking possession would lead to the deemed lapse of proceedings. If either condition is satisfied, the proceedings cannot be declared lapsed. It also clarified that “paid” includes “tendered”.
• Delhi Development Authority v. Godfrey Phillips (I) Ltd. (Supreme Court of India): The Supreme Court held that a subsequent purchaser is not entitled to claim lapsing of the proceedings under the 2013 Act.

Legal Provisions:

• Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013: This section deals with the lapsing of land acquisition proceedings if compensation has not been paid or possession has not been taken for five years or more.
• Section 31(1) of the Land Acquisition Act, 1894: This section deals with the payment of compensation after the award has been made.

Judgment

The Supreme Court held that the High Court’s order was not sustainable and set it aside. The Court dismissed the writ petition filed by the respondent.

How each authority was viewed by the Court?

• The Court **overruled** the Delhi High Court’s decision in Gyanender Singh & Ors. v. Union of India & Ors. that mere deposit of compensation in court is not payment unless it has been first offered to the person interested.
• The Court **followed** the judgment in Indore Development Authority v. Manoharlal & Ors. [2020] 8 SCC 129, which clarified that the word “paid” in Section 24(2) includes “tendered.” The Court reiterated that the twin conditions of non-payment of compensation and/or not taking possession would lead to the deemed lapse of proceedings.
• The Court **followed** its decision in Delhi Development Authority v. Godfrey Phillips (I) Ltd. and held that a subsequent purchaser is not entitled to claim lapsing of the proceedings under the 2013 Act.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the interpretation of Section 24(2) of the 2013 Act and the principle that the government’s obligation to pay compensation is fulfilled when the amount is tendered, even if the landowner refuses to accept it. The Court emphasized that the purpose of the provision is to ensure that the government acts diligently in completing the acquisition process, not to penalize the government when a landowner refuses payment. The Court also considered that a subsequent purchaser cannot claim the benefit of lapsing of acquisition proceedings.

The Supreme Court reasoned that the term “paid” in Section 24(2) of the 2013 Act should be interpreted to include “tendered.” The Court observed that the obligation to pay is fulfilled when the amount is made available to the landowner, and the government should not be penalized if the landowner refuses to accept the payment. The Court quoted from Indore Development Authority v. Manoharlal & Ors.:

“when amount has been tendered, the obligation has been fulfilled by the Collector. Landowners cannot be forced to receive it. In case a person has not accepted the amount wants to take the advantage of non-payment, though the amount has remained (sic unpaid) due to his own act. It is not open to him to contend that the amount has not been paid to him, as such, there should be lapse of the proceedings.”

The Court also noted that the deposit of compensation in court was a result of the court being closed for winter vacations and the High Court had ordered that the same shall be treated as tendered to the Court of Additional District Judge.

The Court further stated:

“The expression “paid” in the main part of Section 24(2) of the 2013 Act does not include a deposit of compensation in court. The consequence of non-deposit is provided in the proviso to Section 24(2) in case it has not been deposited with respect to majority of landholdings then all beneficiaries (landowners) as on the date of notification for land acquisition under Section 4 of the 1894 Act shall be entitled to compensation in accordance with the provisions of the 2013 Act.”

The Court also relied on its judgment in Delhi Development Authority v. Godfrey Phillips (I) Ltd., which held that subsequent purchasers are not entitled to claim lapsing of acquisition proceedings.

Key Takeaways

• A subsequent purchaser of land cannot claim the lapsing of acquisition proceedings under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
• The term “paid” in Section 24(2) includes “tendered,” meaning that the government’s obligation to pay compensation is fulfilled when the amount is made available to the landowner, even if the landowner refuses to accept it.
• Deposit of compensation in court can be considered as payment if the amount was tendered.

Directions

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

Development of Law

The ratio decidendi of the case is that a subsequent purchaser cannot claim the benefit of the lapsing of acquisition proceedings under Section 24(2) of the 2013 Act. Further, the term “paid” in Section 24(2) includes “tendered,” meaning that the government’s obligation to pay compensation is fulfilled when the amount is made available to the landowner, even if the landowner refuses to accept it. This judgment clarifies the interpretation of Section 24(2) and sets aside the previous position of the Delhi High Court in Gyanender Singh & Ors. v. Union of India & Ors.

Conclusion

The Supreme Court’s decision in Delhi Administration vs. Pawan Kumar clarifies that subsequent purchasers cannot claim lapsing of land acquisition proceedings and that the term “paid” includes “tendered,” meaning that the government’s obligation to pay compensation is fulfilled when the amount is made available to the landowner. This judgment provides important guidance on the interpretation of Section 24(2) of the 2013 Act and reinforces the principle that the government should not be penalized when a landowner refuses to accept payment.