Supreme Court Upholds Land Acquisition: Delhi Development Authority vs. Batti (2023)

Date of the Judgment: 22 March 2023

Citation: 2023 INSC 2762

Judges: Abhay S. Oka, J. and Rajesh Bindal, J.

Can land acquisition be deemed to have lapsed if the compensation has not been paid, even if the possession of the land has been taken by the authorities? This was the core question before the Supreme Court in this case. The Court examined the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (the 2013 Act) concerning the lapse of land acquisition proceedings. The bench comprised Justices Abhay S. Oka and Rajesh Bindal, with the judgment authored by Justice Rajesh Bindal.

Case Background

The case originates from a land acquisition notification issued on June 23, 1989, under Section 4 of the Land Acquisition Act, 1894, for acquiring approximately 3,500 hectares of land for planned development in Delhi. This was followed by a notification under Section 6 of the same Act on June 20, 1990. The Land Acquisition Collector (DS), Delhi, announced Award No. 13/92-93 on June 19, 1992.

The respondent, Batti, claimed to be the successor-in-interest of the original landowner, Harkesh. Harkesh was purportedly the recorded owner of a 1/12th share of land in Village Ghari Mandu, Shahdara, Delhi. The respondent filed a writ petition in 2015, arguing that the acquisition had lapsed under Section 24(2) of the 2013 Act, because possession was not taken and compensation was not paid.

The High Court had ruled in favor of the respondent, stating that the acquisition had lapsed due to non-payment of compensation, relying on a previous Supreme Court judgment. The appellants, the Delhi Development Authority and the Government of NCT of Delhi, challenged this decision.

Timeline:

Course of Proceedings

The High Court of Delhi, relying on the Supreme Court’s judgment in Pune Municipal Corporation & Anr. vs. Harakchand Misirimal Solanki & Ors. (2014) 3 SCC 183, held that the land acquisition had lapsed because compensation had not been tendered to the respondent. The High Court, however, kept open the issue of the respondent’s entitlement to compensation due to a dispute regarding the title of the land.

The Delhi Development Authority and the Government of NCT of Delhi appealed this decision, arguing that the High Court’s ruling was incorrect in light of the Constitution Bench judgment in Indore Development Authority vs. Manoharlal and Others (2020) 8 SCC 129, which overruled the Pune Municipal Corporation case.

Legal Framework

The case primarily revolves around the interpretation of the following legal provisions:

• Section 4 of the Land Acquisition Act, 1894: This section deals with the publication of a preliminary notification for land acquisition. It states, “Whenever it appears to the appropriate Government that land in any locality is needed or is likely to be needed for any public purpose, a notification to that effect shall be published in the Official Gazette…”
• Section 6 of the Land Acquisition Act, 1894: This section pertains to the declaration of intended acquisition. It states, “Subject to the provisions of Part VII of this Act, when the appropriate Government is satisfied, after considering the report, if any, made under section 5A, sub-section (2), that any particular land is needed for a public purpose, or for a Company, a declaration shall be made to that effect under the signature of a Secretary to such Government or of some officer duly authorized to certify its orders…”
• 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. It 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 2013 Act was enacted to ensure fair compensation and transparency in land acquisition, replacing the 1894 Act. Section 24(2) of the 2013 Act provides a mechanism for the lapse of acquisition proceedings initiated under the 1894 Act if certain conditions are met.

Arguments

Arguments of the Appellants (Delhi Development Authority and Government of NCT of Delhi):

• The appellants argued that the High Court’s decision was based on the overruled judgment in Pune Municipal Corporation & Anr. vs. Harakchand Misirimal Solanki & Ors..
• They contended that the Constitution Bench judgment in Indore Development Authority vs. Manoharlal and Others had clarified that the word “or” in Section 24(2) of the 2013 Act should be read as “nor” or “and.” Thus, acquisition would lapse only if neither possession was taken nor compensation paid.
• The appellants submitted that since possession of the land had been taken, the acquisition could not be deemed to have lapsed, regardless of whether compensation was paid.
• They also pointed out that there was a dispute regarding the title of the land, which was why compensation had not been paid to the respondent’s predecessor.

Arguments of the Respondent (Batti):

• The respondent initially argued that physical possession of the land had not been taken, but later conceded that possession had been taken.
• The respondent’s primary argument was that since compensation had not been paid, the acquisition had lapsed under Section 24(2) of the 2013 Act.
• The respondent claimed to be the successor-in-interest of the original landowner and thus entitled to compensation.

Issues Framed by the Supreme Court

The Supreme Court addressed the following issue:

1. Whether the acquisition of land had lapsed under Section 24(2) of the 2013 Act, given that possession of the land had been taken by the authorities, but compensation had not been paid.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

The Supreme Court also considered the following legal provisions:

• Section 4 of the Land Acquisition Act, 1894
• Section 6 of the Land Acquisition Act, 1894
• Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013

Judgment

How each authority was viewed by the Court?

• The Supreme Court expressly stated that the judgment in Pune Municipal Corporation & Anr. vs. Harakchand Misirimal Solanki & Ors. (2014) 3 SCC 183 was overruled by the Constitution Bench in Indore Development Authority vs. Manoharlal and Others (2020) 8 SCC 129. The High Court’s reliance on the overruled judgment was deemed incorrect.
• The Supreme Court followed the ruling in Indore Development Authority vs. Manoharlal and Others (2020) 8 SCC 129, which clarified that the word “or” in Section 24(2) of the 2013 Act should be read as “nor” or “and”. This meant that the acquisition would lapse only if neither possession was taken nor compensation paid.

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 as clarified by the Constitution Bench in Indore Development Authority vs. Manoharlal and Others. The Court emphasized that the key factor for determining whether an acquisition lapses is whether possession of the land has been taken. The fact that the previous judgment in Pune Municipal Corporation was overruled also played a significant role in the Court’s reasoning. The Court noted that the High Court had incorrectly relied on the overruled judgment.

The Court’s reasoning was heavily based on the legal interpretation of Section 24(2) of the 2013 Act and the precedent set by the Constitution Bench. The factual aspects of the case, such as the dispute regarding the title of the land, played a secondary role in the Court’s decision.

The Court reasoned that since the possession was taken by the authorities, the acquisition did not lapse. The Court relied on the Indore Development Authority judgment, which clarified the interpretation of Section 24(2) of the 2013 Act. The Court rejected the argument that non-payment of compensation would lead to the lapse of the acquisition when possession has already been taken.

The Court also considered the fact that the High Court had relied on the overruled judgment of Pune Municipal Corporation. The Supreme Court emphasized that the law laid down by the Constitution Bench in Indore Development Authority was binding and had to be followed.

The Supreme Court quoted the following from the judgment in Indore Development Authority:

“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 other words, 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.”

“Once award has been passed on taking possession under Section 16 of the 1894 Act, the land vests in State there is no divesting provided under Section 24(2) of the 2013 Act, as once possession has been taken there is no lapse under Section 24(2).”

Key Takeaways

• The Supreme Court clarified that the word “or” in Section 24(2) of the 2013 Act should be read as “nor” or “and.”
• Land acquisition proceedings will not lapse if possession of the land has been taken, even if compensation has not been paid.
• The judgment in Pune Municipal Corporation & Anr. vs. Harakchand Misirimal Solanki & Ors. has been definitively overruled by the Indore Development Authority vs. Manoharlal and Others judgment.
• This decision reinforces the importance of the Indore Development Authority judgment in interpreting Section 24(2) of the 2013 Act.
• The ruling provides clarity on the conditions under which land acquisition proceedings lapse, ensuring that authorities can proceed with development projects once possession has been taken.

Directions

The Supreme Court allowed the appeals and set aside the impugned order passed by the High Court. The writ petition filed by the respondents in the High Court was dismissed.

Specific Amendments Analysis

There was no specific amendment analysis in the judgment.

Development of Law

The ratio decidendi of this case is that the acquisition of land does not lapse under Section 24(2) of the 2013 Act if possession of the land has been taken, regardless of whether compensation has been paid. This is based on the interpretation of the word “or” as “nor” or “and” in the said provision, as clarified by the Constitution Bench in Indore Development Authority vs. Manoharlal and Others. This judgment reaffirms the position of law laid down in Indore Development Authority and overrules any contrary view.

Conclusion

The Supreme Court’s judgment in Delhi Development Authority vs. Batti & Ors. clarifies the interpretation of Section 24(2) of the 2013 Act. The Court held that the acquisition of land does not lapse if possession has been taken, even if compensation has not been paid. This decision reinforces the principle established in Indore Development Authority vs. Manoharlal and Others and sets aside the High Court’s order, which had relied on the overruled judgment in Pune Municipal Corporation & Anr. vs. Harakchand Misirimal Solanki & Ors.. The judgment provides clarity and ensures that land acquisition proceedings are not easily overturned due to non-payment of compensation alone, provided possession has been taken.