Supreme Court Upholds Land Acquisition: Delhi Development Authority vs. Batti & Ors. (22 March 2023)

LEGAL ISSUE: Whether land acquisition proceedings lapse if compensation is not paid, despite possession being taken by the government. CASE TYPE: Land Acquisition. Case Name: Delhi Development Authority vs. Batti & Ors. Judgment Date: 22 March 2023

Date of the Judgment: 22 March 2023
Citation: Civil Appeal No.____________ OF 2023 (Arising out of Special Leave Petition (C) No.22803 of 2019)
Judges: Abhay S. Oka, J., Rajesh Bindal, J.

Can a land acquisition be deemed to have lapsed if the government has taken possession of the land but has not yet paid compensation? 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. This judgment clarifies the conditions under which land acquisition proceedings can lapse, particularly when possession has been taken by the acquiring authority but compensation has not been paid. The judgment was delivered by a two-judge bench comprising Justice Abhay S. Oka and Justice Rajesh Bindal, with Justice Rajesh Bindal authoring the opinion.

Case Background

The case involves a land acquisition initiated by the Delhi Development Authority (DDA) for planned development in Delhi. The acquisition process began with a notification under Section 4 of the Land Acquisition Act, 1894 on 23 June 1989, followed by a declaration under Section 6 of the same Act on 20 June 1990. The Land Acquisition Collector announced Award No. 13/92-93 on 19 June 1992.

The respondent, Batti, claimed that her father-in-law, late Harkesh, was the recorded owner of a 1/12th share of land in Village Ghari Mandu, Shahdara, Delhi. The land was part of the larger acquisition. The respondent filed a writ petition in 2015, contending that the acquisition had lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, because possession had not been taken and compensation had not been paid.

The Delhi Development Authority (DDA) argued that possession of the land had been taken and handed over to the Forest Department for development as a green belt. The DDA also contended that the respondent was not entitled to compensation because the land was recorded in the name of Gaon Sabha.

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 acquisition had lapsed because compensation had not been tendered to the respondent. The High Court, however, kept the issue of the respondent’s entitlement to compensation open due to a dispute regarding the title of the land.

The Delhi Development Authority (DDA) and the Government of NCT of Delhi appealed to the Supreme Court, arguing that the High Court’s order should be set aside in light of the Constitution Bench judgment in Indore Development Authority vs. Manoharlal and Others (2020) 8 SCC 129, which had overruled the Pune Municipal Corporation case. The appellants contended that the taking of possession was sufficient to sustain the acquisition, and that payment of compensation was not required when there was a dispute regarding the title of the land.

Legal Framework

The case revolves around 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). This section deals with the lapse of land acquisition proceedings initiated under the Land Acquisition Act, 1894 (the 1894 Act). Section 24(2) of the 2013 Act 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 in Indore Development Authority vs. Manoharlal and Others (2020) 8 SCC 129 interpreted the word “or” in Section 24(2) as “nor” or “and,” meaning that acquisition proceedings would only lapse if both possession had not been taken and compensation had not been paid.

Arguments

Arguments of the Appellant (Delhi Development Authority & Government of NCT of Delhi):

• The primary argument of the appellants was that the High Court’s decision was based on the judgment in Pune Municipal Corporation & Anr. vs. Harakchand Misirimal Solanki & Ors. (2014) 3 SCC 183, which was subsequently overruled by the Constitution Bench in Indore Development Authority vs. Manoharlal and Others (2020) 8 SCC 129.
• The appellants argued that the Constitution Bench had clarified that the word “or” in Section 24(2) of the 2013 Act should be read as “nor” or “and.” This means that for the acquisition to lapse, both possession must not have been taken and compensation must not have been paid.
• The appellants contended that in the present case, possession of the land had been taken by the State and handed over to the Forest Department. Therefore, even if compensation had not been paid, the acquisition would not lapse.
• It was further argued that there was a dispute regarding the title of the land, which was recorded in the name of Gaon Sabha. Due to this dispute, compensation could not have been paid to the respondent’s predecessor in interest.

Arguments of the Respondent (Batti):

• The respondent initially argued that physical possession of the land had not been taken. However, this argument was later given up.
• The respondent’s main argument was that compensation had not been paid, and therefore, the acquisition should be deemed to have lapsed under Section 24(2) of the 2013 Act.
• The respondent relied on the High Court’s judgment, which had favored the respondent based on the Pune Municipal Corporation case.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issue before the court was:

1. Whether the land acquisition proceedings lapse under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, if possession of the land has been taken but compensation has not been paid?

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Cases:

• Pune Municipal Corporation & Anr. vs. Harakchand Misirimal Solanki & Ors. (2014) 3 SCC 183 – Supreme Court of India. This case was relied upon by the High Court to hold that the acquisition had lapsed.
• Indore Development Authority vs. Manoharlal and Others (2020) 8 SCC 129 – Supreme Court of India. This Constitution Bench judgment overruled the Pune Municipal Corporation case and clarified the interpretation of Section 24(2) of the 2013 Act.

Statutes:

• The Land Acquisition Act, 1894.
• The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, particularly Section 24(2).

Judgment

How each authority was viewed by the Court?

• Pune Municipal Corporation & Anr. vs. Harakchand Misirimal Solanki & Ors. (2014) 3 SCC 183: The Supreme Court explicitly stated that this judgment was overruled by the Constitution Bench in Indore Development Authority vs. Manoharlal and Others (2020) 8 SCC 129. Therefore, it was not considered a valid precedent.
• Indore Development Authority vs. Manoharlal and Others (2020) 8 SCC 129: The Supreme Court relied heavily on this Constitution Bench judgment, which clarified that the word “or” in Section 24(2) of the 2013 Act should be read as “nor” or “and.” This interpretation was crucial in the court’s reasoning that the acquisition did not lapse because possession had been taken.

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. The Court emphasized that the word “or” in Section 24(2) should be read as “nor” or “and,” meaning that both non-taking of possession and non-payment of compensation are required for the acquisition to lapse. The Court also took note of the fact that the High Court had relied on a judgment that was later overruled. The fact that the possession was taken by the State was a crucial factor in deciding the case.

Logical Reasoning:

The Supreme Court rejected the argument that the acquisition had lapsed due to non-payment of compensation. The Court emphasized that the High Court’s reliance on the Pune Municipal Corporation case was incorrect, as that case had been overruled. The Court stated that the correct interpretation of Section 24(2) of the 2013 Act, as laid down in Indore Development Authority, required both non-taking of possession and non-payment of compensation for the acquisition to lapse. The Court noted that possession had been taken in this case, and therefore, the acquisition was valid.

The Court’s reasoning was based on the following key points:

• The High Court’s reliance on Pune Municipal Corporation was incorrect as it was overruled.
• The Constitution Bench in Indore Development Authority clarified that the word “or” in Section 24(2) should be read as “nor” or “and.”
• Since possession of the land had been taken, the acquisition did not lapse, irrespective of whether compensation had been paid.

The Supreme Court quoted the following from Indore Development Authority vs. Manoharlal and Others (2020) 8 SCC 129:

“362. Resultantly, the decision rendered in Pune Municipal Corporation & Anr. (supra) is hereby overruled and all other decisions in which Pune Municipal Corporation (supra) has been followed, are also overruled.”

“366.3. 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.”

The court did not discuss any dissenting opinions, as it was a unanimous decision.

Key Takeaways

• Land acquisition proceedings will not lapse under Section 24(2) of the 2013 Act if possession of the land has been taken, even if compensation has not been paid.
• The word “or” in Section 24(2) of the 2013 Act should be read as “nor” or “and,” as clarified by the Supreme Court in Indore Development Authority vs. Manoharlal.
• The judgment in Pune Municipal Corporation & Anr. vs. Harakchand Misirimal Solanki & Ors. (2014) 3 SCC 183 has been overruled by the Constitution Bench in Indore Development Authority vs. Manoharlal and Others (2020) 8 SCC 129.
• This judgment reinforces the importance of the Indore Development Authority ruling in interpreting Section 24(2) of the 2013 Act.

Directions

The Supreme Court did not issue any specific directions other than setting aside the High Court’s order and dismissing the writ petition filed by the respondents.

Development of Law

The ratio decidendi of this case is that the word “or” in Section 24(2) of the 2013 Act must be read as “nor” or “and,” as held in Indore Development Authority vs. Manoharlal. This means that both non-taking of possession and non-payment of compensation are required for the land acquisition to lapse. This judgment reaffirms the position of law established in Indore Development Authority and sets aside the previous position of law as laid down in Pune Municipal Corporation. This case clarifies the interpretation of Section 24(2) of the 2013 Act and ensures that land acquisitions where possession has been taken will not lapse simply because compensation has not been paid.

Conclusion

The Supreme Court allowed the appeals filed by the Delhi Development Authority and the Government of NCT of Delhi, setting aside the High Court’s order. The Supreme Court held that the land acquisition in question had not lapsed because possession of the land had been taken by the government, even though compensation had not been paid. The ruling reinforces the interpretation of Section 24(2) of the 2013 Act as clarified by the Constitution Bench in Indore Development Authority vs. Manoharlal.