Supreme Court Upholds Land Acquisition: Delhi Development Authority Wins Against Godfrey Phillips (I) Ltd. & Ors. (06 May 2022)

Date of the Judgment: 06 May 2022
Citation: Civil Appeal No. 3073 of 2022 (Arising out of SLP (Civil) No. 23418 of 2017)
Judges: Hemant Gupta, J. and V. Ramasubramanian, J.
Can a subsequent purchaser of land claim that the acquisition proceedings have lapsed under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, even if the original landowners did not challenge the acquisition? The Supreme Court addressed this question in a recent judgment, overturning a High Court decision that favored the purchaser. The Court held that the acquisition proceedings initiated under the Land Acquisition Act, 1894, were valid, and the purchaser could not claim a lapse of acquisition.

Case Background

In 1980, the Delhi Development Authority (DDA) initiated the acquisition of 50,000 Bighas of land across 12 villages for planned development. Notifications under Section 4 of the Land Acquisition Act, 1894 (the Act) were issued on November 5, 1980, and November 25, 1980, for different villages. Declarations under Section 6 of the Act followed on May 27, 1985, June 6, 1985, June 7, 1985, and February 26, 1986. Awards were announced on or after May 20, 1987. M/s. Satluj Bhatta Co., the original landowners of 58 Bigha 14 Biswa, entered into an agreement to sell 28 Bigha 08 Biswa to Godfrey Phillips (I) Ltd. (the purchaser) on September 25, 1990. The purchaser subsequently bought the land through sale deeds dated August 30, 1991, and February 27, 1991.

Timeline

Course of Proceedings

The original landowners had filed a writ petition (Writ Petition No. 2736 of 1985) challenging the acquisition, which was dismissed by the High Court on December 2, 1985. A Special Leave Petition against this order was withdrawn on September 12, 1989. Subsequently, the acquisition process was challenged in other writ petitions. A Full Bench of the High Court in Balak Ram Gupta v. Union of India held that the period during which acquisition proceedings were stayed should be excluded while determining the validity of the declaration under Section 6 of the Act. However, a Division Bench in Shri B.R. Gupta v. Union of India & Ors. quashed the notifications under Section 6 due to lack of personal hearing for landowners. This decision was later clarified by the Supreme Court.

Legal Framework

The case revolves around the interpretation of the Land Acquisition Act, 1894, and the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. Key provisions include:

• Section 4 of the Land Acquisition Act, 1894: This section deals with the publication of a preliminary notification for land acquisition.
• Section 5A of the Land Acquisition Act, 1894: This section provides the procedure for filing objections against the acquisition.
• Section 6 of the Land Acquisition Act, 1894: This section deals with the declaration of intended acquisition after considering the objections.
  
  “6. Declaration that land is required for a public purpose.—(1) 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, and such declaration shall be published in the Official Gazette, and shall state the district or other territorial division in which the land is situate, the purpose for which it is needed, its approximate area, and where a plan shall have been made of the land, the place where such plan may be inspected.”
• Section 16 of the Land Acquisition Act, 1894: This section deals with taking possession of land after the award has been made.
  
  “16. Power to take possession.—When the Collector has made an award under section 11, he may take possession of the land, which shall thereupon vest absolutely in the Government, free from all encumbrances.”
• Section 17 of the Land Acquisition Act, 1894: This section deals with taking possession of land in cases of urgency.
• 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 acquisition proceedings if possession has not been taken or compensation has not been paid.
  
  “24. Land acquisition process under Act No. 1 of 1894 shall be deemed to have lapsed in certain cases. –
  (2) 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:
  Provided that where an award has been made and compensation in respect of a majority of land holdings has not been deposited in the account of the beneficiaries, then, all beneficiaries specified in the notification for acquisition under section 4 of the said Land Acquisition Act, shall be entitled to compensation in accordance with the provisions of this Act.”
• Section 31 of the Land Acquisition Act, 1894: This section deals with payment of compensation

These provisions are interpreted within the framework of the Constitution, ensuring that the acquisition of private property for public purposes is done fairly and transparently.

Arguments

The arguments presented by both sides are detailed below:

Appellant (Delhi Development Authority) Arguments

• The acquisition proceedings had attained finality under the Land Acquisition Act, 1894, and could not be reopened under Section 24 of the 2013 Act.

• The original landowners had failed to challenge the acquisition, and the purchaser, being a subsequent buyer, could not claim a lapse of acquisition.

• The judgment in Balbir Singh, which directed the landowners to deposit the compensation, was not a binding precedent because the judgment in Sudan Singh, which it was based on, was not found to be the correct law in subsequent judgments.

• Possession of the land was taken by the DDA, and compensation was paid or deposited, fulfilling the requirements of the Land Acquisition Act, 1894.

• The purchaser was attempting to indirectly challenge the acquisition, which had already achieved finality.

• The purchaser had no right to claim lapse of acquisition proceedings in view of the judgment of this Court reported as Meera Sahni v. Lt. Governor of Delhi and three Judge Bench Judgment in M. Venkatesh v. Bangalore Development Authority.

Respondent (Godfrey Phillips (I) Ltd.) Arguments

• The acquisition proceedings had lapsed under Section 24(2) of the 2013 Act because physical possession of some land was not taken, and compensation was not paid for all the land.

• The original land owners had paid back the amount of compensation by cheque as per the order of the High Court in Balbir Singh. Therefore, the compensation had not been paid in law.

• The purchaser had a right to claim lapsing of the acquisition proceedings in view of the judgment of this Court in Government (NCT of Delhi) v. Manav Dharam Trust & Anr.

• The High Court had correctly directed the purchaser to deposit the compensation amount, and the proceedings should be deemed to have lapsed.

• The possession of Khasra Nos. 376 (4-6), 377 (4-16), 381 Min (1-2), 383 (4-16), 386/1 Min (0-4) and 386/2 Min (0-6) were never taken by the revenue authorities.

The purchaser divided the land into two parts: Part A, where compensation was paid and possession taken, and Part B, where neither compensation was paid nor possession taken. The purchaser argued that the proceedings should lapse for both parts.

The innovativeness of the argument by the purchaser lies in attempting to use the 2013 Act to revive a claim that had been settled under the 1894 Act. They argued that the conditions for lapsing under the 2013 Act were met, despite the prior acquisition proceedings.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the primary issues can be summarized as follows:

1. Whether the acquisition proceedings initiated under the Land Acquisition Act, 1894, had lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
2. Whether a subsequent purchaser of land can claim the benefit of Section 24(2) of the 2013 Act, even if the original landowners did not challenge the acquisition.
3. Whether the judgment in Balbir Singh, directing the landowners to deposit the compensation, was a binding precedent.
4. Whether the deposit of compensation by the purchaser, as directed by the High Court, would lead to the lapsing of the acquisition.
5. Whether the possession of the land was taken by the authorities and whether the compensation was paid.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues:

Authorities

The Supreme Court relied on several judgments and legal provisions to arrive at its decision. The authorities are categorized by the legal point they address:

On the Interpretation of Section 24(2) of the 2013 Act:

• Indore Development Authority v. Manoharlal & Ors. [CITATION]: This case clarified that the word “or” in Section 24(2) should be read as “nor” or “and,” requiring both non-possession and non-payment for the acquisition to lapse. It also clarified the meaning of “paid” and “deposited” in the context of compensation. (Supreme Court of India)

On the Rights of Subsequent Purchasers:

• Meera Sahni v. Lt. Governor of Delhi [CITATION]: This case held that a subsequent purchaser cannot claim the benefit of Section 24(2) of the 2013 Act. (Supreme Court of India)
• M. Venkatesh v. Bangalore Development Authority [CITATION]: This three-judge bench judgment held that a subsequent purchaser cannot claim the benefit of Section 24(2) of the 2013 Act. (Supreme Court of India)
• Shiv Kumar & Anr. v. Union of India & Ors. [CITATION]: This larger bench judgment held that the judgment rendered by two-Judge Bench in Manav Dharam Trust was not found to be a good law. (Supreme Court of India)

On the Effect of Quashing of Acquisition Proceedings:

• Shyam Nandan Prasad & Ors. v. State of Bihar & Ors. [CITATION]: This case held that the notification under Section 6 of the Act should not be set aside as a whole and should have individualized justice vis-à-vis each writ petitioner. (Supreme Court of India)
• Chairman and Managing Director, Tamil Nadu Housing Board & Anr. v. S. Saraswathy & Ors. [CITATION]: This case held that a Section 6 declaration cannot be treated as quashed in its entirety unless it is quashed in toto or in its wholeness by the Court specifically. (Supreme Court of India)
• State of Haryana & Anr. v. Devander Sagar & Ors. [CITATION]: This case held that the acquisition proceedings cannot be quashed for one or two landowners. (Supreme Court of India)

On the Interpretation of the Land Acquisition Act, 1894:

• Abhey Ram & Ors. v. Union of India & Ors. [CITATION]: This three-judge bench judgment clarified that the quashing of a declaration under Section 6 of the Act only applies to the writ petitioners before the court and does not enure to the benefit of others. It also clarified that the operative part of the judgment in Balak Ram-II had not been brought to the notice of the Court in Sudan Singh. (Supreme Court of India)
• Delhi Administration v. Gurdip Singh Uban & Ors. [CITATION]: This case held that the three-Judge Bench judgment in Abhey Ram is binding in preference to the judgment of the two Judges in Sudan Singh. (Supreme Court of India)
• Delhi Administration v. Gurdip Singh Uban & Ors. [CITATION]: This case clarified that the operative order in Balak Ram-II must be confined to the writ absolute orders in each of the 73 writ petitions. (Supreme Court of India)

Overruled Judgments:

• Delhi Development Authority v. Sudan Singh [CITATION]: This judgment was effectively overruled by the three-judge bench in Abhey Ram & Ors. v. Union of India & Ors. [CITATION] and subsequently in Delhi Administration v. Gurdip Singh Uban & Ors. [CITATION]. The Supreme Court held that the operative part of the judgment in Balak Ram-II had not been brought to the notice of this Court in Sudan Singh, and therefore, the ratio in Sudan Singh had no application to the facts of the case.
• Government (NCT of Delhi) v. Manav Dharam Trust & Anr. [CITATION]: This judgment was not found to be a good law in Shiv Kumar & Anr. v. Union of India & Ors. [CITATION]. The Court held that the Division Bench in Manav Dharam Trust did not lay down the law correctly and ignored the binding value of the decisions of larger and coordinate Benches.

Judgment

The Supreme Court allowed the appeal filed by the Delhi Development Authority and set aside the order of the High Court. The Court held that the acquisition proceedings had not lapsed under Section 24(2) of the 2013 Act.

The Court analyzed the use of authorities in its reasoning as follows:

• Indore Development Authority v. Manoharlal & Ors. [CITATION]: The Court relied on this judgment to interpret the word “or” in Section 24(2) of the 2013 Act as “nor” or “and,” clarifying that both non-possession and non-payment are required for the acquisition to lapse.
• Meera Sahni v. Lt. Governor of Delhi [CITATION] and M. Venkatesh v. Bangalore Development Authority [CITATION]: These cases were used to establish that a subsequent purchaser cannot claim the benefit of Section 24(2) of the 2013 Act.
• Shiv Kumar & Anr. v. Union of India & Ors. [CITATION]: This judgment was used to overrule the judgment in Manav Dharam Trust and to establish that a subsequent purchaser cannot claim the benefit of Section 24(2) of the 2013 Act.
• Abhey Ram & Ors. v. Union of India & Ors. [CITATION], Delhi Administration v. Gurdip Singh Uban & Ors. [CITATION], and Delhi Administration v. Gurdip Singh Uban & Ors. [CITATION]: These judgments were used to clarify that the quashing of a declaration under Section 6 of the Act only applies to the writ petitioners before the court and does not enure to the benefit of others.
• Shyam Nandan Prasad & Ors. v. State of Bihar & Ors. [CITATION], Chairman and Managing Director, Tamil Nadu Housing Board & Anr. v. S. Saraswathy & Ors. [CITATION], and State of Haryana & Anr. v. Devander Sagar & Ors. [CITATION]: These judgments were used to establish that the acquisition proceedings cannot be quashed for one or two landowners.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• Thefact that the acquisition proceedings under the Land Acquisition Act, 1894, had reached finality. The Court emphasized that the proceedings had been initiated decades ago, and the DDA had taken possession of the land and paid compensation.
• The principle that a subsequent purchaser cannot claim the benefit of Section 24(2) of the 2013 Act if the original landowners did not challenge the acquisition. This principle was consistently upheld in several Supreme Court judgments.
• The interpretation of Section 24(2) of the 2013 Act, which requires both non-possession and non-payment for the acquisition to lapse. The Court found that the DDA had taken possession and paid compensation, either directly or by deposit, thus not meeting the conditions for lapsing.
• The need to uphold the sanctity of concluded legal proceedings. The Court was wary of allowing a subsequent purchaser to revive a claim that had been settled under the 1894 Act.
• The overruling of the judgment in Delhi Development Authority v. Sudan Singh by a larger bench in Abhey Ram & Ors. v. Union of India & Ors. and subsequently in Delhi Administration v. Gurdip Singh Uban & Ors. The judgment in Sudan Singh was the basis of the judgment in Balbir Singh, which was relied upon by the purchaser.
• The overruling of the judgment in Government (NCT of Delhi) v. Manav Dharam Trust & Anr. by a larger bench in Shiv Kumar & Anr. v. Union of India & Ors. The judgment in Manav Dharam Trust was relied upon by the purchaser.
• The Court’s concern that allowing the purchaser’s claim would create a loophole, enabling subsequent purchasers to circumvent the acquisition process.

Ratio Decidendi

The ratio decidendi of the judgment can be summarized as follows:

• Acquisition proceedings initiated under the Land Acquisition Act, 1894, do not lapse under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, if possession has been taken and compensation has been paid or deposited.
• A subsequent purchaser of land cannot claim the benefit of Section 24(2) of the 2013 Act if the original landowners did not challenge the acquisition.
• The word “or” in Section 24(2) of the 2013 Act must be interpreted as “nor” or “and,” requiring both non-possession and non-payment for the acquisition to lapse.
• The judgment in Delhi Development Authority v. Sudan Singh was overruled by a larger bench in Abhey Ram & Ors. v. Union of India & Ors. and subsequently in Delhi Administration v. Gurdip Singh Uban & Ors.
• The judgment in Government (NCT of Delhi) v. Manav Dharam Trust & Anr. was overruled by a larger bench in Shiv Kumar & Anr. v. Union of India & Ors.

Obiter Dicta

The judgment does not contain any significant obiter dicta. The Court’s observations were primarily focused on the specific facts and issues of the case.

Flowchart of the Decision

Ratio Table

Sentiment Analysis

The sentiment of the judgment can be summarized as follows:

Conclusion

The Supreme Court’s judgment in Delhi Development Authority vs. Godfrey Phillips (I) Ltd. & Ors. is a significant ruling that clarifies the interpretation of Section 24(2) of the 2013 Act and the rights of subsequent purchasers. The Court emphasized that the acquisition proceedings under the 1894 Act had attained finality and cannot be reopened by subsequent purchasers. The judgment reinforces the legal framework for land acquisition and ensures that the process is not undermined by subsequent claims.