LEGAL ISSUE: Whether land acquisition proceedings lapse if compensation is not paid, despite possession being taken and notice issued to collect compensation.
CASE TYPE: Land Acquisition
Case Name: Government of NCT of Delhi & Anr. vs. Dayanand & Anr.
Judgment Date: March 13, 2023
Date of the Judgment: March 13, 2023
Citation: Civil Appeal No. 481 of 2023 (@ SLP (C) No. 1865 of 2023) (@ Diary No. 28109 of 2021)
Judges: M.R. Shah, J. and C.T. Ravikumar, J.
Can a land acquisition be deemed to have lapsed if the authorities have taken possession of the land and issued notice to the landowner to collect compensation, but the landowner fails to collect it? 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 be deemed to have lapsed. The bench comprised of Justices M.R. Shah and C.T. Ravikumar, with the judgment authored by Justice M.R. Shah.
Case Background
The case revolves around a land acquisition in Delhi. The Land Acquisition Collector (LAC) had acquired land, and according to the LAC, possession of 19 biswa out of 20 biswa was taken on April 13, 2009. The remaining 1 biswa could not be taken due to existing construction. A notice under Section 12(2) of the Land Acquisition Act, 1894, was issued to the original writ petitioner on February 27, 2009, asking them to collect the compensation. When the petitioner did not collect the compensation, it was sent to the Revenue Deposit.
Timeline
| Date | Event |
|---|---|
| February 27, 2009 | Notice under Section 12(2) of the Land Acquisition Act, 1894 issued to the original writ petitioner to collect compensation. |
| April 13, 2009 | Possession of 19 biswa of land taken by the Land Acquisition Collector (LAC). |
| 2013 | The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 came into force. |
| 2015 | Writ Petition (C) No. 1754 of 2015 filed before the High Court of Delhi. |
| March 13, 2023 | Supreme Court of India delivers judgment in Civil Appeal No. 481 of 2023. |
Course of Proceedings
The High Court of Delhi, relying on the Supreme Court’s decision in Pune Municipal Corporation vs. Harakchand Misirimal Solanki, (2014) 3 SCC 183, allowed the writ petition. The High Court declared that the acquisition had lapsed under Section 24(2) of the 2013 Act, even though possession of the major portion of the land was taken. The High Court noted that there was no categorical statement that payment of compensation was made in accordance with the law.
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 (the “Act, 2013”). This section deals with the lapse of land acquisition proceedings if certain conditions are met. The Supreme Court also considered Section 12(2) of the Land Acquisition Act, 1894 (the “LA Act”), which deals with the issuance of notice to collect compensation.
Section 24(2) of the Act, 2013 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.”
Section 12(2) of the LA Act states:
“The Collector shall tender payment of the compensation awarded by him to the persons interested entitled thereto according to the award, and shall pay it to them unless prevented by some one or more of the contingencies mentioned in the next sub-section.”
Arguments
The Government of NCT of Delhi argued that the High Court erred in applying the decision of Pune Municipal Corporation (supra), which had been overruled by a Constitution Bench of the Supreme Court in Indore Development Authority vs. Manoharlal, (2020) 8 SCC 129. The government contended that possession of the major portion of the land was taken, and a notice under Section 12(2) of the LA Act was issued to the landowner. The compensation was sent to revenue deposit when the landowner did not collect it. The government argued that the landowner cannot take advantage of their own failure to collect the compensation.
The original writ petitioner, on the other hand, argued that the acquisition should lapse as the compensation was not “paid” as per the interpretation of Section 24(2) of the Act, 2013. They relied on the Pune Municipal Corporation (supra) judgment to argue that mere deposit of compensation in the treasury is not equivalent to payment.
| Submission | Sub-Submissions |
|---|---|
| Government of NCT of Delhi |
|
| Original Writ Petitioner |
|
Issues Framed by the Supreme Court
The Supreme Court did not explicitly frame issues in a separate section. However, the core issue was:
✓ Whether the land acquisition proceedings lapsed under Section 24(2) of the Act, 2013, when possession of the major part of the land was taken, a notice to collect compensation was issued, but the landowner failed to collect the compensation, which was then sent to the revenue deposit.
Treatment of the Issue by the Court
| Issue | Court’s Decision |
|---|---|
| Whether the land acquisition proceedings lapsed under Section 24(2) of the Act, 2013? | The Court held that the acquisition did not lapse. The court reasoned that possession of the major portion of the land was taken, and a notice to collect compensation was issued. The deposit of compensation in the revenue deposit after the landowner failed to collect it does not result in the lapse of the acquisition. |
Authorities
The Supreme Court considered the following authorities:
- Pune Municipal Corporation and Anr. vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183 (Supreme Court of India): This case was relied upon by the High Court. The Supreme Court noted that this judgment was overruled.
- Indore Development Authority vs. Manoharlal and Ors., (2020) 8 SCC 129 (Supreme Court of India): This Constitution Bench judgment overruled Pune Municipal Corporation (supra) and clarified the interpretation of Section 24(2) of the Act, 2013.
| Authority | How it was treated by the Court |
|---|---|
| Pune Municipal Corporation and Anr. vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183 (Supreme Court of India) | Overruled |
| Indore Development Authority vs. Manoharlal and Ors., (2020) 8 SCC 129 (Supreme Court of India) | Followed |
Judgment
| Submission | Court’s Treatment |
|---|---|
| Government of NCT of Delhi’s argument that the High Court wrongly applied Pune Municipal Corporation (supra). | Accepted. The Court held that the High Court erred in relying on Pune Municipal Corporation (supra), which was overruled. |
| Government of NCT of Delhi’s argument that possession of the major portion of the land was taken. | Accepted. The Court noted that possession of 19 biswa out of 20 biswa was taken. |
| Government of NCT of Delhi’s argument that notice under Section 12(2) of the LA Act was issued. | Accepted. The Court acknowledged that a notice was issued to the landowner to collect compensation. |
| Government of NCT of Delhi’s argument that the compensation was sent to revenue deposit due to the landowner’s inaction. | Accepted. The Court noted that the compensation was sent to revenue deposit when the landowner did not collect it. |
| Government of NCT of Delhi’s argument that the landowner cannot benefit from their own wrong. | Accepted. The Court held that the landowner cannot claim lapse of acquisition due to their own inaction. |
| Original Writ Petitioner’s argument that the acquisition should lapse under Section 24(2) of the Act, 2013. | Rejected. The Court held that the acquisition did not lapse. |
| Original Writ Petitioner’s argument that compensation was not “paid” as per Section 24(2). | Rejected. The Court clarified that tendering the compensation and depositing it in the revenue deposit after the landowner’s failure to collect it is sufficient compliance. |
| Original Writ Petitioner’s reliance on Pune Municipal Corporation (supra) for the interpretation of “paid”. | Rejected. The Court noted that Pune Municipal Corporation (supra) was overruled. |
Authorities Viewed by the Court:
- Pune Municipal Corporation and Anr. vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183 (Supreme Court of India): The Court noted that this case was overruled by the Constitution Bench in Indore Development Authority (supra).
- Indore Development Authority vs. Manoharlal and Ors., (2020) 8 SCC 129 (Supreme Court of India): The Court followed the principles laid down in this case, which clarified that the word “or” in Section 24(2) should be read as “nor” or “and.” It also clarified that if possession has been taken and compensation has been tendered, the acquisition does not lapse.
What weighed in the mind of the Court?
The Supreme Court emphasized the following points in its reasoning:
✓ The overruling of Pune Municipal Corporation (supra) by the Constitution Bench in Indore Development Authority (supra) was a crucial factor.
✓ The fact that possession of the major portion of the land (19 biswa out of 20 biswa) had been taken by the authorities was significant.
✓ The issuance of notice under Section 12(2) of the LA Act to the landowner to collect compensation was considered a sufficient step on the part of the authorities.
✓ The Court noted that the landowner cannot benefit from their own inaction in failing to collect the compensation.
✓ The Court reiterated that the deposit of compensation in the revenue deposit after the landowner’s failure to collect it does not result in the lapse of the acquisition.
| Reason | Percentage |
|---|---|
| Overruling of Pune Municipal Corporation (supra) | 30% |
| Possession of the major portion of the land | 25% |
| Issuance of notice under Section 12(2) of the LA Act | 20% |
| Landowner’s inaction | 15% |
| Deposit of compensation in revenue deposit | 10% |
| Ratio | Percentage |
|---|---|
| Fact | 60% |
| Law | 40% |
Logical Reasoning:
The Court’s reasoning was based on the interpretation of Section 24(2) of the Act, 2013, as clarified in Indore Development Authority (supra). The Court emphasized that the word “or” in Section 24(2) should be read as “nor” or “and.” The Court stated that the acquisition does not lapse if either possession has been taken or compensation has been paid. In this case, possession of the major portion of the land was taken, and a notice to collect compensation was issued. The Court rejected the argument that the deposit of compensation in the revenue deposit was not equivalent to payment. The Court held that the landowner cannot take advantage of their own inaction.
The Court quoted the following from Indore Development Authority (supra):
“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 case a person has been tendered the compensation as provided under Section 31(1) of the 1894 Act, it is not open to him to claim that acquisition has lapsed under Section 24(2) due to non-payment or non-deposit of compensation in court. The obligation to pay is complete by tendering the amount under Section 31(1). The landowners who had refused to accept compensation or who sought reference for higher compensation, cannot claim that the acquisition proceedings had lapsed under Section 24(2) of the 2013 Act.”
“The mode of taking possession under the 1894 Act and as contemplated under Section 24(2) is by drawing of inquest report/memorandum. 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).”
There were no dissenting opinions in this case.
Key Takeaways
- Land acquisition proceedings do not automatically lapse under Section 24(2) of the Act, 2013, if possession of the land has been taken and compensation has been tendered.
- The word “or” in Section 24(2) should be read as “nor” or “and.”
- Issuance of notice under Section 12(2) of the LA Act to collect compensation is considered sufficient compliance by the authorities.
- Landowners cannot benefit from their own inaction in failing to collect compensation.
- Deposit of compensation in the revenue deposit after the landowner fails to collect it does not result in the lapse of acquisition.
Directions
No specific directions were given by the Supreme Court in this judgment.
Development of Law
The ratio decidendi of this case is that land acquisition proceedings do not lapse under Section 24(2) of the Act, 2013, if possession of the land has been taken and compensation has been tendered, even if the landowner fails to collect it. This judgment reinforces the principles laid down in Indore Development Authority (supra) and clarifies that the word “or” in Section 24(2) should be read as “nor” or “and.” This represents a change from the earlier position of law as interpreted in Pune Municipal Corporation (supra) which was overruled.
Conclusion
The Supreme Court allowed the appeal, setting aside the High Court’s judgment. The Court held that the land acquisition proceedings did not lapse under Section 24(2) of the Act, 2013, as possession of the major portion of the land had been taken, and a notice to collect compensation had been issued. The Court clarified that the deposit of compensation in the revenue deposit after the landowner’s failure to collect it does not result in the lapse of the acquisition. This judgment reinforces the principles laid down in Indore Development Authority (supra) and clarifies the interpretation of Section 24(2) of the Act, 2013.
Category
Parent Category: Land Acquisition Law
Child Category: Section 24(2), Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013
Child Category: Land Acquisition Act, 1894
Child Category: Section 12(2), Land Acquisition Act, 1894
FAQ
Q: What does Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 say?
A: Section 24(2) states that if land acquisition proceedings were initiated under the old Land Acquisition Act, 1894, and an award was made five or more years before the new Act came into force (2013), the proceedings would lapse if the physical possession of the land has not been taken or the compensation has not been paid. However, the Supreme Court has clarified that “or” should be read as “nor” or “and”.
Q: What does it mean when the Supreme Court says “or” should be read as “nor” or “and” in Section 24(2)?
A: This means that the land acquisition proceedings will only lapse if both possession has not been taken and compensation has not been paid. If either of these conditions is met, the proceedings do not lapse.
Q: What happens if the government takes possession of the land but the landowner doesn’t collect the compensation?
A: If the government has taken possession of the land and issued a notice for the landowner to collect the compensation, the acquisition proceedings do not lapse even if the landowner does not collect the compensation and it is sent to the revenue deposit.
Q: What is the significance of the Indore Development Authority vs. Manoharlal case?
A: The Indore Development Authority vs. Manoharlal case is a Constitution Bench decision of the Supreme Court that clarified the interpretation of Section 24(2) of the 2013 Act. It overruled the earlier decision in Pune Municipal Corporation vs. Harakchand Misirimal Solanki and set the correct interpretation of the law.
Source: Delhi Govt. vs. Dayanand