Supreme Court Upholds Land Acquisition: Government of NCT of Delhi vs. Jai Pal (2023)

Date of the Judgment: March 13, 2023

Citation: Civil Appeal No. 1616 of 2023 (@ SLP (C) No. 4883 of 2023) (@ Diary No. 22582 of 2020)

Judges: M.R. Shah, J. and Manoj Misra, J.

Can land acquisition proceedings be invalidated if compensation has not been paid, even if the government has taken possession of the land? The Supreme Court of India addressed this critical question in a recent case, 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 has significant implications for land acquisition disputes across the country. The bench comprised Justices M.R. Shah and Manoj Misra, with the judgment authored by Justice M.R. Shah.

Case Background

The case involves a dispute over land acquisition initiated under the Land Acquisition Act, 1894. The Government of NCT of Delhi sought to acquire land, and the original landowner, Jai Pal, challenged the acquisition, arguing that it had lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, because compensation had not been paid. The government claimed that possession of the land had been taken on July 11, 2008. The High Court of Delhi ruled in favor of the landowner, stating that the acquisition had lapsed due to non-payment of compensation, relying on a previous Supreme Court decision.

Timeline:

Course of Proceedings

The High Court of Delhi allowed the writ petition filed by Jai Pal, declaring that the land acquisition proceedings had lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The High Court based its decision on the premise that compensation had not been paid to the landowner, relying on the Supreme Court’s decision in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183. The Government of NCT of Delhi then appealed to the Supreme Court.

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. This section addresses the lapse of land acquisition proceedings initiated under the Land Acquisition Act, 1894. 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.”

The Supreme Court also referred to Section 16 of the Land Acquisition Act, 1894, which deals with the government’s power to take possession of land after an award has been made. The Court also discussed Section 31 of the Land Acquisition Act, 1894, which outlines the process for paying compensation to landowners.

Arguments

Arguments by the Government of NCT of Delhi:

• The government argued that the High Court erred in applying the decision of Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183, as it had been overruled by a Constitution Bench in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129.
• The government submitted that the possession of the land in question was taken on July 11, 2008.
• The government contended that, according to the ruling in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129, if possession has been taken, the acquisition does not lapse even if compensation has not been paid.

Arguments by the Respondent (Jai Pal):

• The respondent argued that since compensation had not been paid, the acquisition proceedings should be deemed to have lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
• The respondent relied on the High Court’s decision, which was based on the now-overruled judgment in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183.

Submissions Table

Issues Framed by the Supreme Court

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

1. Whether the acquisition proceedings lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, due to non-payment of compensation, despite the government claiming to have taken possession of the land.

Treatment of the Issue by the Court

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

Authorities

The Supreme Court considered the following authorities:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

The Supreme Court explicitly overruled the decision in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183, stating that it was no longer good law. The Court relied heavily on the Constitution Bench decision in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129, which clarified the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The Court stated that the word “or” in Section 24(2) should be read as “nor” or “and,” meaning that the acquisition only lapses if both possession has not been taken and compensation has not been paid.

What weighed in the mind of the Court?

The Court’s decision was primarily driven by the need to adhere to the correct interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, as clarified by the Constitution Bench in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129. The Court emphasized that the High Court’s reliance on the overruled decision in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183 was incorrect. The Court also considered the fact that the government claimed to have taken possession of the land, which, under the correct interpretation of Section 24(2), meant that the acquisition did not lapse.

The Court’s reasoning was primarily based on the legal interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, and the precedent set by the Constitution Bench in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129. The factual aspect of the government’s claim of possession was a secondary consideration, but it was necessary to apply the legal interpretation to the facts of the case.

Logical Reasoning

The Supreme Court rejected the High Court’s interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which relied on the overruled judgment in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183. The Court clarified that the correct interpretation, as laid down in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129, is that the acquisition proceedings lapse only if both possession has not been taken and compensation has not been paid. The Court noted that the government claimed to have taken possession of the land, which meant that the acquisition did not lapse, even if compensation had not been paid.

The Court stated:

“Resultantly, the decision rendered in Pune Municipal Corpn. [Pune Municipal Corpn. v. Harakchand Misirimal Solanki, (2014) 3 SCC 183] is hereby overruled and all other decisions in which Pune Municipal Corpn. [Pune Municipal Corpn. v. Harakchand Misirimal Solanki, (2014) 3 SCC 183] has been followed, are also overruled.”

The Court further clarified:

“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 concluded:

“Applying the law laid down by this Court in the case of Indore Development Authority (supra) to the facts of the case on hand and more particularly, when the appellants herein – original respondents claimed that the possession of the land in question was taken on 11.07.2008, there shall not be any deemed lapse under Section 24(2) of the Act, 2013.”

The decision was unanimous, with both Justices M.R. Shah and Manoj Misra agreeing on the outcome and reasoning.

Key Takeaways

• Land acquisition proceedings under the Land Acquisition Act, 1894, do not automatically 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, even if compensation has not been paid.
• The word “or” in Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, should be read as “nor” or “and.”
• The decision in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183, has been overruled, and any reliance on it is incorrect.
• This judgment clarifies the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, and provides a clear framework for future land acquisition disputes.

Directions

The Supreme Court did not give any specific directions in this case, other than setting aside the High Court’s judgment and dismissing the original writ petition.

Development of Law

The ratio decidendi of this case is that Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, should be interpreted to mean that land acquisition proceedings lapse only if both possession has not been taken and compensation has not been paid. This judgment reinforces the position of law established by the Constitution Bench in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129, and overrules the previous interpretation in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183.

Conclusion

The Supreme Court’s decision in Government of NCT of Delhi vs. Jai Pal clarifies the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The Court held that land acquisition proceedings do not lapse if possession has been taken, even if compensation has not been paid. This ruling overturns the High Court’s decision and reinforces the legal position established by the Constitution Bench in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129. The judgment provides clarity on the issue of land acquisition and will have significant implications for future disputes.