Supreme Court Upholds Land Acquisition: Government of NCT of Delhi vs. Ratiram & Ors. (20 January 2023)

LEGAL ISSUE: Whether land acquisition proceedings lapse if compensation is not paid, even if possession is taken.
CASE TYPE: Land Acquisition
Case Name: Government of NCT of Delhi vs. Ratiram & Ors.
[Judgment Date]: 20 January 2023

Date of the Judgment: 20 January 2023
Citation: Civil Appeal No. 379 of 2023 (@SLP (C) NO. 1349 OF 2023) (@ DIARY NO. 24886 of 2022)
Judges: M.R. Shah, J. and C.T. Ravikumar, J.

Can land acquisition be invalidated if compensation isn’t paid, even after the government has taken possession? The Supreme Court of India recently addressed this critical question in a case concerning land acquisition in Delhi. This case clarifies the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, particularly regarding the conditions under which land acquisition proceedings can be deemed to have lapsed. The judgment was delivered by a two-judge bench comprising Justice M.R. Shah and Justice C.T. Ravikumar, with Justice M.R. Shah authoring the opinion.

Case Background

The case revolves around land in Ghonda Gujran Khadar, Delhi, which was initially notified for acquisition under Section 4 of the Land Acquisition Act on 23 September 1989. Following this, a declaration under Section 6 of the same Act was made on 20 June 1990, for planned development in Delhi. The Land Acquisition Collector passed Award No. 8/92-93 on 19 June 1992, after considering claims from interested parties, including the predecessors of the current respondents. The government claimed that possession of the land was taken on 21 March 2007. However, compensation was not paid to the recorded owners.

Timeline

Course of Proceedings

The High Court of Delhi, in its judgment dated 13 February 2017, had ruled in favor of the respondents, declaring that the land acquisition had lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. This decision was primarily based on the fact that compensation had not been paid, 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 against this decision.

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 deals with the lapse of land acquisition proceedings if certain conditions are not met.

Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement 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”

Arguments

The appellant, Government of NCT of Delhi, argued that the High Court erred in declaring the acquisition lapsed. They contended that possession of the land was taken on 21 March 2007, and that the non-payment of compensation did not automatically lead to the lapse of acquisition proceedings, especially in light of the Supreme Court’s later decision in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129. The government highlighted that the High Court relied on a judgment that had been specifically overruled.

The respondents, on the other hand, argued that since compensation was not paid, the land acquisition should be deemed to have lapsed under Section 24(2) of the Act of 2013, as interpreted by the High Court. They relied on the precedent set by the Pune Municipal Corporation case, which at the time of the High Court’s decision, was considered the binding authority.

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was:

1. Whether the High Court was correct in declaring that the acquisition with respect to the land in question is deemed to have lapsed under Section 24(2) of the Act, 2013.

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

The Supreme Court overturned the High Court’s decision, ruling that the land acquisition had not lapsed. The Court held that the High Court had erred in relying on the Pune Municipal Corporation case, which was specifically overruled by the Constitution Bench in the Indore Development Authority case. The Supreme Court clarified that under Section 24(2) of the 2013 Act, if possession of the land has been taken, the non-payment of compensation does not lead to a lapse of the acquisition proceedings.

The Supreme Court’s judgment also addressed the interpretation of Section 24(2) of the 2013 Act, stating that the word “or” between possession and compensation should be read as “nor” or “and”. This means that for a land acquisition to lapse, both possession must not have been taken and compensation must not have been paid. The Court emphasized that once possession has been taken, the land vests in the State, and there is no divesting under Section 24(2) of the 2013 Act.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the legal principle that once possession of land is taken by the government, the acquisition process cannot be reversed solely due to non-payment of compensation. The Court emphasized the binding nature of its Constitution Bench decision in Indore Development Authority, which clarified the interpretation of Section 24(2) of the 2013 Act. The Court was also influenced by the fact that the High Court’s decision was based on a precedent that had been explicitly overruled, making the High Court’s judgment unsustainable.

The Court quoted from the Indore Development Authority judgment:
“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 further stated,
“The expression “paid” in the main part of Section 24(2) of the 2013 Act does not include a deposit of compensation in court.”

The Court also clarified that,
“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

• ✓ Land acquisition proceedings do not automatically lapse under Section 24(2) of the 2013 Act if possession has been taken, even if compensation has not been paid.
• ✓ The word “or” in Section 24(2) between possession and compensation should be read as “nor” or “and”.
• ✓ The decision in Pune Municipal Corporation has been overruled by the Constitution Bench in Indore Development Authority.
• ✓ Once possession of land has been taken by the government, the land vests in the State, and there is no divesting under Section 24(2) of the 2013 Act.

Directions

No specific directions were given by the Supreme Court 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 once the government takes possession of land, the acquisition proceedings do not lapse solely due to the non-payment of compensation. This judgment reinforces the position established in Indore Development Authority, clarifying the interpretation of Section 24(2) of the 2013 Act and overruling the earlier interpretation in Pune Municipal Corporation. This represents a significant change in the legal understanding of land acquisition procedures and the conditions under which such proceedings can be deemed to have lapsed.

Conclusion

The Supreme Court’s decision in Government of NCT of Delhi vs. Ratiram & Ors. clarifies that land acquisition proceedings do not lapse solely due to non-payment of compensation if possession of the land has been taken by the government. The Court emphasized the importance of the precedent set by the Constitution Bench in Indore Development Authority, which overruled the earlier interpretation in Pune Municipal Corporation. This judgment provides a clear understanding of Section 24(2) of the 2013 Act, ensuring that land acquisitions are not easily invalidated once possession has been transferred to the government.