Supreme Court Upholds Land Acquisition: Govt. of NCT of Delhi vs. Om Prakash (2023) INSC 71

Introduction

Date of the Judgment: 20 January 2023

Citation: 2023 INSC 71

Judges: M.R. Shah, J. and Hima Kohli, J.

Can land acquisition proceedings be invalidated if, despite the government taking possession of the land, full compensation was not paid? The Supreme Court of India recently addressed this critical question in a case concerning land acquired decades ago. The Court’s decision clarifies the conditions under which land acquisition can be deemed to have lapsed under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. This judgment impacts numerous cases where there are disputes over land acquisition and compensation. The bench comprised Justices M.R. Shah and Hima Kohli, with the judgment authored by Justice M.R. Shah.

Case Background

The case revolves around land acquisition proceedings initiated by the Government of NCT of Delhi. The initial notification for acquisition under Section 4 of the Land Acquisition Act, 1894, was issued on 23 January 1965. The award was declared on 9 January 1981. According to the government, possession of the land was taken on 23 September 1981, and handed over to the beneficiary department. However, the payment of compensation could not be verified due to the poor condition of the Naksha Muntzamin (revenue map). In 2014, after the enactment of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, the original landowners filed a writ petition before the High Court of Delhi. They claimed that the acquisition should be deemed to have lapsed under Section 24(2) of the 2013 Act, as full compensation had not been tendered.

Timeline

Course of Proceedings

The High Court of Delhi allowed the writ petition filed by the landowners. It declared that the acquisition proceedings had lapsed under Section 24(2) of the 2013 Act. The High Court reasoned that it could not be clearly ascertained whether compensation had been tendered to the landowners, and therefore, the acquisition was deemed to have lapsed. The Government of NCT of Delhi and the Delhi Development Authority 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 addresses situations where land acquisition proceedings were initiated under the Land Acquisition Act, 1894, but remained incomplete when the 2013 Act came into force. 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 has interpreted this section to mean that for a lapse to occur, both conditions—not taking possession and not paying compensation—must be met. The word “or” in the section has been interpreted as “nor” or “and”.

Arguments

The Government of NCT of Delhi argued that:

• Possession of the land was taken on 23 September 1981, and handed over to the beneficiary department.
• The High Court did not properly consider that the landowners raised the issue of non-payment of full compensation for the first time in 2014, 24 years after the award was passed.
• The payment of compensation could not be ascertained due to the torn condition of the Naksha Muntzamin.
• As per the decision of the Constitution Bench of the Supreme Court in Indore Development Authority vs. Manoharlal and Ors., (2020) 8 SCC 129, for attracting Section 24(2) of the Act, 2013, both conditions of not taking possession and not tendering compensation have to be satisfied.

The respondent landowners argued that:

• Full compensation was not tendered in accordance with the Land Acquisition Act, 1894.
• The acquisition should be deemed to have lapsed under Section 24(2) of the 2013 Act.

The innovativeness of the argument by the government was that even if the compensation was not paid, as the possession was taken, the acquisition cannot lapse.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issue that the court addressed 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, given that possession was taken but full compensation was allegedly not paid?

Treatment of the Issue by the Court

Authorities

The Supreme Court relied on the following authority:

• Indore Development Authority vs. Manoharlal and Ors., (2020) 8 SCC 129 – Supreme Court of India. This case was relied upon for the interpretation of Section 24(2) of the 2013 Act. The Constitution Bench in this case held that the word “or” in Section 24(2) should be read as “nor” or “and,” meaning that both non-possession and non-payment of compensation must be satisfied for a lapse to occur.

The following legal provision was considered by the court:

• Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which deals with the lapse of land acquisition proceedings.

Judgment

Indore Development Authority vs. Manoharlal and Ors., (2020) 8 SCC 129*: The Supreme Court followed the interpretation of Section 24(2) of the 2013 Act as laid down in this case. The Constitution Bench had clarified that the word “or” in Section 24(2) should be read as “nor” or “and,” meaning that both non-possession and non-payment of compensation must be satisfied for a lapse to occur. As possession was taken in this case, the court held that the acquisition did not lapse.

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 in Indore Development Authority vs. Manoharlal and Ors., (2020) 8 SCC 129. The court emphasized that both non-possession and non-payment of compensation are necessary for the acquisition to lapse. The fact that possession was taken on 23 September 1981, was a crucial factor in the court’s decision. The court also noted that the landowners raised the issue of non-payment of full compensation after a long delay of 24 years, which was not a significant factor in the final decision but highlighted the factual context.

The Supreme Court rejected the High Court’s view that the acquisition had lapsed. The court stated that “the impugned judgment and order passed by the High Court in Writ Petition (C) No. 5664/2014 declaring that the acquisition with respect to the lands in question is deemed to have lapsed, is hereby quashed and set aside.” The court emphasized that the interpretation of Section 24(2) of the 2013 Act, as clarified in Indore Development Authority vs. Manoharlal and Ors., (2020) 8 SCC 129, requires both non-possession and non-payment of compensation for the acquisition to lapse. Since possession was taken, the court held that the acquisition did not lapse, regardless of whether full compensation was paid. The court also noted that the landowners raised the issue of non-payment of full compensation after a long delay of 24 years. The court further stated that, “the view taken by the High Court is unsustainable in view of the decision of the Constitution Bench of this Court in the case of Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129.” The court also observed that, “the word “or” used in Section 24(2) between possession and compensation has to be read as “nor” or as “and”.”

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 full compensation has not been paid.
• The word “or” in Section 24(2) is to be interpreted as “nor” or “and,” requiring both non-possession and non-payment of compensation for a lapse to occur.
• Landowners cannot claim a lapse in acquisition proceedings solely on the basis of non-payment of full compensation if possession has been taken.
• This decision reinforces the principle that once possession is taken, the land vests with the State, and there is no divesting under 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 judgment.

Development of Law

The ratio decidendi of this case is that for land acquisition proceedings to lapse under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, both the conditions of not taking possession and not paying compensation must be met. This judgment reaffirms the interpretation of Section 24(2) as laid down in Indore Development Authority vs. Manoharlal and Ors., (2020) 8 SCC 129, and clarifies that the word “or” in the section should be read as “nor” or “and”. There is no change in the previous position of law; rather, the previous position of law has been reiterated.

Conclusion

The Supreme Court allowed the appeal by the Government of NCT of Delhi, setting aside the High Court’s judgment. The court held that the acquisition proceedings did not lapse under Section 24(2) of the 2013 Act because possession of the land had been taken. The court reiterated that both non-possession and non-payment of compensation are necessary for a lapse to occur, as per the interpretation provided in Indore Development Authority vs. Manoharlal and Ors., (2020) 8 SCC 129. This decision clarifies the legal position on the lapse of land acquisition proceedings under the 2013 Act.

Category

• Land Acquisition
  • Section 24(2), Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013
  • Possession of Land
  • Compensation
  • Lapse of Land Acquisition
• Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013
  • Section 24(2), Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013

FAQ

Q: What does this judgment mean for landowners?

A: This judgment means that if the government has taken possession of your land, the acquisition proceedings will not lapse even if full compensation has not been paid. You cannot claim that the acquisition has lapsed solely based on non-payment of full compensation.

Q: What is Section 24(2) of the 2013 Land Acquisition Act?

A: Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, deals with situations where land acquisition proceedings were initiated under the old Land Acquisition Act, 1894, but remained incomplete when the 2013 Act came into force. It specifies the conditions under which such proceedings can be deemed to have lapsed.

Q: What are the conditions for land acquisition to lapse under Section 24(2)?

A: According to the Supreme Court, both non-possession and non-payment of compensation must be satisfied for the acquisition to lapse. If the government has taken possession, the acquisition will not lapse even if full compensation has not been paid.

Q: What if I have not received full compensation for my land?

A: Even if you have not received full compensation, the acquisition will not lapse if possession of your land has been taken. You may pursue other legal remedies to claim the remaining compensation, but the acquisition itself will remain valid.

Q: What was the main case that the Supreme Court relied on?

A: The Supreme Court relied heavily on its previous decision in Indore Development Authority vs. Manoharlal and Ors., (2020) 8 SCC 129, which clarified the interpretation of Section 24(2) of the 2013 Act.