Supreme Court Upholds Land Acquisition: Land Acquisition Collector vs. Hari Chand (2023)

Introduction

Date of the Judgment: April 19, 2023

Citation: 2023 INSC 364

Judges: M.R. Shah, J. and Ahsanuddin Amanullah, J.

Can land acquisition be deemed to have lapsed if the acquiring authority has taken possession of the land but has not paid compensation? The Supreme Court of India recently addressed this critical question in a case concerning the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (hereinafter referred to as “Act, 2013”). The court clarified the conditions under which land acquisition proceedings can be considered to have lapsed, particularly concerning the interplay between taking possession and paying compensation. This judgment has significant implications for landowners and acquiring authorities alike. The judgment was delivered by a two-judge bench comprising Justice M.R. Shah and Justice Ahsanuddin Amanullah.

Case Background

The case revolves around land acquired by the Land Acquisition Collector (South), New Delhi. The High Court of Delhi had previously ruled in favor of the landowners, stating that the acquisition of their land was deemed to have lapsed under Section 24(2) of the Act, 2013, because compensation had not been paid. The Land Acquisition Collector appealed this decision to the Supreme Court. The High Court’s decision was based on the premise that both possession and compensation were required to avoid the lapse of acquisition.

The Land Acquisition Collector contended that the physical possession of the land had been taken over and handed to the beneficiary department on July 14, 1987. However, the High Court, relying on a previous Supreme Court decision in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183, held that the acquisition had lapsed because compensation had not been paid.

Timeline

Legal Framework

The core legal issue revolves around the interpretation of 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 under certain conditions.

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’s interpretation of the word “or” in Section 24(2) is crucial. The High Court had interpreted “or” to mean that both possession and compensation were required to avoid the lapse of acquisition. However, the Supreme Court, in this case, has relied on the Constitution Bench decision in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129, which clarified that “or” should be read as “nor” or “and.”

Arguments

The primary contention of the Land Acquisition Collector was that the physical possession of the land had been taken on July 14, 1987. Therefore, as per the interpretation of Section 24(2) of the Act, 2013 by the Supreme Court in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129, the acquisition could not be deemed to have lapsed.

The High Court had ruled that the acquisition lapsed because compensation had not been paid, relying on the interpretation of Section 24(2) in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183. This interpretation suggested that both possession and compensation were necessary to prevent the lapse of acquisition proceedings.

The Supreme Court, in this case, did not discuss the arguments of the respondents.

Issues Framed by the Supreme Court

The Supreme Court did not frame specific issues in this judgment. The court directly applied the law laid down in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129, to the facts of the case.

Treatment of the Issue by the Court

Authorities

The Supreme Court relied on the following authorities:

Judgment

The Supreme Court held that the High Court’s decision was unsustainable. The Court emphasized that the decision in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183, which the High Court had relied upon, had been specifically overruled by the Constitution Bench in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129.

The Supreme Court reiterated the interpretation of Section 24(2) of the Act, 2013, as laid down in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129, that the word “or” should be read as “nor” or “and.” Therefore, if possession has been taken, the acquisition does not lapse, even if compensation has not been paid.

The Court stated, “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 the fact that the possession of the land in question was taken over on 14.07.1987, there shall not be any deemed lapse of acquisition as observed and held by the High Court.”

The Court further stated, “In view of the above and for the reasons stated above, present appeal succeeds. The impugned judgment and order passed by the High Court is hereby quashed and set aside. There shall not be any deemed lapse of acquisition with respect to the land in question.”

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 Act, 2013, as clarified in the Constitution Bench decision in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129. The Court emphasized that the word “or” in Section 24(2) should be read as “nor” or “and,” meaning that if either possession has been taken or compensation has been paid, the acquisition proceedings do not lapse.

The Court also focused on the fact that the possession of the land was taken on July 14, 1987, which, under the correct interpretation of Section 24(2), meant that the acquisition could not be deemed to have lapsed.

Key Takeaways

• The Supreme Court clarified that the word “or” in Section 24(2) of the Act, 2013, should be read as “nor” or “and.” This means that if either possession of the land has been taken or compensation has been paid, the acquisition proceedings do not lapse.
• The decision in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183, which had been relied upon by the High Court, was specifically overruled by the Constitution Bench in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129.
• If possession of the land has been taken by the acquiring authority, the acquisition proceedings will not lapse, even if compensation has not been paid.

Directions

No specific directions were given by the Supreme Court in this case.

Specific Amendments Analysis

There is no specific amendment analysis in this judgment.

Development of Law

The ratio decidendi of this case is that the word “or” in Section 24(2) of the Act, 2013, should be read as “nor” or “and,” as clarified in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129. This means that if possession of the land has been taken, the acquisition proceedings do not lapse, even if compensation has not been paid. This judgment reaffirms the position of law as laid down in the Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129 case and overrules the earlier position of law as laid down in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183.

Conclusion

In conclusion, the Supreme Court allowed the appeal of the Land Acquisition Collector, setting aside the High Court’s judgment. The Supreme Court held that the acquisition of the land in question did not lapse because possession had been taken on July 14, 1987. This decision reinforces the interpretation of Section 24(2) of the Act, 2013, as clarified in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129, and provides clarity on the conditions under which land acquisition proceedings can be deemed to have lapsed.