Supreme Court Upholds Land Acquisition: Land Dept. vs. Attro Devi (2023)

Date of the Judgment: 11 April 2023

Citation: Civil Appeal No.2749/2023 (arising out of S.L.P.(Civil) No.7510/2023 arising out of S.L.P.(Civil) D.No.23608/2021)

Judges: Abhay S. Oka, J., Rajesh Bindal, J.

Can a land acquisition be deemed to have lapsed if the compensation is not paid to the landowner, even if the government has taken possession of the land? The Supreme Court of India recently addressed this question in a case concerning land acquired for planned development in Delhi. The core issue was whether the acquisition of land should be considered void under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (the 2013 Act) if the compensation was not paid to the landowners. The two-judge bench of Justices Abhay S. Oka and Rajesh Bindal delivered the judgment, with Justice Rajesh Bindal authoring the opinion.

Case Background

The case revolves around land in Ghonda, Chauhan Khadar, New Delhi, which the government sought to acquire for planned development. The initial notification for acquisition was issued on 23 June 1989, under Section 4 of the Land Acquisition Act, 1894. This was followed by a declaration under Section 6 on 20 June 1990. The award for compensation was announced on 19 June 1992.

The respondents, the original landowners, filed a writ petition in the High Court, arguing that the acquisition had lapsed under Section 24(2) of the 2013 Act. They claimed that neither had possession been taken nor had they received compensation. The appellants (Land and Building Department) contended that possession was taken on 6 December 2012 and handed over to the Delhi Development Authority (DDA). They further stated that compensation could not be paid because the landowners did not come forward to claim it.

Timeline:

Course of Proceedings

The High Court of Delhi allowed the writ petition filed by the landowners, relying on the Supreme Court’s judgment in Pune Municipal Corporation & Anr. v. Misirimal Solanki & Ors. (2014) 3 SCC 183. The High Court held that since compensation had not been paid to the landowners, the acquisition had lapsed under Section 24(2) of the 2013 Act. The Land and Building Department then appealed to the Supreme Court.

Legal Framework

The case primarily involves Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which 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”

This section provides that if an award was made five years or more before the 2013 Act came into force, and either possession was not taken or compensation was not paid, the acquisition proceedings would lapse.

Arguments

Arguments by the Appellants (Land and Building Department):

• The appellants argued that the High Court’s order should be set aside because the Supreme Court’s Constitution Bench judgment in Indore Development Authority v. Manoharlal and Others (2020) 8 SCC 129 had overruled the earlier judgment in Pune Municipal Corporation & Anr. v. Misirimal Solanki & Ors. (2014) 3 SCC 183.
• The Constitution Bench in Indore Development Authority v. Manoharlal and Others (2020) 8 SCC 129 clarified that compliance with either taking possession or paying compensation is enough to sustain the acquisition.
• They stated that in this case, possession of the land had been taken, which is sufficient to prevent the acquisition from lapsing.
• The land is required for a project of national importance, the Delhi-Saharanpur-Dehradun Highway, and any delay would impact the project.

Arguments by the Respondents (Landowners):

• The respondents argued that the High Court’s decision was based on the law as it existed at the time of the decision, and it should not be overturned based on a subsequent judgment.
• They contended that since compensation had not been paid, the acquisition should lapse according to the interpretation of Section 24(2) of the 2013 Act in Pune Municipal Corporation’s case.
• The respondents acknowledged that the High Court had noted that possession of the land had been taken by the authorities.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues, but the core issue was:

1. Whether the acquisition of land lapses under Section 24(2) of the 2013 Act if compensation is not paid, even if possession is taken.

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 authority was viewed by the Court?

• The Supreme Court explicitly overruled Pune Municipal Corporation & Anr. v. Misirimal Solanki & Ors. (2014) 3 SCC 183, stating that the interpretation of Section 24(2) of the 2013 Act in that judgment was incorrect.
• The Supreme Court followed the Constitution Bench judgment in Indore Development Authority v. Manoharlal and Others (2020) 8 SCC 129, which clarified that either taking possession or paying compensation is sufficient to prevent the lapse of land acquisition proceedings.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily driven by the clarification provided by the Constitution Bench in Indore Development Authority v. Manoharlal and Others (2020) 8 SCC 129. The court emphasized that the earlier interpretation of Section 24(2) of the 2013 Act in Pune Municipal Corporation was incorrect. The court also noted the undisputed fact that possession of the land had been taken by the authorities, which, according to the clarified legal position, was sufficient to prevent the acquisition from lapsing. The court also considered the national importance of the project for which the land was acquired.

Logical Reasoning:

The Court’s reasoning was based on the following points:

• The Constitution Bench in Indore Development Authority had clarified that the word “or” in Section 24(2) of the 2013 Act should be read as “nor” or “and,” meaning that either taking possession or paying compensation is sufficient to prevent the lapse of land acquisition proceedings.
• The Court noted that possession of the land had been taken by the Land Acquisition Collector and handed over to the Delhi Development Authority (DDA) on 06.12.2012.
• The Court also considered the fact that the land was required for a project of national importance, the Delhi-Saharanpur-Dehradun Highway.

The Court rejected the argument that the High Court’s decision should be upheld because it was based on the law at the time. The Supreme Court clarified that a subsequent judgment by a Constitution Bench of the Supreme Court would have a binding effect.

The Court quoted the following from the judgment:

“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.”

“When the State has acquired the land and award has been passed, land vests in the State Government free from all encumbrances. The act of vesting of the land in the State is with possession, any person retaining the possession, thereafter, has to be treated as trespasser and has no right to possess the land which vests in the State free from all encumbrances.”

“Thus, it is apparent that vesting is with possession and the statute has provided under Sections 16 and 17 of the Act of 1894 that once possession is taken, absolute vesting occurred. It is an indefeasible right and vesting is with possession thereafter.”

There was no minority opinion in this case. The two-judge bench unanimously agreed to set aside the order of the High Court.

Key Takeaways

• The Supreme Court has clarified that under Section 24(2) of the 2013 Act, the acquisition of land does not lapse if possession has been taken, even if compensation has not been paid.
• This decision overrules the previous interpretation in Pune Municipal Corporation & Anr. v. Misirimal Solanki & Ors. (2014) 3 SCC 183.
• Landowners are still entitled to receive compensation for their acquired land.
• The judgment emphasizes that once possession is taken by the State, the land vests in the State free from all encumbrances, and any subsequent possession by the original landowner is considered trespass.
• This decision reinforces the importance of the Constitution Bench judgment in Indore Development Authority v. Manoharlal and Others (2020) 8 SCC 129 in interpreting Section 24(2) of the 2013 Act.

Directions

The Supreme Court directed that the respondents shall be entitled to receive compensation as per their entitlement, and the Land Acquisition Officer should take steps to pay the same to the rightful owner.

Development of Law

The ratio decidendi of this case is that under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, the acquisition of land does not lapse if possession has been taken, even if compensation has not been paid. This decision changes the previous position of law as laid down in Pune Municipal Corporation & Anr. v. Misirimal Solanki & Ors. (2014) 3 SCC 183, which held that both taking possession and paying compensation were necessary to prevent the lapse of land acquisition proceedings.

Conclusion

In conclusion, the Supreme Court’s decision in Land and Building Department vs. Attro Devi clarifies the interpretation of Section 24(2) of the 2013 Act. The court held that taking possession of the land is sufficient to prevent the lapse of acquisition proceedings, even if compensation has not been paid. This decision is based on the Constitution Bench judgment in Indore Development Authority v. Manoharlal and Others and sets aside the High Court’s order. The landowners are still entitled to receive compensation as per their entitlement.