Supreme Court Upholds Land Acquisition: Land Dept. vs. Attro Devi (2023) INSC 357

Introduction

Date of the Judgment: 11 April 2023

Citation: 2023 INSC 357

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

Can a land acquisition be deemed invalid if the compensation isn’t paid, even if the government has taken possession of the land? The Supreme Court of India recently addressed this critical question in a case concerning land acquired for planned development in Delhi. The core 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 (the 2013 Act), specifically whether both taking possession and payment of compensation are mandatory to avoid the lapse of acquisition.

The Supreme Court bench, comprising Justices Abhay S. Oka and Rajesh Bindal, delivered the judgment, with Justice Rajesh Bindal authoring the opinion.

Case Background

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

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

Timeline:

Legal Framework

The case primarily revolves around the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (the 2013 Act). This section deals with the lapse of land acquisition proceedings initiated under the Land Acquisition Act, 1894. Section 24(2) of the 2013 Act 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 core issue is whether the word “or” in the phrase “possession of the land has not been taken or the compensation has not been paid” should be interpreted as “and,” requiring both conditions to be met for the acquisition to lapse, or if either condition is sufficient.

Arguments

The appellants argued that the High Court’s order should be set aside based on the Constitution Bench judgment in Indore Development Authority v. Manoharlal and Others (2020) 8 SCC 129. This judgment overruled the earlier interpretation of Section 24(2) of the 2013 Act in Pune Municipal Corporation & Anr. v. Misirimal Solanki & Ors. (2014) 3 SCC 183. The Constitution Bench clarified that compliance with either taking possession or paying compensation is sufficient to sustain the acquisition. The appellants emphasized that in this case, possession of the land had been taken. They also highlighted that the land is required for a project of national importance, the Delhi-Saharanpur-Dehradun Highway.

The respondents contended that the High Court’s decision was based on the law as it existed on the date of the decision, which was before the Indore Development Authority ruling. They argued that the High Court correctly applied the interpretation of Section 24(2) of the 2013 Act as laid down in Pune Municipal Corporation, which required both possession and compensation to be fulfilled to avoid lapse. They maintained that since compensation was not paid, the acquisition had lapsed.

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was:

1. Whether the High Court’s order could be sustained in light of the Constitution Bench judgment in Indore Development Authority v. Manoharlal and Others (2020) 8 SCC 129, which overruled the interpretation of Section 24(2) of the 2013 Act in Pune Municipal Corporation & Anr. v. Misirimal Solanki & Ors. (2014) 3 SCC 183.

Treatment of the Issue by the Court:

Authorities

The Supreme Court considered the following authorities:

Judgment

How each authority was viewed by the Court?

✓ Pune Municipal Corporation & Anr. v. Misirimal Solanki & Ors. (2014) 3 SCC 183: *Overruled*. The Supreme Court explicitly stated that this judgment, which the High Court relied upon, was overruled by the Constitution Bench in Indore Development Authority.

✓ Indore Development Authority v. Manoharlal and Others (2020) 8 SCC 129: *Followed*. The Supreme Court relied heavily on this Constitution Bench judgment, which clarified the interpretation of Section 24(2) of the 2013 Act.

✓ Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013: *Interpreted*. The Supreme Court interpreted this provision in light of the Indore Development Authority judgment, stating that the word “or” should be read as “nor” or “and” in the context of possession and compensation.

✓ Sections 16 and 17 of the Land Acquisition Act, 1894: *Explained*. The Supreme Court explained that these sections provide for vesting of land in the State with possession after acquisition, and that any subsequent possession by the landowner is considered trespass.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily driven by the need to adhere to the binding precedent set by the Constitution Bench in Indore Development Authority. The Court emphasized that the interpretation of Section 24(2) of the 2013 Act had been definitively settled, and that the High Court’s reliance on the overruled Pune Municipal Corporation judgment was incorrect. The Court also considered the factual aspect that possession of the land had been taken, which, as per the Indore Development Authority ruling, was sufficient to prevent the lapse of acquisition. The importance of the land for a national highway project also weighed in the decision, highlighting the public interest aspect.

The Supreme Court rejected the alternative interpretation that both possession and compensation were mandatory for the acquisition to be valid, as this interpretation had been overruled. The final decision was reached by applying the binding precedent and factual findings to the case.

The Supreme Court’s decision was based on the following reasons:

• The Constitution Bench in Indore Development Authority had clarified that either taking possession or paying compensation is sufficient to save the acquisition from lapsing.
• The High Court had incorrectly relied on the overruled Pune Municipal Corporation judgment.
• The factual record showed that possession of the land had been taken by the authorities.
• The land was required for a project of national importance.

“The Constitution Bench of this Court in Indore Development Authority’s case (supra) had opined that satisfaction of either of the conditions namely either taking possession of the acquired land or payment of compensation to the landowners would be sufficient to save the acquisition from being lapsed in terms of Section 24(2) of the 2013 Act.”

“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.”

“It is the undisputed fact on the record, as has been noticed in the impugned order passed by the High Court, the possession of the land was taken over by the Land Acquisition Collector and handed over to Delhi Development Authority.”

Key Takeaways

• The Supreme Court has reaffirmed that under Section 24(2) of the 2013 Act, either taking possession of the land or paying compensation is sufficient to prevent the lapse of land acquisition proceedings.
• The judgment in Indore Development Authority v. Manoharlal and Others (2020) 8 SCC 129 is the binding precedent on this issue, overruling the earlier interpretation in Pune Municipal Corporation & Anr. v. Misirimal Solanki & Ors. (2014) 3 SCC 183.
• Landowners cannot claim lapse of acquisition if possession has been taken, even if compensation has not been paid. However, they are entitled to receive compensation.
• The judgment emphasizes that once possession is taken by the State, the land vests with the State free from all encumbrances, and any subsequent possession by the landowner is considered trespass.
• The decision highlights the importance of adhering to binding precedents set by larger benches of the Supreme Court.

Directions

The Supreme Court directed that the respondents (landowners) are entitled to receive compensation as per their entitlement. The Land Acquisition Officer was directed to take steps to pay the compensation to the rightful owners.

Development of Law

The ratio decidendi of this case is that the interpretation of Section 24(2) of the 2013 Act, as clarified by the Constitution Bench in Indore Development Authority v. Manoharlal and Others (2020) 8 SCC 129, is the binding law. This judgment overruled the earlier position of law as laid down in Pune Municipal Corporation & Anr. v. Misirimal Solanki & Ors. (2014) 3 SCC 183. The Supreme Court has now definitively settled that either taking possession or paying compensation is sufficient to prevent the lapse of land acquisition proceedings. This case reinforces the principle that decisions of Constitution Benches are binding and must be followed by all courts.

Conclusion

In summary, the Supreme Court allowed the appeal, setting aside the High Court’s order. The Court held that the land acquisition did not lapse because possession had been taken, even though compensation had not been paid. This decision is based on the binding precedent set by the Constitution Bench in Indore Development Authority, which clarified the interpretation of Section 24(2) of the 2013 Act. The landowners are entitled to receive compensation, but the acquisition remains valid.