Supreme Court Upholds Land Acquisition: Lucknow Development Authority vs. Mehdi Hasan (12 December 2022)

Date of the Judgment: 12 December 2022
Citation: [Not Available in Source]
Judges: M. R. Shah, J. and M.M. Sundresh, J.
Can land acquisition proceedings be deemed to have lapsed if the government takes possession of the land but has not paid compensation? The Supreme Court of India addressed this critical question in a recent case involving the Lucknow Development Authority. The court clarified the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, concerning the lapse of land acquisition proceedings. This judgment, delivered by a bench comprising Justices M. R. Shah and M.M. Sundresh, has significant implications for land acquisition disputes across India.

Case Background

The case revolves around a land acquisition dispute in Lucknow. The Lucknow Development Authority (the appellant) acquired land, including Plot No. 219, belonging to Mehdi Hasan (the respondent). The High Court of Judicature at Allahabad, Lucknow Bench, had ruled that the acquisition of Plot No. 219 had lapsed because compensation was not paid to the landowners when the 2013 Act came into force. The Lucknow Development Authority appealed this decision to the Supreme Court.

The key point of contention was whether the acquisition had lapsed under Section 24(2) of the 2013 Act. The Authority claimed that possession of the land was taken on 13 February 2003, and the compensation was deposited in the court of the District Judge under Section 30(2) of the Land Acquisition Act, 1894. However, the High Court focused on the fact that compensation was not directly tendered or paid to the original landowners when the 2013 Act was enacted.

Timeline

Course of Proceedings

The original writ petitioners had challenged the acquisition of their lands in the High Court. However, during the proceedings, they restricted their challenge to Plot No. 219 only. The High Court, without discussing the possession taken by the Land Acquisition Officer, ruled that the acquisition had lapsed under Section 24(2) of the 2013 Act. The High Court’s decision was based on the fact that compensation had not been paid to the original landowners when the 2013 Act came into force. This was despite the fact that the Lucknow Development Authority stated that possession had been taken in 2003 and compensation was deposited in the court. The Lucknow Development Authority then appealed to the Supreme Court.

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 under certain conditions. The Supreme Court referred to its earlier judgment in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129, which clarified the interpretation of Section 24(2). According to this judgment, the word “or” in Section 24(2) between possession and compensation should be read as “nor” or “and.” This means that for the acquisition to lapse, both conditions must be met: (1) possession has not been taken, and (2) compensation has not been paid. If either of these conditions is not satisfied, the acquisition does not lapse.

The relevant portion of Section 24(2) of the Act, 2013 as interpreted by the Supreme Court in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129 is as follows:
“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.”

Arguments

Appellant (Lucknow Development Authority):

• The Lucknow Development Authority argued that possession of the land was taken on 13 February 2003, well before the 2013 Act came into force.
• They contended that compensation had been deposited in the court of the District Judge under Section 30(2) of the Land Acquisition Act, 1894.
• They relied on the Supreme Court’s judgment in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129, which clarified that the acquisition does not lapse if possession has been taken, even if compensation has not been directly paid to the landowners.

Respondent (Landowners):

• The landowners argued that they had not received compensation when the 2013 Act came into force.
• They contended that the acquisition should be deemed to have lapsed under Section 24(2) of the 2013 Act because the compensation was not tendered or paid to them directly.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in the judgment. However, the core issue before the court was:

1. Whether the High Court was correct in holding that the acquisition had lapsed under Section 24(2) of the 2013 Act, given that possession was taken by the Authority prior to the enactment of the 2013 Act?

Treatment of the Issue by the Court

Authorities

Legal Provisions Considered:

• 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 possession is not taken or compensation is not paid.
• Section 30(2) of the Land Acquisition Act, 1894: This section deals with the deposit of compensation in the court when there is a dispute as to who is entitled to receive it.

Judgment

How each authority was viewed by the Court?

• The Supreme Court followed the precedent set in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129. The court reiterated that the word “or” in Section 24(2) of the 2013 Act should be read as “nor” or “and,” meaning both non-possession and non-payment of compensation are required for the acquisition to lapse.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the factual finding that possession of the land was taken by the Lucknow Development Authority on 13 February 2003. This fact, combined with the interpretation of Section 24(2) of the 2013 Act as laid down in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129, led the court to conclude that the acquisition proceedings had not lapsed. The court emphasized that the word “or” in Section 24(2) should be read as “and,” meaning that both non-possession and non-payment of compensation are required for the acquisition to lapse. The deposit of compensation in the court, though not direct payment to the landowners, was considered sufficient in this case, especially since possession had already been taken. The court also noted that the High Court had not considered the fact that possession was already taken by the Authority.

The Supreme Court emphasized that “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.”

The court also noted that “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 concluded, “That once the possession was taken much prior to Act 2013 came into force. As per the law laid down by this Court in the case of Indore Development Authority (supra), it cannot be said that the land proceedings are deemed to have lapsed.”

Key Takeaways

• Interpretation of Section 24(2): The word “or” in Section 24(2) of the 2013 Act is to be read as “nor” or “and.” This means that both non-possession and non-payment of compensation are required for the acquisition to lapse.
• Possession is Key: If possession of the land has been taken by the authorities, the acquisition proceedings will not lapse under Section 24(2), even if compensation has not been directly paid to the landowners.
• Deposit of Compensation: The deposit of compensation in the court under Section 30(2) of the Land Acquisition Act, 1894, is considered sufficient compliance, especially when possession has already been taken.
• Impact on Landowners: Landowners cannot claim a lapse of acquisition proceedings under Section 24(2) if possession has been taken by the authorities, even if they have not received direct compensation.

Directions

The Supreme Court set aside the judgment of the High Court and dismissed the original writ petition filed before the High Court.

Development of Law

The Supreme Court’s decision reinforces 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 ratio decidendi of this case is that for land acquisition proceedings to lapse under Section 24(2), both conditions—non-taking of possession and non-payment of compensation—must be met. This judgment clarifies that once possession is taken by the authorities, the acquisition does not lapse even if compensation has not been directly paid to the landowners, provided that the compensation has been deposited in the court. There is no change in the previous position of law.

Conclusion

The Supreme Court’s decision in Lucknow Development Authority vs. Mehdi Hasan clarifies the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The court held that if possession of the land has been taken by the authorities, the acquisition proceedings do not lapse, even if compensation has not been directly paid to the landowners. This judgment reaffirms the importance of the possession of land in determining whether the land acquisition proceedings lapse under the 2013 Act. The Supreme Court allowed the appeal of the Lucknow Development Authority and set aside the High Court’s judgment.