Supreme Court Upholds Land Acquisition: NCT of Delhi vs. Subhash Chander Khatri (2023)

Date of the Judgment: 24 February 2023

Citation: Civil Appeal No. 1353 of 2023 (@ SLP (C) No. 3993 of 2023) (@ DIARY NO. 27637 OF 2022)

Judges: M.R. Shah, J., C.T. Ravikumar, J.

Can land acquisition proceedings be deemed to have lapsed if the compensation has not been paid, even if the government has taken possession of the land? The Supreme Court recently addressed this question in a case concerning land acquired for the construction of a drain in Delhi. The court clarified that if the government has taken possession of the land, the acquisition does not lapse, even if compensation is yet to be paid. This judgment has significant implications for land acquisition cases across India. The judgment was delivered by a two-judge bench comprising Justice M.R. Shah and Justice C.T. Ravikumar, with Justice M.R. Shah authoring the opinion.

Case Background

The case involves a dispute over land acquired by the government for the construction of the Bankner Link Drain. The original landowners filed a writ petition in the High Court of Delhi, arguing that the acquisition proceedings had lapsed because they had not received compensation for their land. They sought compensation under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (hereinafter referred to as “Act, 2013”). The High Court ruled in favor of the landowners, stating that the acquisition had lapsed and that they were entitled to compensation under the 2013 Act. The National Capital Territory of Delhi and the Land Acquisition Collector appealed this decision to the Supreme Court.

Timeline:

Course of Proceedings

The High Court of Delhi, relying on a previous Supreme Court decision in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., reported in (2014) 3 SCC 183, declared that the land acquisition proceedings had lapsed because compensation had not been paid to the landowners. The High Court held that the landowners were entitled to compensation under the 2013 Act. The National Capital Territory of Delhi and the Land Acquisition Collector appealed this decision, arguing that the High Court’s ruling was incorrect in light of a later Constitution Bench decision of the Supreme Court.

Legal Framework

The case 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 initiated under the Land Acquisition Act, 1894. Section 24(2) 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 previously interpreted this section in various cases, leading to the current dispute. The key issue is whether the word “or” in the phrase “possession has not been taken or the compensation has not been paid” should be read as “and”.

Arguments

The appellants, the National Capital Territory of Delhi and the Land Acquisition Collector, argued that the High Court’s decision was based on a previous ruling that had been overruled by a Constitution Bench of the Supreme Court. They contended that the land acquisition should not lapse if the government has taken possession of the land, regardless of whether compensation has been paid. They relied on the decision in Indore Development Authority Vs. Manoharlal and Ors., reported in (2020) 8 SCC 129, which clarified the interpretation of Section 24(2) of the 2013 Act.

The respondents, the original landowners, argued that since they had not received compensation, the acquisition proceedings should be deemed to have lapsed, and they should be entitled to compensation under the 2013 Act. They relied on the High Court’s judgment, which was based on the overruled decision of Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., reported in (2014) 3 SCC 183.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issue the Court addressed was:

1. Whether the High Court’s decision to declare the acquisition proceedings lapsed was correct in light of the Supreme Court’s decision in Indore Development Authority Vs. Manoharlal and Ors., reported in (2020) 8 SCC 129.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Court relied on the following authorities:

• Indore Development Authority Vs. Manoharlal and Ors., reported in (2020) 8 SCC 129, Supreme Court of India: This Constitution Bench decision overruled the previous interpretation of Section 24(2) of the 2013 Act. It clarified that the word “or” between possession and compensation should be read as “nor” or “and.” The court held that if possession has been taken, the acquisition does not lapse, even if compensation is not paid.
• Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., reported in (2014) 3 SCC 183, Supreme Court of India: This case was overruled by the Indore Development Authority case. It had previously held that acquisition proceedings lapse if compensation is not paid, even if possession has been taken.
• Sree Balaji Nagar Residential Assn. v. State of T.N., (2015) 3 SCC 353, Supreme Court of India: This case was also overruled by the Indore Development Authority case, as it followed the interpretation in Pune Municipal Corporation.
• Indore Development Authority v. Shailendra, (2018) 3 SCC 412, Supreme Court of India: This case was also clarified by the Indore Development Authority case regarding the interpretation of the proviso to Section 24(2).

Judgment

The Supreme Court, referring to the decision in Indore Development Authority Vs. Manoharlal and Ors., reported in (2020) 8 SCC 129, stated that the High Court’s judgment was unsustainable. The Court emphasized that the physical possession of the land had been taken and used for the construction of the Bankner Link Drain. Therefore, there was no lapse of the acquisition. 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, more particularly, the fact that physical possession of the subject land has been taken over and in fact the subject land has been put to use by the beneficiary department – Irrigation and Flood Control Board for construction of Bankner Link Drain which has been duly built, there shall not be any lapse of the acquisition with regard to the subject land as observed and held by the High Court.”

The Court quashed the High Court’s judgment and dismissed the original writ petition filed by the landowners.

The Court further clarified the position of law regarding the authorities:

• Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., reported in (2014) 3 SCC 183: The Court explicitly stated that this decision was overruled by the Constitution Bench in Indore Development Authority Vs. Manoharlal and Ors., reported in (2020) 8 SCC 129.
• Indore Development Authority Vs. Manoharlal and Ors., reported in (2020) 8 SCC 129: The Court followed this decision, which clarified that the word “or” in Section 24(2) of the 2013 Act should be read as “nor” or “and.” This means that acquisition proceedings lapse only if both possession has not been taken and compensation has not been paid.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the Constitution Bench’s ruling in Indore Development Authority Vs. Manoharlal and Ors., reported in (2020) 8 SCC 129. The Court emphasized the following points:

• The physical possession of the land had been taken by the government.
• The land was being used for the construction of the Bankner Link Drain.
• The interpretation of Section 24(2) of the 2013 Act, as clarified in Indore Development Authority, requires that both possession not be taken and compensation not be paid for the acquisition to lapse.

The Court’s reasoning was primarily based on the legal interpretation of Section 24(2) as clarified by the Constitution Bench. The factual aspect of possession being taken was also a significant factor, but the legal aspect held more weight in the Court’s decision.

Logical Reasoning

Key Takeaways

• Land acquisition proceedings do not lapse if the government has taken physical possession of the land, even if compensation has not been paid.
• The word “or” in Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, should be read as “and” or “nor.”
• The decision in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., reported in (2014) 3 SCC 183, has been overruled by the Constitution Bench in Indore Development Authority Vs. Manoharlal and Ors., reported in (2020) 8 SCC 129.
• This judgment clarifies the legal position on land acquisition and ensures that public projects are not stalled due to delays in compensation payments, provided possession has been taken.

Directions

The Supreme Court quashed the High Court’s judgment and dismissed the original writ petition. No specific directions were given beyond this.

Development of Law

The ratio decidendi of this case is that the acquisition of land does not lapse if the government has taken physical possession of the land, regardless of whether compensation has been paid. This is a reaffirmation of the position of law clarified in Indore Development Authority Vs. Manoharlal and Ors., reported in (2020) 8 SCC 129, and is a departure from the overruled position in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., reported in (2014) 3 SCC 183.

Conclusion

In conclusion, the Supreme Court’s decision in National Capital Territory of Delhi & Anr. vs. Subhash Chander Khatri & Ors. upholds the principle that once the government takes possession of land for a public purpose, the acquisition does not lapse even if compensation is pending. This judgment reinforces the interpretation of Section 24(2) of the 2013 Act as clarified by the Constitution Bench and ensures that public projects are not hampered by delays in compensation payments, provided the government has taken possession of the land.