LEGAL ISSUE: Whether land acquisition proceedings lapse if compensation is not paid, despite the government taking possession of the land.
CASE TYPE: Land Acquisition
Case Name: National Capital Territory of Delhi & Anr. vs. Subhash Chander Khatri & Ors.
[Judgment Date]: 24 February 2023
Date of the Judgment: 24 February 2023
Citation: 2023 INSC 1702
Judges: M.R. Shah, J. and C.T. Ravikumar, J.
Can land acquisition be invalidated if compensation isn’t paid, even after the government has taken possession and used the land? The Supreme Court of India addressed this critical question in a recent case, clarifying the conditions under which land acquisition proceedings can be deemed to have lapsed. The core issue revolved around whether the failure to pay compensation, despite taking possession of the land, would invalidate the acquisition process under the Land Acquisition Act, 1894 and the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The two-judge bench of Justices M.R. Shah and C.T. Ravikumar delivered the judgment, 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 writ petitioners, the respondents in this appeal, sought compensation under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, arguing that the acquisition proceedings had lapsed. The Land Acquisition Collector (LAC) and the Irrigation and Flood Control Department, the beneficiaries of the land acquisition, stated that they had taken possession of the land and used it for the intended purpose. The respondents did not dispute that the government had taken physical possession and used the land. Their claim was solely for compensation under the 2013 Act.
Timeline:
| Date | Event |
|---|---|
| Prior to the Writ Petition | Land acquired by the government for the construction of the Bankner Link Drain. |
| Prior to the Writ Petition | Possession of the land was taken by the government and the land was used for construction of Bankner Link Drain. |
| 2015 | Writ Petition (C) No. 12118 of 2015 filed in the High Court of Delhi by the original writ petitioners. |
| 24 February 2023 | Supreme Court delivered the judgment in Civil Appeal No. 1353 of 2023. |
Course of Proceedings
The High Court of Delhi, relying on the Supreme Court’s decision in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors. [(2014) 3 SCC 183], ruled in favor of the original writ petitioners. The High Court declared that the acquisition proceedings had lapsed due to non-payment of compensation, and ordered that the petitioners were entitled to compensation under the 2013 Act. However, this decision was appealed by the Secretary, Land and Building Department, NCT of Delhi and Land Acquisition Collector to the Supreme Court.
Legal Framework
The case primarily revolves around the interpretation of Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. Specifically, Section 24(2) deals with the lapse of land acquisition proceedings under certain conditions. The Supreme Court also considered the Land Acquisition Act, 1894, particularly Section 16 (possession of land) and Section 31 (payment of compensation).
Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 states:
“(2) 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: Provided that where an award has been made and compensation in respect of a majority of land holdings has not been deposited in the account of the beneficiaries, then, all beneficiaries specified in the notification for acquisition under section 4 of the said Land Acquisition Act, shall be entitled to compensation in accordance with the provisions of this Act.”
Arguments
The appellants, the National Capital Territory of Delhi and the Land Acquisition Collector, argued that the High Court’s decision was incorrect. They contended that the physical possession of the land had been taken and the land had been used for the construction of the Bankner Link Drain. The appellants relied on the Constitution Bench decision in Indore Development Authority Vs. Manoharlal and Ors. [(2020) 8 SCC 129], which overruled the previous judgment in Pune Municipal Corporation.
The respondents, the original writ petitioners, primarily sought compensation under the 2013 Act, arguing that the acquisition proceedings had lapsed due to non-payment of compensation.
| Appellants’ Submissions | Respondents’ Submissions |
|---|---|
| ✓ The High Court erred in applying the overruled judgment of Pune Municipal Corporation. | ✓ The acquisition proceedings should be deemed to have lapsed due to non-payment of compensation. |
| ✓ Physical possession of the land was taken, and the land was used for the construction of the Bankner Link Drain. | ✓ Compensation should be provided as per the 2013 Act. |
| ✓ The decision in Indore Development Authority clarifies that if possession has been taken, the acquisition does not lapse even if compensation is not paid. |
The innovativeness of the argument lies in the appellants’ reliance on the Constitution Bench decision in Indore Development Authority, which clarified the interpretation of Section 24(2) of the 2013 Act, and overruled the previous judgment in Pune Municipal Corporation, which was relied upon by the High Court.
Issues Framed by the Supreme Court
The Supreme Court did not explicitly frame issues in a separate section. However, the core issue before the court was:
- Whether the acquisition proceedings lapse under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, if the government has taken physical possession of the land but has not paid compensation?
Treatment of the Issue by the Court
The following table demonstrates as to how the Court decided the issues:
| Issue | Court’s Decision |
|---|---|
| Whether land acquisition proceedings lapse if compensation is not paid, despite the government taking possession of the land? | The Supreme Court held that the acquisition proceedings do not lapse if the government has taken physical possession of the land, even if compensation has not been paid. The Court relied on the ruling in Indore Development Authority which clarified that the word “or” in Section 24(2) of the 2013 Act should be read as “nor” or “and”. |
Authorities
The Supreme Court considered the following authorities:
| Authority | Court | How it was Considered |
|---|---|---|
| Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., [(2014) 3 SCC 183] | Supreme Court of India | Overruled by Indore Development Authority. The High Court had incorrectly relied on this case. |
| Indore Development Authority Vs. Manoharlal and Ors., [(2020) 8 SCC 129] | Supreme Court of India | Relied upon. The Constitution Bench decision 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 | Statute | The court interpreted the provision to mean that acquisition proceedings lapse only when both possession is not taken and compensation is not paid. |
| Section 16 of the Land Acquisition Act, 1894 | Statute | The court referred to this section to explain that once the possession has been taken, the land vests in the State. |
| Section 31 of the Land Acquisition Act, 1894 | Statute | The court referred to this section to explain the procedure for payment of compensation. |
Judgment
The Supreme Court allowed the appeal, setting aside the High Court’s decision. The Court held that the acquisition proceedings did not lapse because the government had taken physical possession of the land. The Court emphasized that the decision 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 both non-possession and non-payment of compensation are required for the acquisition to lapse.
| Submission by the Parties | Treatment by the Court |
|---|---|
| The High Court’s reliance on Pune Municipal Corporation. | Rejected as the case was overruled by Indore Development Authority. |
| The government had taken possession of the land and used it for the intended purpose. | Accepted as a valid point against the lapse of acquisition proceedings. |
| The respondents’ claim that the acquisition proceedings had lapsed due to non-payment of compensation. | Rejected as the possession of the land was already taken. |
| Authority | Court’s View |
|---|---|
| Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors. [(2014) 3 SCC 183] | The Court noted that this case was overruled by the Constitution Bench in Indore Development Authority and therefore, the High Court erred in relying on it. |
| Indore Development Authority Vs. Manoharlal and Ors., [(2020) 8 SCC 129] | The Court relied on this case to clarify that the word “or” in Section 24(2) should be read as “nor” or “and,” meaning that 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 interpretation of Section 24(2) of the 2013 Act as clarified by the Constitution Bench in Indore Development Authority. The Court emphasized that the physical possession of the land had been taken and used for the intended purpose. The fact that the land was being used for a public project (construction of Bankner Link Drain) also weighed in the Court’s consideration. The court also noted that the High Court had failed to consider the overruling of Pune Municipal Corporation by Indore Development Authority.
| Sentiment | Percentage |
|---|---|
| Interpretation of Section 24(2) of the 2013 Act | 40% |
| Physical possession of the land | 30% |
| Public project and usage | 20% |
| Overruling of Pune Municipal Corporation | 10% |
| Ratio | Percentage |
|---|---|
| Fact | 60% |
| Law | 40% |
The Court’s reasoning was based on the following points:
- The interpretation of Section 24(2) of the 2013 Act as clarified in Indore Development Authority.
- The fact that physical possession of the land had been taken.
- The land was being used for a public project.
The court considered the argument that the compensation was not paid but rejected it as the possession was taken. The court stated 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.”
“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.”
The court did not consider any alternative interpretations as the law was clear in Indore Development Authority.
Key Takeaways
- Land acquisition proceedings do not automatically lapse if compensation is not paid, provided the government has taken physical possession of the land.
- The word “or” in Section 24(2) of the 2013 Act should be read as “nor” or “and,” as clarified by the Supreme Court in Indore Development Authority.
- This judgment clarifies the legal position on land acquisition and provides certainty for government projects where possession has already been taken.
Directions
The Supreme Court quashed and set aside the High Court’s judgment and dismissed the writ petition.
Development of Law
The ratio decidendi of the case is that land acquisition proceedings do not lapse under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, if the government has taken physical possession of the land, irrespective of whether compensation has been paid. This decision reinforces the principle established in Indore Development Authority and overrules the earlier position in Pune Municipal Corporation, thereby clarifying the law on this point.
Conclusion
The Supreme Court’s decision in National Capital Territory of Delhi & Anr. vs. Subhash Chander Khatri & Ors. clarifies that land acquisition proceedings do not lapse if the government has taken physical possession of the land, even if compensation has not been paid. This judgment reaffirms the legal position established in Indore Development Authority and provides clarity on the interpretation of Section 24(2) of the 2013 Act.
Category:
✓ Land Acquisition
✓ Land Acquisition Act, 1894
✓ Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013
✓ Section 24, Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013
✓ Section 16, Land Acquisition Act, 1894
✓ Section 31, Land Acquisition Act, 1894
FAQ:
Q: What does this judgment mean for landowners whose land has been acquired?
A: This judgment clarifies that if the government has taken physical possession of the land, the acquisition process will not be invalidated even if compensation is not paid. Landowners are still entitled to compensation but cannot claim the acquisition has lapsed solely on the basis of non-payment.
Q: What is Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013?
A: Section 24(2) deals with the lapse of land acquisition proceedings. It states 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 is deemed to have lapsed. However, the Supreme Court has clarified that the word “or” should be read as “nor” or “and,” meaning both conditions must be met for the acquisition to lapse.
Q: What is the significance of the Indore Development Authority case?
A: The Indore Development Authority case is a landmark judgment by the Supreme Court’s Constitution Bench that clarified the interpretation of Section 24(2) of the 2013 Act. It overruled the earlier decision in Pune Municipal Corporation and clarified that both non-possession and non-payment of compensation are required for the acquisition to lapse.
Q: What should a landowner do if the government has taken possession of their land but has not paid compensation?
A: Landowners in this situation should pursue their claim for compensation under the relevant laws. However, they cannot claim the acquisition has lapsed solely due to non-payment of compensation if the government has already taken possession of the land.
Q: What is the effect of this judgment on ongoing land acquisition proceedings?
A: This judgment provides clarity and certainty for ongoing land acquisition proceedings. It ensures that if the government has taken possession of the land, the acquisition will not be invalidated due to non-payment of compensation alone. This helps in the completion of public projects without legal hurdles.