LEGAL ISSUE: Whether land acquisition proceedings lapse under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 if possession is taken but compensation is not paid, or vice-versa.
CASE TYPE: Land Acquisition
Case Name: Land Acquisition Collector vs. Jai Prakash Tyagi & Ors.
Judgment Date: 24 February 2023
Date of the Judgment: 24 February 2023
Citation: 2023 INSC 166
Judges: M.R. Shah, J. and C.T. Ravikumar, J.
Can land acquisition be deemed to have lapsed if the authorities have taken possession of the land but not paid compensation, or if compensation has been paid but not possession taken? The Supreme Court addressed this critical question in the case of Land Acquisition Collector vs. Jai Prakash Tyagi & Ors., clarifying the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. This judgment overturns a High Court decision that had ruled in favor of the landowners, emphasizing that both possession and payment of compensation are necessary for acquisition proceedings to be considered complete and valid. The bench comprised of Justices M.R. Shah and C.T. Ravikumar, with the judgment authored by Justice M.R. Shah.
Case Background
The case revolves around land acquisition proceedings in the revenue estate of village Wazirabad, specifically concerning Khasra Nos. 35/2/2, 36/2/2, and 40/2/2, totaling 15 bighas and 18 biswa. The Land Acquisition Collector (LAC) claimed that possession of Khasra No. 35/2/2 (6 bighas 04 biswa) was taken on September 22, 1997. For Khasra No. 36/2/2 (4 bighas 13 biswa), possession of 3 bighas was taken on the same date, but 1 bigha 13 biswa remained with the landowners. As for Khasra No. 40/2/2 (5 bighas 01 biswa), the LAC admitted that possession was never taken. The LAC cited stay orders in previous writ petitions (Nos. 2506/1982 and 3631/1982) as a reason for not taking full possession. The landowners filed a writ petition before the High Court of Delhi, arguing that the acquisition proceedings had lapsed under Section 24(2) of the Act of 2013.
Timeline
| Date | Event |
|---|---|
| September 22, 1997 | Land Acquisition Collector (LAC) claims possession of Khasra No. 35/2/2 (6 bighas 04 biswa) was taken. |
| September 22, 1997 | LAC claims possession of 3 bighas out of Khasra No. 36/2/2 (4 bighas 13 biswa) was taken. |
| Prior to 2013 | Stay orders in writ petitions Nos. 2506/1982 and 3631/1982 were issued, affecting possession of some lands. |
| 2013 | Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 came into force. |
| 2015 | Writ Petition (C) No. 2198 of 2015 filed by land owners in the High Court of Delhi. |
| 2023 | Supreme Court judgment in Civil Appeal No. 1300 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 landowners. The High Court declared that the acquisition proceedings for the subject lands had lapsed under Section 24(2) of the Act of 2013. The Land Acquisition Collector appealed this decision to the Supreme Court.
Legal Framework
The core of this case revolves around Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. This section addresses the lapse of land acquisition proceedings if certain conditions are met. The Supreme Court had to interpret the phrase “possession has not been taken or the compensation has not been paid” in Section 24(2). The relevant part of 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 also considered the Land Acquisition Act, 1894, particularly Section 16, which deals with the vesting of land in the State after possession is taken, and Section 31, which deals with the payment of compensation.
Arguments
The Land Acquisition Collector (LAC) argued that the High Court erred in applying the decision of Pune Municipal Corporation (supra), which had been overruled by a Constitution Bench of the Supreme Court in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129. The LAC contended that the High Court did not consider the fact that possession of some of the lands had been taken, and that the word “or” in Section 24(2) should be read as “nor” or “and”. The LAC relied on the judgment of Indore Development Authority (supra) to argue that the acquisition proceedings would only lapse if both possession was not taken and compensation was not paid.
The landowners, on the other hand, relied on the High Court’s decision, which had applied Pune Municipal Corporation (supra), to argue that the acquisition proceedings had lapsed because either possession was not taken or compensation was not paid. They contended that the word “or” in Section 24(2) should be interpreted disjunctively, meaning that the non-fulfillment of either condition would lead to a lapse of the acquisition proceedings.
| Main Submission | Sub-Submissions |
|---|---|
| Land Acquisition Collector (Appellant) |
|
| Landowners (Respondents) |
|
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 High Court was correct in declaring that the acquisition proceedings had lapsed under Section 24(2) of the Act of 2013, based on the decision in Pune Municipal Corporation (supra).
The sub-issue was:
- How the word “or” in Section 24(2) of the Act of 2013 should be interpreted.
Treatment of the Issue by the Court
| Issue | Court’s Decision |
|---|---|
| Whether the High Court was correct in declaring that the acquisition proceedings had lapsed under Section 24(2) of the Act of 2013, based on the decision in Pune Municipal Corporation (supra). | The Supreme Court held that the High Court erred in relying on Pune Municipal Corporation (supra), which had been overruled. The Supreme Court set aside the High Court’s judgment. |
| How the word “or” in Section 24(2) of the Act of 2013 should be interpreted. | The Supreme Court held that the word “or” in Section 24(2) has to be read as “nor” or “and”. The deemed lapse of land acquisition proceedings under Section 24(2) takes place only when both possession has not been taken and compensation has not been paid. |
Authorities
The Supreme Court relied on the following authorities:
| Authority | Court | How Considered | Legal Point |
|---|---|---|---|
| Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183 | Supreme Court of India | Overruled | Interpretation of Section 24(2) of the Act of 2013. |
| Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129 | Supreme Court of India | Followed | Interpretation of Section 24(2) of the Act of 2013 and overruling of Pune Municipal Corporation (supra). |
| Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 | Statute | Interpreted | Deemed lapse of land acquisition proceedings. |
| Section 16 of the Land Acquisition Act, 1894 | Statute | Considered | Vesting of land in the State after possession is taken. |
| Section 31 of the Land Acquisition Act, 1894 | Statute | Considered | Payment of compensation. |
Judgment
| Submission by Parties | Court’s Treatment |
|---|---|
| The High Court correctly applied Pune Municipal Corporation (supra) and the acquisition proceedings had lapsed. | Rejected. The Court held that Pune Municipal Corporation (supra) was overruled by Indore Development Authority (supra). |
| The word “or” in Section 24(2) should be interpreted disjunctively. | Rejected. The Court held that the word “or” should be read as “nor” or “and”. |
| The acquisition proceedings had lapsed because either possession was not taken or compensation was not paid. | Rejected. The Court held that the acquisition proceedings lapse only when both possession has not been taken and compensation has not been paid. |
| The High Court erred in applying the decision of Pune Municipal Corporation (supra). | Accepted. The Court held that the High Court erred in applying the decision of Pune Municipal Corporation (supra). |
| The acquisition proceedings would only lapse if both possession was not taken and compensation was not paid. | Accepted. The Court held that the acquisition proceedings would only lapse if both possession was not taken and compensation was not paid. |
Authorities and their use by the Court:
- Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183*: The High Court relied on this case, but the Supreme Court explicitly overruled it.
- Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129*: The Supreme Court relied on this case, which overruled Pune Municipal Corporation (supra), to interpret Section 24(2) of the Act of 2013.
The Supreme Court, applying the law laid down in Indore Development Authority (supra), quashed the High Court’s judgment and held that there was no deemed lapse of the acquisition proceedings under Section 24(2) of the Act of 2013. The Court clarified that the word “or” in Section 24(2) must be read as “nor” or “and,” meaning that both non-payment of compensation and non-taking of possession are required for the acquisition to lapse.
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily driven by the need to adhere to the precedent set by the Constitution Bench in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129. The Court emphasized the importance of the interpretation of Section 24(2) of the Act of 2013, specifically the word “or,” which was clarified to mean “nor” or “and.” This interpretation was crucial to ensure that land acquisition proceedings are not deemed to lapse if either possession has been taken or compensation has been paid. The Court also considered the factual matrix of the case, where possession of a significant portion of the land had been taken, and the need to uphold the validity of the acquisition proceedings.
| Reason | Percentage |
|---|---|
| Adherence to the precedent set by the Constitution Bench in Indore Development Authority (supra) | 40% |
| Interpretation of Section 24(2) of the Act of 2013, specifically the word “or” | 35% |
| Factual matrix of the case, where possession of a significant portion of the land had been taken | 25% |
| Category | Percentage |
|---|---|
| Fact | 30% |
| Law | 70% |
Logical Reasoning:
The Supreme Court considered the interpretation of Section 24(2) of the Act of 2013 and the overruling of Pune Municipal Corporation (supra) in Indore Development Authority (supra). The Court rejected the interpretation of the word “or” as disjunctive and held that the acquisition proceedings would lapse only if both possession was not taken and compensation was not paid. The Court did not consider any alternative interpretation.
The Court’s decision is clear: if either possession has been taken or compensation has been paid, the land acquisition proceedings do not lapse under Section 24(2) of the Act of 2013.
“Resultantly, the decision rendered in Pune Municipal Corporation [Pune Municipal Corpn. v. Harakchand Misirimal Solanki, (2014) 3 SCC 183] is hereby overruled and all other decisions in which Pune Municipal Corporation [Pune Municipal Corpn. v. Harakchand Misirimal Solanki, (2014) 3 SCC 183] has been followed, are also overruled.”
“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.”
Key Takeaways
- The Supreme Court overruled the High Court’s decision, which had relied on the overruled judgment of Pune Municipal Corporation (supra).
- The word “or” in Section 24(2) of the Act of 2013 must be read as “nor” or “and.”
- Land acquisition proceedings will only lapse under Section 24(2) if both possession has not been taken and compensation has not been paid.
- If either possession has been taken or compensation has been paid, the acquisition proceedings do not lapse.
- Landowners who have not received compensation may still be entitled to it under the Land Acquisition Act, 1894.
Directions
The Supreme Court directed that if the original landowners or persons interested have not been paid compensation, they may be paid in accordance with the provisions of the Land Acquisition Act, 1894.
Development of Law
The ratio decidendi of this case is that the word “or” in Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, must be interpreted as “nor” or “and.” This clarifies that for land acquisition proceedings to lapse, both possession must not have been taken and compensation must not have been paid. This judgment reinforces the position of law established in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129 and overrules the previous position taken in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183.
Conclusion
In the case of Land Acquisition Collector vs. Jai Prakash Tyagi & Ors., the Supreme Court overturned the High Court’s decision, clarifying 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 the word “or” must be read as “nor” or “and,” meaning that both non-payment of compensation and non-taking of possession are necessary for land acquisition proceedings to lapse. This decision reinforces the precedent set in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129 and ensures that land acquisition proceedings are not easily invalidated.