Supreme Court Upholds Land Acquisition, Overrules High Court on Lapse under Section 24(2) of the 2013 Act

Introduction

Date of the Judgment: 17 February 2023
Citation: Civil Appeal No. 946 of 2023 (@SLP (C) NO. 3120 OF 2023) (@ DIARY NO. 36848 of 2022)
Judges: M.R. Shah, J., C.T. Ravikumar, J., and Sanjay Karol, J.

Can land acquisition proceedings be deemed to have lapsed simply because compensation was not paid, even if the government has already taken possession of the land? The Supreme Court of India addressed this critical question in a recent case, overturning a decision by the High Court of Delhi. The core issue revolved around the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (the “Act, 2013”), specifically concerning the conditions under which land acquisition proceedings can lapse.

The Supreme Court bench, comprising Justices M.R. Shah, C.T. Ravikumar, and Sanjay Karol, delivered the judgment, with Justice M.R. Shah authoring the opinion. This case clarifies the circumstances under which land acquisition proceedings are considered valid, particularly when possession has been taken but compensation is pending.

Case Background

The case involves a dispute over land acquisition in Village Molarband, Delhi. The Government of NCT of Delhi initiated acquisition proceedings under the Land Acquisition Act, 1894. The Land Acquisition Collector (LAC) stated that a notification under Section 4 of the Land Acquisition Act was issued on April 4, 1964, followed by a notification under Section 6 on December 7, 1966. The award was declared on October 19, 1981. According to the LAC, possession of the land was taken on April 10, 1997, and handed over to the Delhi Development Authority (DDA). However, compensation was not paid to the landowners and was deposited in a Reserve Deposit (RD) on January 30, 1982.

The original writ petitioners, the landowners, argued that the entire land acquisition proceedings should be deemed to have lapsed under Section 24(2) of the Act, 2013, because compensation had not been paid. They sought the return of their land, implicitly acknowledging that they were not in possession. The LAC, however, contended that possession had been taken and the land was handed over to the DDA, thus fulfilling the requirements of the law.

Timeline:

Course of Proceedings

The High Court of Delhi allowed the writ petition filed by the landowners, relying on the Supreme Court’s decision in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183, which held that land acquisition proceedings lapse if compensation is not paid. The High Court declared that the acquisition of the lands in question was deemed to have lapsed under Section 24(2) of the Act, 2013. The High Court did not consider the fact that the LAC had taken possession of the land on April 10, 1997, and handed it over to the DDA.

The Government of NCT of Delhi and others appealed this decision to the Supreme Court, arguing that the High Court had erred in applying the law and ignoring the fact that possession had been taken.

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. It 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: 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.”

The Supreme Court also considered Section 4 of the Land Acquisition Act, 1894, which deals with the preliminary notification for land acquisition, and Section 6 of the same Act, which deals with the declaration of intended acquisition. Additionally, Section 16 of the Land Acquisition Act, 1894 which pertains to the taking of possession of land after the award is made, was also considered.

Arguments

The following were the arguments made by the parties:

• Appellants (Government of NCT of Delhi):
  • The Land Acquisition Collector (LAC) argued that the possession of the land was taken on April 10, 1997, and handed over to the DDA.
  • They contended that the compensation amount was deposited in the Reserve Deposit (RD) on January 30, 1982, even though it was not directly paid to the landowners.
  • They relied on the Supreme Court’s decision in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129, which clarified the interpretation of Section 24(2) of the Act, 2013.
  • The appellants argued that the High Court erred in relying on the overruled decision of Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183.
• Respondents (Landowners):
  • The landowners argued that since the compensation was not paid to them, the acquisition proceedings should be deemed to have lapsed under Section 24(2) of the Act, 2013.
  • They relied on the High Court’s decision, which was based on the Pune Municipal Corporation case.
  • They sought the return of the land, implicitly admitting that they were not in possession of the land.

The innovativeness of the argument of the Appellants was that they relied on the recent judgment of the Supreme Court in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129, which had overruled the judgment in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183, which was relied upon by the High Court.

Submissions Table

Issues Framed by the Supreme Court

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

1. Whether the High Court was correct in holding that the land acquisition proceedings had lapsed under Section 24(2) of the Act, 2013, based on the non-payment of compensation, despite the fact that possession had been taken by the government.

Treatment of the Issue by the Court:

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

Authorities

The Supreme Court considered the following authorities:

Judgment

The following table shows how each submission made by the parties was treated by the Court:

The following table shows how each authority was viewed by the Court:

The Supreme Court, in its judgment, emphasized that the High Court had erred in relying on the decision in Pune Municipal Corporation, which had been explicitly overruled by a Constitution Bench in Indore Development Authority. The Court reiterated that the word “or” in Section 24(2) of the Act, 2013, should be read as “nor” or “and,” meaning that the land acquisition proceedings would only lapse if both possession had not been taken and compensation had not been paid.

The Court noted that the Land Acquisition Collector had taken possession of the land on April 10, 1997, and handed it over to the DDA. Therefore, even if the compensation had not been paid directly to the landowners, the acquisition proceedings could not be deemed to have lapsed under Section 24(2) of the Act, 2013.

The Supreme Court quoted paragraphs 365 and 366 of the Indore Development Authority judgment, which clearly state that:

“365. Resultantly, the decision rendered in Pune Municipal Corpn. [Pune Municipal Corpn. v. Harakchand Misirimal Solanki, (2014) 3 SCC 183] is hereby overruled and all other decisions in which Pune Municipal Corpn. [Pune Municipal Corpn. v. Harakchand Misirimal Solanki, (2014) 3 SCC 183] has been followed, are also overruled.”

“366.3. 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.”

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the legal precedent set by the Constitution Bench in the Indore Development Authority case. The Court emphasized the importance of adhering to the correct interpretation of Section 24(2) of the Act, 2013, which clarifies that the lapse of land acquisition proceedings occurs only when both possession has not been taken and compensation has not been paid. The Court also focused on the factual aspect of the case, noting that the possession of the land was indeed taken by the government.

The following table shows the ratio of fact:law percentage that influenced the court to decide:

Key Takeaways

• The Supreme Court has clarified that the word “or” in Section 24(2) of the Act, 2013, should be read as “nor” or “and.” This means that land acquisition proceedings will only lapse if both possession has not been taken and compensation has not been paid.
• If the government has taken possession of the land, the non-payment of compensation alone will not result in the lapse of acquisition proceedings.
• The decision in Pune Municipal Corporation, which held that non-payment of compensation could lead to the lapse of acquisition, has been overruled.
• This judgment reinforces the principle that once possession is taken by the government, the land vests with the State, and there is no divesting provided under Section 24(2) of the 2013 Act.
• The judgment provides clarity to the interpretation of Section 24(2) of the Act, 2013, and will serve as a precedent in future land acquisition cases.

Directions

The Supreme Court did not issue any specific directions other than setting aside the High Court’s order.

Specific Amendments Analysis

There were no specific amendments discussed in this judgment.

Development of Law

The ratio decidendi of this case is that the word “or” in Section 24(2) of the Act, 2013, must be read as “nor” or “and.” This means that land acquisition proceedings will only lapse if both possession has not been taken and compensation has not been paid. This judgment reaffirms the position of law laid down 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

The Supreme Court allowed the appeal, setting aside the High Court’s judgment. The Court held that the land acquisition proceedings had not lapsed under Section 24(2) of the Act, 2013, because possession of the land had been taken by the government. The Court emphasized the correct interpretation of Section 24(2) as clarified in Indore Development Authority, reinforcing that the non-payment of compensation alone does not lead to the lapse of acquisition proceedings if possession has been taken.