Supreme Court Upholds Land Acquisition: Possession Valid Despite Non-Tender of Compensation (15 December 2022)

Introduction

Date of the Judgment: 15 December 2022

Citation: 2022 INSC 708

Judges: M.R. Shah, J. and S. Ravindra Bhat, J.

Can a land acquisition be invalidated simply because compensation hasn’t been directly given to the landowners, even if the government has taken possession of the land? The Supreme Court of India recently addressed this critical question in a case involving the Delhi Development Authority (DDA) and several landowners. 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, and its impact on land acquisition proceedings.

The Supreme Court bench, composed of Justices M.R. Shah and S. Ravindra Bhat, delivered the judgment. Justice M.R. Shah authored the opinion for the bench.

Case Background

The case revolves around land acquired by the government in Delhi. The initial notification for acquisition was issued in 1964 under the Land Acquisition Act, 1894. The award for compensation was declared on December 10, 1997. Subsequently, the possession of the land was handed over to the Delhi Development Authority (DDA) on May 26, 1998. The landowners later claimed that the acquisition had lapsed under Section 24(2) of the 2013 Act, arguing that they had not received compensation. The High Court of Delhi agreed with the landowners, leading to the present appeal by the DDA and the Government of NCT of Delhi.

The original writ petitioners (respondents in this appeal) argued that the possession certificate dated May 26, 1998, did not explicitly state that the Land Acquisition Collector (LAC) had taken possession from them. They contended that the certificate only mentioned the handing over of possession by the Tehsil staff to the Land and Building Department. They argued that only the Collector was empowered to take possession under Section 16 of the Land Acquisition Act, 1894, and that possession taken by his subordinates was unlawful. They also disputed that the possession was ever taken from them.

Timeline

Course of Proceedings

The High Court of Delhi, in its judgment dated October 3, 2018, ruled in favor of the original writ petitioners, stating that the land acquisition had lapsed under Section 24(2) of the 2013 Act because compensation had not been tendered to the landowners. The High Court, despite acknowledging that the possession was taken, focused on the non-payment of compensation. The Delhi Development Authority (DDA) and the Government of NCT of Delhi appealed this decision to the Supreme Court.

Legal Framework

The Supreme Court primarily examined 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.

Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 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 Court also referred to Section 16 of the Land Acquisition Act, 1894, which deals with the Collector’s power to take possession of land after an award has been made.

Section 16 of the Land Acquisition Act, 1894 states:
“Power to take possession.—When the Collector has made an award under section 11, he may take possession of the land, which shall thereupon vest absolutely in the [Government], free from all encumbrances.”

The Court also discussed Section 31 of the Land Acquisition Act, 1894, which deals with payment of compensation.

Section 31(1) of the Land Acquisition Act, 1894 states:
“Payment of compensation or deposit of same in Court.—(1) On making an award under section 11, the Collector shall tender payment of the compensation awarded by him to the persons interested entitled thereto according to the award, and shall pay it to them unless prevented by some one or more of the contingencies mentioned in the next sub-section.”

The Supreme Court also mentioned Section 34 of the Land Acquisition Act, 1894, which deals with interest on compensation.

The Court’s interpretation of these provisions was crucial in determining whether the acquisition had lapsed.

Arguments

The arguments presented before the Supreme Court can be summarized as follows:

• Arguments by the Appellants (DDA and Government of NCT of Delhi):
  • The possession of the land was taken on May 26, 1998, and handed over to the DDA. This fact was specifically mentioned in the counter-affidavit filed by the LAC and DDA before the High Court, and no rejoinder was filed by the landowners.
  • The acquisition was complete, and the land vested in the government, free from any encumbrances.
  • The High Court’s decision that the acquisition lapsed under Section 24(2) of the 2013 Act was incorrect, as the possession had been taken, even if compensation had not been tendered.
  • The word “or” in Section 24(2) of the 2013 Act should be read as “nor” or “and,” meaning that if either possession is taken or compensation is paid, the acquisition does not lapse.
• Arguments by the Respondents (Landowners):
  • The possession certificate dated May 26, 1998, did not mention the taking of possession by the Land Acquisition Collector (LAC) from the landowners. It only mentioned the handing over of possession by the Tehsil staff to the Land and Building Department.
  • Under Section 16 of the Land Acquisition Act, 1894, only the Collector was authorized to take possession, and possession taken by his subordinates was unlawful.
  • The landowners disputed the actual taking of possession and claimed to be in possession of the land.
  • Since compensation was not tendered, the acquisition should be deemed to have lapsed under Section 24(2) of the 2013 Act.

Submissions Table

Issues Framed by the Supreme Court

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

1. Whether the acquisition of land under the Land Acquisition Act, 1894, can be deemed to have lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, solely on the ground that compensation has not been tendered, despite the fact that possession of the land has 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 relied on the following authorities:

Judgment

The Supreme Court allowed the appeals, setting aside the High Court’s judgment. The Court held that the acquisition of land did not lapse under Section 24(2) of the 2013 Act, as the possession had been taken by the government.

The Court specifically addressed the submissions made by the parties:

How each authority was viewed by the Court?

The Court viewed the authorities as follows:

• Indore Development Authority vs. Manoharlal and Ors. [(2020) 8 SCC 129]*: The Court followed this Constitution Bench decision, which clarified the interpretation of Section 24(2) of the 2013 Act. The Court reiterated that the word “or” in Section 24(2) should be read as “nor” or “and,” meaning that if either possession is taken or compensation is paid, the acquisition does not 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 and the precedent set by the Constitution Bench in Indore Development Authority vs. Manoharlal and Ors. [(2020) 8 SCC 129]. The Court emphasized the following points:

• The fact that possession of the land had been taken by the government.
• The interpretation of the word “or” in Section 24(2) as “nor” or “and”, as laid down in the Indore Development Authority case.
• The absence of any challenge to the possession certificate at the time of taking possession.

Fact:Law Ratio:

Logical Reasoning

Key Takeaways

• The Supreme Court clarified that under Section 24(2) of the 2013 Act, land acquisition does not lapse if possession has been taken, even if compensation has not been tendered.
• The word “or” in Section 24(2) should be read as “nor” or “and.”
• Landowners cannot claim that acquisition proceedings have lapsed solely because compensation has not been tendered if possession has been taken.
• The decision reaffirms the importance of the government’s possession of land in land acquisition proceedings.

Directions

The Supreme Court did not issue any specific directions in this case, other than allowing the appeals and setting aside the High Court’s judgment.

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, should be read as “nor” or “and.” This interpretation means that if either possession has been taken or compensation has been paid, the land acquisition proceedings do not lapse. This reaffirms the position of law laid down in Indore Development Authority vs. Manoharlal and Ors. [(2020) 8 SCC 129].

Conclusion

In conclusion, the Supreme Court’s judgment in Delhi Development Authority vs. Chandermal & Ors. clarifies that land acquisition proceedings do not lapse under Section 24(2) of the 2013 Act if possession has been taken by the government, even if compensation has not been tendered. This decision reinforces the interpretation of Section 24(2) as laid down by the Constitution Bench in Indore Development Authority vs. Manoharlal and Ors. [(2020) 8 SCC 129], and provides important guidance for future land acquisition cases.