Supreme Court Upholds Land Acquisition: State of Gujarat vs. Jayantibhai Ishwarbhai Patel (2023)

Date of the Judgment: March 17, 2023
Citation: 2023 INSC 239
Judges: M. R. Shah, J., Manoj Misra, J.
Can a land acquisition be deemed to have lapsed if the landowner refuses compensation after a consent award? The Supreme Court of India recently addressed this question, focusing on the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The core issue revolved around whether the acquisition would lapse if the landowner refused to accept the compensation and continued to possess the land, despite the authorities having taken possession by drawing a panchnama. The judgment was delivered by a two-judge bench comprising Justice M. R. Shah and Justice Manoj Misra.

Case Background

The case involves a land acquisition initiated by the State of Gujarat for the resettlement of Narmada Project oustees. The respondent, Jayantibhai Ishwarbhai Patel, owned land in Tarsava village, which was subject to acquisition.

• April 11, 1991: A notification under Section 4 of the Land Acquisition Act, 1894, was issued to acquire the land.
• February 6, 1992: A notification under Section 6 of the Land Acquisition Act, 1894, was issued.
• June 11, 1993: A consent award was passed based on an agreement with the landowner, requiring 90% of the compensation to be paid initially and the remaining 10% later.
• February 13, 1995: The landowner requested the Assistant Commissioner, Sardar Sarovar Rehabilitation Agency, to release the land from acquisition and not to pay the compensation due to family disagreements.
• March 7, 1995: The Assistant Commissioner recorded that the landowner did not accept the 90% compensation, and the order for payment of compensation was cancelled.
• January 21, 2009: The Assistant Commissioner cancelled the order dated March 7, 1995, stating that the land had vested in the Sardar Sarovar Rehabilitation Agency and that compensation payment was mandatory.
• April 5, 2010: The Special Land Acquisition Officer informed the landowner that his compensation payment was scheduled for April 16, 2010.

The landowner then filed a writ petition challenging the consent award, arguing that his request to withdraw consent had been accepted, and neither compensation nor possession had been taken. The High Court ruled in favor of the landowner, stating that the acquisition had lapsed under Section 24(2) of the 2013 Act.

Timeline

Course of Proceedings

The High Court of Gujarat initially set aside the order dated April 5, 2010, stating that it could not have been passed after 15 years. The High Court also held that since neither compensation was paid nor possession taken, the acquisition was deemed to have lapsed under Section 24(2) of the Act, 2013. A review petition filed by the Assistant Commissioner was dismissed.

Legal Framework

The primary legal provisions in this case are:

• 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 if physical possession of the land has not been taken or compensation has not been paid. 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.”
• Section 11 of the Land Acquisition Act, 1894: This section pertains to the making of an award by the Collector after the inquiry into the objections to the acquisition.

Arguments

Arguments by the State of Gujarat (Appellants):

• The issue of deemed lapse under Section 24(2) of the Act, 2013, is no longer res integra due to the decision in Indore Development Authority vs. Manoharlal and Ors. [(2020) 8 SCC 129].
• A consent award was passed on June 11, 1993, and orders were issued to pay 90% and 10% compensation. Although the landowner refused to accept the compensation, the award remained valid.
• The Assistant Commissioner was justified in passing the order dated January 21, 2009, to restore the compensation payment, which was communicated to the landowner on April 5, 2010.
• The High Court erred in setting aside the consent award, as the landowner’s refusal to accept compensation and continued possession did not invalidate it. The possession was taken by drawing a panchnama.
• There was no lapse on the part of the acquiring body. The landowner refused the compensation, and the possession was taken by drawing a panchnama, which is a legally permissible mode of taking possession.

Arguments by the Landowner (Respondent):

• The High Court did not decide on the legality of the order dated January 21, 2009, and the communication dated April 5, 2010. The matter should be remanded to the High Court for consideration.
• The landowner withdrew his consent, which was accepted by the Assistant Commissioner on March 7, 1995. The cancellation of this order after 15 years was illegal.
• Since the landowner remained in physical possession and the compensation was not paid for many years, the acquisition should lapse under Section 24(2) of the Act, 2013.
• The High Court was correct in setting aside the consent award, as it was not implemented for many years, and the land was not used for its intended purpose.

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was:

1. Whether, in the facts and circumstances of the case, there shall be deemed lapse of acquisition under Section 24(2) of the Act, 2013.

Treatment of the Issue by the Court

Authorities

The Supreme Court relied on the following authorities:

• Indore Development Authority vs. Manoharlal and Ors. [(2020) 8 SCC 129] – Supreme Court of India: This case clarified the interpretation of Section 24(2) of the 2013 Act, particularly regarding the meaning of “paid” and “possession.” The Court held that the word “or” in Section 24(2) should be read as “nor” or “and,” and that a deemed lapse occurs only when both possession is not taken and compensation is not paid due to the inaction of authorities. It also clarified that taking possession by drawing a panchnama is a legally permissible mode of taking possession.
• Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013: The Court interpreted this section to mean that a lapse occurs only when the authorities fail to take possession and pay compensation due to their inaction.
• Section 11 of the Land Acquisition Act, 1894: The Court considered the consent award passed under this provision.

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The Supreme Court followed the decision in Indore Development Authority vs. Manoharlal and Ors. [(2020) 8 SCC 129], stating that the word “or” in Section 24(2) should be read as “nor” or “and.” The court also accepted that taking possession by drawing panchnama was a legally valid mode of taking possession.
• The Court interpreted Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 to mean that a lapse occurs only if the authorities fail to take possession and pay compensation due to their inaction.
• The Court considered the consent award passed under Section 11 of the Land Acquisition Act, 1894, noting that the compensation was offered as per the consent award, but the landowner refused to accept it.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• Landowner’s Refusal of Compensation: The fact that the landowner refused to accept the compensation offered was a significant factor. The Court emphasized that the deemed lapse under Section 24(2) is intended to address lapses on the part of the acquiring body, not situations where the landowner refuses compensation.
• Possession by Panchnama: The Court reiterated that taking possession by drawing a panchnama is a legally valid mode of taking possession, as established in Indore Development Authority vs. Manoharlal and Ors. [(2020) 8 SCC 129].
• No Lapse by Acquiring Body: The Court found that there was no lapse on the part of the acquiring body, as they had offered compensation and taken possession through panchnama.
• Consent Award: The Court noted that a consent award was passed under Section 11 of the Land Acquisition Act, 1894 and that the High Court erred in setting it aside.

Logical Reasoning:

The Court rejected the argument that the acquisition had lapsed, emphasizing that the landowner’s refusal to accept compensation and the taking of possession by drawing panchnama meant that the conditions for a deemed lapse under Section 24(2) were not met.

The Court quoted the following from the judgment:

“In the present case, there was a consent award under Section 11 of the Act, 1894. The possession was taken by drawing the panchnama at the time of passing of the consent award dated 11.06.1993.”

“Even otherwise, in the facts and circumstances of the case, there shall not be any deemed lapse under Section 24(2) of the Act, 2013 on the ground that the amount of compensation was not paid.”

“Therefore, for a deemed lapse under Section 24(2) of the Act, 2013, there shall be a lapse on the part of the Acquiring Body / beneficiary in not taking the possession and not paying the compensation.”

There were no dissenting opinions in the judgment.

Key Takeaways

• A land acquisition will not lapse under Section 24(2) of the 2013 Act if the acquiring body has offered compensation, even if the landowner refuses to accept it.
• Taking possession of land by drawing a panchnama is a legally valid mode of taking possession.
• The deemed lapse provision under Section 24(2) is intended to address lapses on the part of the acquiring body, not situations where the landowner refuses compensation.
• Consent awards under Section 11 of the Land Acquisition Act, 1894, cannot be easily set aside on the grounds that the award was not implemented for a long time.

Directions

The Supreme Court quashed and set aside the impugned judgment and order of the High Court.

Development of Law

The ratio decidendi of this case is that a land acquisition will not lapse under Section 24(2) of the 2013 Act if the acquiring body has offered compensation, even if the landowner refuses to accept it, and if the possession has been taken by drawing a panchnama. This judgment reinforces the interpretation of Section 24(2) established in Indore Development Authority vs. Manoharlal and Ors. [(2020) 8 SCC 129], clarifying that the deemed lapse provision applies only when the authorities are at fault for not taking possession or paying compensation.

Conclusion

The Supreme Court allowed the appeals, setting aside the High Court’s judgment. The Court held that the land acquisition did not lapse under Section 24(2) of the 2013 Act because the compensation was offered and refused by the landowner, and possession was taken by drawing a panchnama. The Court emphasized that the deemed lapse provision is intended to address lapses by the acquiring body, not situations where the landowner refuses compensation.