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

Case Background

The case revolves around land acquisition proceedings initiated by the State of Gujarat for the resettlement of individuals displaced by the Narmada Project. The respondent, Jayantibhai Ishwarbhai Patel, owned land in Tarsava village, which was subject to acquisition. A notification under Section 4 of the Land Acquisition Act, 1894, was issued on April 11, 1991, followed by a Section 6 notification on February 6, 1992. A consent award was passed on June 11, 1993, with an agreement to pay 90% of the compensation initially and the remaining 10% later. However, the landowner had a change of heart and requested the cancellation of the acquisition on February 13, 1995. The Assistant Commissioner initially cancelled the order for compensation payment on March 7, 1995, but the acquisition itself was not cancelled. The matter remained dormant until 2009, when the Assistant Commissioner cancelled the 1995 order and restored the compensation payment orders. The land owner was asked to receive the compensation on 16.04.2010. The land owner then filed a writ petition challenging the acquisition.

Timeline

Course of Proceedings

The High Court of Gujarat initially allowed the writ petition, declaring that the acquisition had lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, as neither compensation was paid nor possession was taken. The High Court set aside the land acquisition award dated 11.06.1993. The State of Gujarat then filed a review petition, which was dismissed. The State of Gujarat and other authorities then appealed to the Supreme Court against the High Court’s decision.

Legal Framework

The case primarily involves the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (Act, 2013), which deals with the lapse of land acquisition proceedings. This section 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 court also considered Section 11 of the Land Acquisition Act, 1894, which pertains to the passing of awards in land acquisition cases.

Arguments

Arguments by the State of Gujarat:

• The State argued that the issue of deemed lapse under Section 24(2) of the Act, 2013, is no longer res integra, given the Supreme Court’s decision in Indore Development Authority vs. Manoharlal and Ors. (2020) 8 SCC 129.
• The consent award was passed on 11.06.1993, and orders were issued to pay 90% and 10% compensation. The landowner did not accept the compensation.
• The Assistant Commissioner was justified in restoring the compensation payment orders on 21.01.2009.
• The High Court erred in setting aside the award, as the landowner refused compensation and continued cultivating the land.
• Possession was taken by drawing a panchnama, which is a legally permissible mode.
• There was no lapse on the part of the acquiring body as the compensation was offered and the possession was taken, and the landowner refused to accept the compensation.

Arguments by the Landowner:

• The landowner argued that the High Court did not decide on the legality of the Assistant Commissioner’s order dated 21.01.2009, which cancelled the earlier order dated 07.03.1995.
• The landowner withdrew consent, and the Assistant Commissioner accepted this on 07.03.1995. Therefore, the order dated 21.01.2009 was illegal.
• Since the landowner remained in possession and compensation was not paid, the acquisition should lapse under Section 24(2) of the Act, 2013.
• The High Court was correct in setting aside the award as it was not implemented for many years.

Submissions Table:

Issues Framed by the Supreme Court

The Supreme Court addressed the following issue:

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

Cases Relied Upon:

• Indore Development Authority vs. Manoharlal and Ors. (2020) 8 SCC 129 – Supreme Court of India. This case was relied upon for the interpretation of Section 24(2) of the Act, 2013, and the conditions for deemed lapse of acquisition.

Legal Provisions Considered:

• Section 4 of the Land Acquisition Act, 1894 – Initial notification for land acquisition.
• Section 6 of the Land Acquisition Act, 1894 – Declaration of intended acquisition.
• Section 11 of the Land Acquisition Act, 1894 – Passing of awards in land acquisition cases.
• Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 – Deemed lapse of acquisition.

Authority Consideration Table:

Judgment

Treatment of Submissions:

Treatment of Authorities:

• The Supreme Court relied heavily on Indore Development Authority vs. Manoharlal and Ors. (2020) 8 SCC 129* to interpret Section 24(2) of the Act, 2013. The Court reiterated that the word “or” in Section 24(2) should be read as “nor” or “and,” meaning that the deemed lapse occurs only when both possession is not taken and compensation is not paid due to the inaction of authorities. The Court also stated that tendering the compensation is sufficient to fulfill the obligation and if the landowner refuses to accept the compensation, there is no lapse.

What weighed in the mind of the Court?

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

• The fact that the acquiring body had offered compensation as per the consent award, fulfilling its obligation.
• The fact that possession was taken by drawing a panchnama, a legally permissible method.
• The absence of any lapse on the part of the acquiring body in offering compensation or taking possession.
• The landowner’s refusal to accept the compensation, which cannot be a ground to claim the acquisition has lapsed.
• The interpretation of Section 24(2) of the Act, 2013, as laid down in Indore Development Authority vs. Manoharlal and Ors.

Sentiment Analysis Ranking:

Fact:Law Ratio:

Logical Reasoning Flowchart:

The Court considered the factual aspects of the case, such as the consent award, the offer of compensation, and the taking of possession by drawing a panchnama. The legal aspect was primarily the interpretation of Section 24(2) of the Act, 2013, and the precedent set by Indore Development Authority. The Court emphasized that the landowner’s refusal to accept compensation could not be a ground for claiming a lapse of acquisition.

The court quoted 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.”

“It is an admitted position that after the consent award, under Section 11 of the Act, 1894, was passed on 11.06.1993, the amount of compensation was in fact offered to the land owner alongwith other land owners and the respondent – original land owner was called upon to remain present in the office of Talati­cum­Mantri to receive / accept the compensation. However, the land owner refused to accept the compensation though offered.”

“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. In the present case, both the conditions are not satisfied.”

Key Takeaways

• Once compensation is offered as per an award, the obligation of the acquiring body is complete, even if the landowner refuses to accept it.
• Taking possession by drawing a panchnama is a legally valid mode of taking possession.
• A deemed lapse of acquisition under Section 24(2) of the Act, 2013, requires both non-payment of compensation and non-taking of possession due to the inaction of the acquiring body.
• Landowners cannot claim a lapse of acquisition if they refuse to accept compensation that has been offered.
• This judgment reinforces the interpretation of Section 24(2) as established in Indore Development Authority vs. Manoharlal and Ors.

Directions

The Supreme Court did not provide any specific directions other than quashing the High Court’s judgment and order.

Development of Law

The ratio decidendi of this case is that a land acquisition does not lapse under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, if the acquiring body has offered compensation and taken possession (even symbolically), even if the landowner refuses to accept the compensation. This reinforces the interpretation of Section 24(2) as laid down in Indore Development Authority vs. Manoharlal and Ors., clarifying that the deemed lapse requires inaction on the part of the acquiring body, not the refusal of the landowner.

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 Act, 2013, as the acquiring body had offered compensation and taken possession by drawing a panchnama. The Court emphasized that the landowner’s refusal to accept compensation cannot be a ground for claiming a lapse of acquisition. This judgment reaffirms the principles established in Indore Development Authority vs. Manoharlal and Ors., providing clarity on the conditions for deemed lapse of land acquisition proceedings.