Supreme Court Upholds Land Acquisition: Union of India vs. Rajesh Kumar (2023)

Date of the Judgment: March 13, 2023

Citation: Civil Appeal No. 1615 of 2023 (@ SLP (C) No. 737 of 2018)

Judges: M.R. Shah, J. and Manoj Misra, J.

Can land acquisition proceedings be invalidated if compensation is not paid, even after the government has taken possession of the land? The Supreme Court addressed this critical question in a recent case, 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 clarifies the circumstances under which land acquisition proceedings are deemed to have lapsed. The bench comprised Justices M.R. Shah and Manoj Misra, with the judgment authored by Justice M.R. Shah.

Case Background

The case involves a land acquisition dispute where the Union of India, through the Land Acquisition Collector, sought to acquire land. The original writ petitioner had acknowledged that the possession of the land was taken on September 22, 1997. However, the High Court of Delhi ruled in favor of the petitioner, stating 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 (Act, 2013) because compensation had not been paid. The Union of India appealed this decision to the Supreme Court.

Timeline

Course of Proceedings

The High Court of Delhi had allowed the writ petition, declaring that the land acquisition proceedings had lapsed under Section 24(2) of the Act, 2013, relying on the fact that compensation had not been paid, despite the fact that possession had been taken. The High Court had relied upon the decision of the Supreme Court in the case of Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183. The Union of India appealed this decision to the Supreme Court.

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 addresses the lapse of land acquisition proceedings initiated under the Land Acquisition Act, 1894, if certain conditions are met.

Section 24(2) of the 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 Supreme Court has interpreted this section to mean that acquisition proceedings lapse only if both possession has not been taken AND compensation has not been paid. The word “or” has been interpreted as “nor” or “and”.

Arguments

The appellant (Union of India) argued that the High Court erred in applying Section 24(2) of the Act, 2013, as the possession of the land had already been taken on September 22, 1997. They contended that the High Court’s reliance on the Pune Municipal Corporation case was incorrect because that decision had been overruled.

The respondent (original writ petitioner) argued that since compensation had not been paid, the acquisition proceedings should be deemed to have lapsed under Section 24(2) of the Act, 2013.

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was:

1. Whether the acquisition proceedings under the Land Acquisition Act, 1894, are deemed to have lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, when possession has been taken but compensation has not been paid.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Judgment

How each authority was viewed by the Court?

• The Supreme Court **overruled** Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183* and other decisions which followed it.
• The Supreme Court **relied upon** the Constitution Bench 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 Supreme Court **overruled** Sree Balaji Nagar Residential Assn. v. State of T.N., (2015) 3 SCC 353* and other decisions which followed it.
• The Supreme Court **clarified** Indore Development Authority v. Shailendra, [(2018) 3 SCC 412]* regarding the interpretation of the proviso to Section 24(2).

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 Act, 2013, as clarified by the Constitution Bench in Indore Development Authority. The court emphasized that the word “or” in the section must be read as “nor” or “and,” meaning that both non-possession and non-payment of compensation are required for the acquisition to lapse. The court also took into account the fact that the original writ petitioner had admitted that possession was taken on September 22, 1997.

The court rejected the High Court’s interpretation of Section 24(2), stating that the High Court had incorrectly relied on the overruled Pune Municipal Corporation case. The Supreme Court emphasized that the word “or” in Section 24(2) must be read as “nor” or “and”, as clarified in Indore Development Authority. This means that for acquisition proceedings to lapse, both possession must not have been taken and compensation must not have been paid.

The Supreme Court quoted from the Constitution Bench decision in Indore Development Authority:

“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.”

The Court also stated:

“Once award has been passed on taking possession under Section 16 of the 1894 Act, the land vests in State there is no divesting provided under Section 24(2) of the 2013 Act, as once possession has been taken there is no lapse under Section 24(2).”

The Court further clarified that “The expression “paid” in the main part of Section 24(2) of the 2013 Act does not include a deposit of compensation in court.”

The court highlighted that the proviso to Section 24(2) only applies if compensation has not been deposited with respect to the majority of land holdings, in which case all beneficiaries are entitled to compensation as per the 2013 Act.

Key Takeaways

• Land acquisition proceedings do not lapse under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, if possession of the land has been taken, regardless of whether compensation has been paid.
• The word “or” in Section 24(2) should be interpreted as “nor” or “and.”
• The decision in Pune Municipal Corporation and Anr. Vs. Harakchand Misirimal Solanki and Ors., (2014) 3 SCC 183 has been overruled.
• The mode of taking possession under the Land Acquisition Act, 1894, is by drawing of an inquest report/memorandum.

Directions

The Supreme Court quashed and set aside the impugned judgment of the High Court and dismissed the original writ petition. The Court held that there shall not be any deemed lapse of the acquisition with respect to the land in question.

Development of Law

The ratio decidendi of this case is that for land acquisition proceedings to lapse under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, both possession must not have been taken and compensation must not have been paid. This decision clarifies the interpretation of Section 24(2) and overrules the previous position of law as stated in Pune Municipal Corporation.

Conclusion

The Supreme Court’s judgment in Union of India vs. Rajesh Kumar clarifies that land acquisition proceedings do not lapse under Section 24(2) of the Act, 2013, if possession has been taken, even if compensation has not been paid. This decision reinforces the interpretation of Section 24(2) as laid down by the Constitution Bench in Indore Development Authority, overruling the earlier position of law.