File Copyright Online - File mutual Divorce in Delhi - Online Legal Advice - Lawyers in India

Or To Be Read As And/Nor: How The Supreme Court Interpreted Lapse Of Land Acquisition Proceedings Under The New Act

The lacunae under Section 24(2) of the Land Acquisition Act, 2013 (hereinafter referred to as the 2013 Act) dealing with the lapse of land acquisition proceedings has finally been interpreted by the five-judge bench of the Hon'ble Supreme Court settling the number of land disputes in the courts.

Section 24(2) of the 2013 Act provides for the lapse of land acquisition proceedings initiated under the Land Acquisition Act, 1894 in cases where the award has been made five years or more prior to commencement of the 2013 Act but the physical possession has not been taken or the compensation has not been paid.

The section as interpreted in its literal sense caused a multitude of proceedings before the courts for the lapse of such proceedings that were initiated even decades ago causing loss to the government and the benevolent parties in such cases.

This Article tries to analyze the anomaly under Section 24(2) of the 2013 Act and how the Supreme Court has best interpreted the provisions without unduly moving into the legislative domain and balancing the scales in the interest of justice.

The Constitution of India originally provided for the Right to Property Under Article 31 which stated ' person shall be deprived of his property save by authority of law.' It also indicated that compensation would be paid to a person whose property has been taken for public purposes. However, this right was deleted by the forty-fourth Amendment to ease the land acquisition by the State. The right to property now stands only as a constitutional right and in the event of breach, the remedy can be availed under Article 226 and not under Article 32 to the Supreme Court.

The land acquisition proceedings and compensation in such events were dealt with under the Land Acquisition Act, 1894 (hereinafter referred to as the 1894 Act) which provided for compensation at the rate of market value in such cases. However, since acquisition under this act is of compulsory nature, it caused a hardships to people who felt unjustly deprived of their land and inadequately compensated for the same. Hence, the need was felt for the procedure of land acquisition to be more participative, transparent, and socially oriented keeping in mind the rights of those affected.

Hence, a new Act namely, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (hereinafter referred to as the 2013 Act) was enacted to regulate the procedure of land acquisition. The emphasis under the new act has been placed on the Social Impact Report before deciding on the issue of possession, provides for higher compensation, and also includes the provision for resettlement and rehabilitation of those affected.

Process Of Land Acquisition
The procedure of land acquisition proceedings as provided under the Land Acquisition Act, of 1894 is as follows:
  • A preliminary notification under Section 4 is published under the official gazette to the effect that any land is required for public purposes.
  • A public notice under Section 9(1) is required to be issued by the Collector informing of the government's intention of taking possession of the land and further stating that claims to any such land shall be made to him. Such notice shall state particulars of the land and require the persons interested in such land to personally appear before him, not before the expiry of 15 days to such notice, and state their interest and claim to compensation in such land.
  • The award under Section 11 has to be made with respect to such land within two years of publication of notification Section 11, and if the same is not made, the proceeding of land acquisition shall lapse. In case publication of declaration done before the commencement of the 1894 Act, the award shall be made within two years of such commencement.
  • Under Section 12, such award shall be filed in the collector's office and shall be final as conclusive evidence between the collector and the persons interested, whether they appeared before the collector or not. The collector shall give immediate notice of the award to the persons interested who were not present personally through their representatives.
  • After the making of award under Section 16, the government may take possession of such land which shall thereupon vest absolutely in the government without any encumbrances.
  • The collector is then required to tender the payment under Section 31 and pay the same unless prevented by any exigencies as mentioned under Section 31(2).
  • Section 31(2) states that if they do not consent or receive it, no competent person to alienate the land, dispute to title, or regarding apportionment of such compensation. In such case, the compensation shall be deposited in the Court to which a reference can be made under Section 18.
  • Section 18 provides that any person interested who has not accepted the award shall can a written application to the Collector, requiring that the matter be referred for determination of the Court. Provided that such application shall be made if the person was present at the time of making or award or was represented before the collector within 6 weeks of making such award. In other cases, within 6 weeks of the receipt of such notice under section 12, or within 6 months from the expiry of such award, whichever shall expire first.

Anomaly Under Section 24(2)
Section 24(2) of the 2013 Act provides for the lapse of land acquisition proceedings initiated under the Land Acquisition Act, 1894 in cases where the award has been made five years or more prior to commencement of the 2013 Act but the physical possession has not been taken or the compensation has not been paid.
The requirement under this section for the lapse of land acquisition proceedings is as such:
  • The award under Section 11 of the 1894 Act was made five years or more prior to the commencement of the Act.
  • The physical possession of the land not taken "or" the compensation in respect to such land not paid.
The Problems That Arose In The Interpretation Were:
  • Meaning of "compensation paid."
  • Meaning of "physical possession."
  • Lapse of proceedings in case "compensation paid" but possession not taken.
  • Lapse of proceedings in case "possession was taken" but compensation not paid.

Pune Municipal Corp. & Anr Vs Harakchand Misirimal Solanki [I]

The issue first came to be decided by a three-judge bench in the case of Pune Municipal Corp.& Anr vs Harakchand Misirimal Solanki, where the court analysed the meaning of compensation not paid and the lapse of proceedings under Section 24(2).

The present case relates to the acquisition of lands measuring 43.94 acres for the development of "Forest Garden" in Pune made under the 1894 Act in which the award for the same was made in the year 2008 in accordance with Section 11 of the aforementioned Act. The case of the Respondents- landowners was such that since the compensation was not paid nor the amount deposited in a Reference Court as per Section 31(2) of the 1894 Act, the land acquisition proceedings shall be deemed to have lapsed under the new Act.

On the other hand, it was argued on behalf of the Corporation that the amount of compensation was tendered, but since the landowners never received it nor made the case for it to be deposited in the Reference Court, the amount was duly deposited in a government treasury.

The Hon'ble Supreme Court relying on the decisions in Agnelo Santimano Fernandes[ii] and Prem Nath Kapur[iii] in which it was held that deposit in government treasury is of no avail, decided that the deposit of such amount in government treasury after the tendering of such payment to the landowners cannot be interpreted to mean compensation paid within the meaning of Section 24(2) of the 2013 Act.

Held: '�the legal fiction under Section 24(2) comes into operation as soon as the conditions namely:
  1. award made five years or more prior to the commencement of the 2013 Act
  2. compensation not paid or possession not taken, are satisfied and the proceedings in connection to such shall deem lapsed

Problems Under The Law Laid Down Under Pune Municipal Corp. Case
However, the order reported as Yogesh Neema vs. State of Madhya Pradesh[iv], a two-judge Bench, however, doubted the decision in Sree Balaji Nagara Residential Association vs. State of Tamil Nadu [v] (which had followed Pune Municipal Corporation (supra) and referred the decision to a larger Bench.

Later, in another appeal (arising out of S.L.P. (C) No.2131 of 2016 (Indore Development Authority v Shailendra (dead) through Lrs. & Ors.4) the matter was referred to a larger Bench on 7.12.2017; the Court noticed that:
'�cases which have been concluded are being revived. In spite of not accepting the compensation deliberately and statements are made in the Court that they do not want to receive the compensation at any cost, and they are agitating the matter time (2014) 3 SCC 183 2 (2016) 6 SCC 387 3 (2015) 3 SCC 353 4 2018 SCC Online SC 100 and again after having lost the matters and when proceedings are kept pending by interim orders by filing successive petitions, the provisions of section 24 cannot be invoked by such landowners�'

The Court also felt that there were several other issues that were outlined that were not dealt with in Pune Municipal Corporation and hence the matter came to be referred to a larger Bench.

Indore Development Authority V. Manoharlal And Others [Vi] Or To Be Read As Nor/And
Under section 24(2) of the 2013 Act, the land acquisition proceedings shall lapse after five years or more of the making of the award in case, possession has not been taken or compensation is not paid.

Section 16 of the 1894 Act states that once an award under Section 11 has been made by the Collector, the possession of the land can be taken which shall thereupon lie absolutely with the Government, free from all encumbrances. In case, the word "or" under Section 24(2) is given literal interpretation, the proceedings shall lapse in any case where the possession has been taken and the land vests in the government for the reason that compensation is not paid.

In this case, extreme hardship can be caused to the governments where development activities have already been undertaken and may lead to project derailment, contrary to the larger public interest.

There are cases where compensation has been made but the possession of land has not been taken for one reason or another for no fault of authorities. In case possession is with the landowner and the compensation has been paid, according to the landowner's submission, there is deemed a lapse under Section 24(2) by reading the word "or" disjunctively. Since there is no provision for a refund of compensation under the new Act, the landowners will be unjustly enriched.

Hence, it is decided that the word "or" used in Section 24(2) between possession and compensation has to 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 the authorities for five years or more prior to commencement of the said Act, the possession of land has not been taken nor compensation been paid.

In other words, in case possession has been taken, compensation has not been paid then there is no lapse. The landowners however in such cases will be entitled to enhanced compensation as per the 2013 Act. Similarly, if compensation has been paid, and possession has not been taken then there is no lapse.

Possession And Mode Thereof
According to Section 16 of the 1894 Act, after award under Section 11 is made the government is free to take possession of land and such land shall thereupon vest with the government without any encumbrances. When such possession is taken and the memorandum in such respect is drawn, it amounts to the taking of physical possession of the land. Any person entering such land is deemed a trespasser.

However, since Section 24(2) mentions the taking of "physical possession" it has been blatantly misused. There is a fresh bout of litigation started by erstwhile owners even after having received the compensation in many cases by submitting that possession has not been taken and drawing of possession is illegal and they are in physical possession. As such, there is a lapse of proceedings.

The government cannot be expected to put some person or police force on such land in order to retain it for that would be unnecessary and impractical. It is thus held that the mode of taking possession under the 1894 Act and as contemplated under Section 24(2) is by drawing of inquest memorandum /report. Once an award has been passed on taking possession under Section 16 of the 1894 Act, the land vests in the State and there is no divesting procedure under Section 24(2) of the 2013 Act, as once possession has been taken there is no lapse under Section 24(2).

Meaning Of Payment Under Section 24(2)
The meaning of payment as read under section 24(2) is to be equated with tendered and once the amount has been duly offered for payment, the obligation to make payment is complete and the landowners cannot claim the benefit of section 24(2) for default on their own part for not receiving the payment.

In case, the Collector has been prevented from making payment due to exigencies mentioned under Section 31(2), the amount shall be deposited in a court. In default of the deposit of the amount in court, the remedy as provided under the 1894 Act is higher interest as per Section 34.

However, it is decided that acquisition proceedings cannot lapse for such non-deposit and the obligation to make the payment is complete when the amount is made available to the landowner for such payment.

The landowners who refuse such compensation or who sought higher compensation cannot claim the benefit under Section 24(2) and claim that the land acquisition proceedings have lapsed on account of such non-payment.

Stale Claims Barred
It was seen that proceedings that were concluded years ago were being filed in the garb of the 2013 Act to claim the benefit of Section 24(2) and cause the lapse of such acquisition proceedings.

The Hon'ble Supreme Court in response held:
'�Section 24(2) of the 2013 Act does not give rise to a new cause of action to question the legality of concluded proceedings of land acquisition. Section 24 applies to a proceeding pending on the date of enforcement of the 2013 Act i.e. 1-1-2014. It does not revive stale and time-barred claims and does not reopen concluded proceedings nor allow landowners to question the legality of the mode of taking possession to reopen proceedings or mode of deposit of compensation in the treasury instead of court to invalidate acquisition...'

The judgment in the Indore Development Authority[supra] is a great example of how the judiciary has interpreted the law under Section 24(2) without entrenching into the legislative domain and has balanced the rights of the affected landowners vis-a-vis the State.

The Hon'ble Supreme Court has extended the right to enhanced compensation to the landowners in cases where possession has been taken but the compensation remains pending while also interpreting Section 24(2) in a way that lapse of proceedings in the case shall not cause any wrongful loss to the government or unjust enrichment to the landowners.

  1. (2014) 3 SCC 183
  2. (2011) 11 SCC 506
  3. (1996) 2 SCC 71
  4. (2016) 6 SCC 387
  5. (2015) 3 SCC 353
  6. (2020) 8 SCC 129

Award Winning Article Is Written By: Ms.Sakshi Aggarwal
Awarded certificate of Excellence
Authentication No: NV331206393336-8-1123

Law Article in India

Ask A Lawyers

You May Like

Legal Question & Answers

Lawyers in India - Search By City

Copyright Filing
Online Copyright Registration


How To File For Mutual Divorce In Delhi


How To File For Mutual Divorce In Delhi Mutual Consent Divorce is the Simplest Way to Obtain a D...

Increased Age For Girls Marriage


It is hoped that the Prohibition of Child Marriage (Amendment) Bill, 2021, which intends to inc...

Facade of Social Media


One may very easily get absorbed in the lives of others as one scrolls through a Facebook news ...

Section 482 CrPc - Quashing Of FIR: Guid...


The Inherent power under Section 482 in The Code Of Criminal Procedure, 1973 (37th Chapter of t...

The Uniform Civil Code (UCC) in India: A...


The Uniform Civil Code (UCC) is a concept that proposes the unification of personal laws across...

Role Of Artificial Intelligence In Legal...


Artificial intelligence (AI) is revolutionizing various sectors of the economy, and the legal i...

Lawyers Registration
Lawyers Membership - Get Clients Online

File caveat In Supreme Court Instantly