Judgement Summary, Uncategorized

Indore Development Authority v Manoharlal & Ors

 

Coram-

Arun Mishra J., Indira Banerjee J. Vineet Saran J. M.R. Shah J., S. Ravindra Bhatt J.

Subject matter of the present case –

Land Acquisition, Rehabilitation and Resettlement Act, 2013 (for short, ‘the Act of 2013’) was enacted in 2013 supressing all previous acts on and acquisition and the S. 24 of the act deals with Right to Fair Compensation. Sometimes it so happens that the land is acquired but people don’t accept compensation because they feel they have not received a fair amount. This is very common in mining areas. Now question before the court was if people did not accept compensation, then would the land be considered as acquired?

Back ground –

  • Pune Municipal Corporation & Anr v Harakchand Misrimal Solanki & Ors (2014) 3 SCC 183 had first interpreted S. 24 of the Act. In the said case, the land owner did not agree with the quantum of the compensation amount. So Government deposited the money in its own treasury instead with the court. The court held, depositing money in its own treasury did not amount to grant of compensation and hence the land acquisition proceedings were annulled as per the S. 24 of the Act, 2013. ( this land acquisition-compensation was prior to the enactment of the act of 2013. S. 24 of the act says, if the compensation was granted five years prior to the enactment of act but the physical possession of the and was not taken or compensation was not paid, then the land acquisition process was deemed to have annulled).
  • Sree Balaji Nagar Residents Association v State of Tamil Nadu (2015) 3 SCC 353 referred the decision of pune Municipal Corporation. So Pune Municipal Corporation  judgement was stare decisis.
  • But Yogesh Neema & Ors v State of Madhya Pradesh (2016) 6 SCC 387 doubted the correctness of Sree Balajai Residents Association. Yogesh Neema was a two judge bench. So it could not overcome the judgement of Pune Municipal Corporation.  So Yogesh Neema made a comment that Pune Municipal Corporation  had not considered whether a period of stay granted by a court during the land acquisition process would be excluded or included while calculating the time period prescribed under S. 24 of the LARR Act 2013. Hence, it referred to a higher bench.
  • In the mean while Indore Development Authority v Sailendra 2018 SCC Online SC 100 came before the court by way of a SLP and the court held that land acquisitions could not lapse due to a land-owner’s refusal to accept compensation within 5 years. It held that once compensation has been tendered, but the person refuses to accept it, this amounts to a discharge of obligation under section 31(1) of the Land Acquisition Act, 1894. In addition, the majority judges – Justices Mishra and AK Goel held the previous 2014 Pune Municipal Corporation judgment to be ‘per incuriam’, while Justice Shantanagoudar dissented. But issue was can a 3 judge bench set aside the judgment of a coordinate bench? This case was decided on 8th February.
  • When a similar land acquisition matter came up before a 3 judge Bench on 21 February, 2018 in Haryana v. GD Goenka Tourism Corporation, Jutices Madan Lokur and Kurian Joseph raised judicial impropriety concerns.
  • Hence, constitution bench was formed to decide the judicial propriety of the Indore Development Authority v Shailendra judgement. Another controversy arose at this time demanding that Arun Mishra Should not be made a judge in the constitution bench because he was a member of the Indore Development Authority v Shailendra and hence suffered from a previous bias. Ideally, he should have recused himself. But he did not recuse himself from the constitution bench.
  • There were five questions before the constitution bench –
    • What is the meaning of the expression paid’/tender’ in Section 24 the LARR Act 2013 or S. 31 of the old Act of 1894?
      • Whether non-deposition of compensation amount in the court leads to lapse of the land acquisition process as per S. 24(2) of the new Act?
      • What is the consequence if the compensation was granted but not accepted by the land owners?
      • Whether after refusal of the compensation, the land owners can stall the land acquisition process on the ground that they had not received fair compensation?
      • How the word “or” in S. 24(2) should be read? Conjunctively or disjunctively?
    • Whether the proviso inserted below S. 24(2) is a proviso to S. 24(2) or a proviso to S. 24 as a whole
    • What is the mode of taking possession under the Act?
    • Whether the period covered by an interim order of a Court concerning land acquisition proceedings ought to be excluded for the purpose of applicability of Section 24(2) of the Act of 2013?
    • Whether Section 24 of the Act of 2013 revives barred and stale claims? In addition, question of per incuriam and other incidental questions also to be gone into.
  • Questions a, b, c are interconnected and related to proper understanding of  the S. 24(2) of the LARR Act, 2013. Hence, it is important to reproduce the statute.

(2) 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 section 11 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 bench formed further questions to understand the S. 24(2) of the Act, 2013.
  • Whether the word “or” in Section 24(2) of the Act of 2013 used in between possession has not been taken or compensation has not been paid to be read as “and”? Whether proviso to Section 24(2) of the Act of 2013 has to be construed as part thereof or proviso to Section 24(1)(b)?
  • What meaning is to be given to the word “paid” used in Section 24(2) and “deposited” used in the proviso to Section 24(2)?
  • What are the consequences of payment not made? (v) What are the consequences of the amount not deposited?
  • What is the effect of a person refusing to accept the compensation?
  • Before the Act of 2013 was made, the land acquisition process was covered under Land Acquisition Act, 1894. The Act of 2013 is prospective in nature and saves the proceedings already initiated under the old act subjected to provision of S. 24 of the act of 2013. The S. 24 starts with a non-obstante clause and overrides all other provisions of the act of 2013.
  • Argument on behalf of the state-
  • the ratio in Pune Municipal Corporation (supra) and other judgments which followed it, contended that the Court did not consider the various interpretations of Section 31 of the (repealed) Land Acquisition Act because the provisions of the Act of 2013, vis-à-vis the timelines and consequences that would ensue if the acquisition proceeding prolongs, were not examined.
  • Section 24 is a transitional provision and such provisions should be given an interpretation which accords with legislative intent and not as per provisions of old act
  • Section 24 (1) (a) contemplates that where no award under Section 11 of the LA Act has been made, but proceedings had been initiated under said Act, provisions of the Act of 2013 would apply limited to the determination of compensation. In other words, the entire exercise de novo, under the Act of 2013, will not be required to be undertaken. Therefore, Section 24 (1) (a) contemplates a limited applicability of the Act of 2013
  • Section 24 (1) (b) stipulates that where an award under Section 11 of the old Act has been made, the entire proceedings would continue under that law and the provisions of the Act of 2013 would be inapplicable.
  • contingencies for lapsing in Section 24(2), are subject to an award under Section 11 of the old Act being made five years prior to the commencement of the Act of 2013. If the award is so made, two contingencies result in complete lapse -: (a) Physical possession of the land has not been taken; or (b) compensation has not been “paid”. The “contingencies” ought to be interpreted in a manner which saves the past transactions to the extent they can be saved as it is clearly not the intention of the Act of 2013 to tide over all past transactions.
  • proviso to Section 24(2) further carves out an exception to Section 24(2) viz, in case the award has been made and compensation in respect of majority of landholdings has not been deposited in the account of the beneficiaries, no lapsing will take place, but all the beneficiaries specified in the notification for acquisition shall be entitled to compensation in accordance with the provisions of the Act of 2013. Therefore, if only a minority of the claimants are disbursed with the compensation, such claimants would get benefit of compensation under the Act of 2013 to a limited extent without lapsing. Thus, it is clear that even if the acquisition does not lapse, all the beneficiaries to whom the compensation is payable would be entitled to compensation under the Act of 2013.
  • Therefore, if only a minority of the claimants are disbursed with the compensation, such claimants would get benefit of compensation under the Act of 2013 to a limited extent without lapsing. Thus, it is clear that even if the acquisition does not lapse, all the beneficiaries to whom the compensation is payable would be entitled to compensation under the Act of 2013.
  • There is a lot of balancing act in the S. 24 of the LARR Act. The new act is prospective in application but it also believes that people should get better compensation as per the new act. Hence by inclusion of proviso to S. 24(2) the act makes provision that even if an action was contemplated earlier than 2013, compensation as per 2013 could be provided.
  • during the drafting of the Bill, the legislative intent and the apprehensions of the stakeholders in the acquisition process is clearly depicted in 31st Report of the ‘Standing Committee on Rural Development’ while discussing the ‘The Land Acquisition, Rehabilitation and Resettlement Bill, 2011’ which was the precursor to the Act of 2013.
  • In Pune Municipal Corporation case and Sree Balaji Nagar Residential Associsation  case, the word “or” in S. 24 of the Act was understood disjunctively. [but the physical possession of the land has not been taken or the compensation has not been paid- the court interpreted that if either one of the conditions is satisfied the proceeding of land acquisition will lapse]. But the government contended that the word has to be red “conjunctively”.  [ the govt. argued, if both conditions are satisfied then only the land acquisition process will end].
  • Pune Municipal Corporation understood “pad” in a literal manner. But govt. argued that  before the Act of 2013 was brought into force, the modes of payment recognized by the law were: tendering payment, payment into court in the event no one entitled to alienate the property received it and payment into court upon disputes about the entitlement to receive payment. These three situations were visualized in Section 31 (2) of the old Act. the consequence of lapse of acquisition was never contemplated, in the event of refusal to accept payment, or absence of anyone entitled to receive it, or in the contingency of a dispute regarding entitlement to receive the amount.
  • This clearly meant that while payment of compensation was essential and mandatory, the mode of payment was not mandatory. If, for instance, the amount was tendered and not received, but instead, the landowner refused it, the appropriate government could well deposit it in the treasury, in accordance with prevailing financial rules, to facilitate disbursement, as and when the landowner or the one entitled to receive it, came forward and established entitlement.
  • The purpose and object of making provision of S 24 is to balance the competing rights of public projects vis-à-vis holders of the land. The object and purpose was to ensure that where acquisition proceedings under old Act have reached an advanced stage and investment of public money had already been made, firstly, the lapsing of such ongoing projects should be avoided and secondly as far as possible, the land owners also can, without disturbing the process of acquisition, be given the compensation under the Act of 2013
  • the legislature knows about the ground realities faced in land acquisition proceedings. There are very few cases where one or two land parcels are acquired in isolation. Mostly, acquisitions take place of bigger tracts of land involving more than one parcel of land and more than one person “entitled to compensation”. When Parliament provided for a transitory provision in relation to acquisitions under the old Act, it did not contemplate the possibility of the entire payment procedure to all being not processed given the practical situations arising in all such proceedings. Parliament is also presumed to be aware of the fact that in almost all cases of acquisition, the proceedings are stiffly opposed and in most of the cases, the tender of compensation is also opposed under a wrong and misplaced notion that the acceptance of the tender may be treated as acquiescence with the quantum being tendered.
  • Parliament did not expect the acquiring authority to perform an impossible task of forcing payment to the land owners unwilling, for any reason to accept it. The legislature, therefore, does not use the expression of the land owners having “accepted” the payment. It merely uses the expression “paid”. The legislature clearly tries to balance the rights of land owners only in one contingency viz. in a post award scenario and the award having been made five years prior to 1.1.2014, when the amount is not “deposited” in the accounts of the majority of the beneficiaries. The words “paid” and “deposit” are expressions of the same act namely making the amount available (i.e. tendering) for being taken by those entitled to it.
  • The only way in which the object behind section 24 can be achieved is to give natural meaning to the words and expressions used keeping the object in mind and treating the words “paid” and “deposit” as connoting expression of the very same Act depending upon the fact situation in each case. Not treating “paid” and “deposit” as synonymous or the “deposit” so as to keep it available being the next step after “pay”, would lead to disastrous situations as the acquiring authority may have acquired vast tract of land and may have put substantial portion from it to public use by constructing infrastructural projects. Such a disastrous situation /consequence would never have been anticipated or envisaged by the legislature.
  • Pune Municipal Corporation  held that deposited in treasury does not mean compensation has been paid. That means the court differentiated between deposited and paid.
  • Arguments of behalf of the land owners –
    • The old act suffered a lot of litigation. In order to prevent the prolonged litigation the act of 2013 was made
    • Act of 2013 is a beneficial legislation. And hence its provisions are to be understood in a broad manner.
    • Section 24 constitutes an exception to the general rule, i.e., lapsing of all acquisition proceedings, by reason of repeal of the Act of 1894, and operation of Section 114. Therefore, Section 24 has to be given effect to strictly, given that Parliamentary intent was to ensure that acquisition proceedings did not result in oppression and hardship.
    • State cannot be – in the event of non-acceptance of the compensation by the land owner or its inability to locate the land owner or in the event of a dispute – keep the compensation amount with itself and claim it to be part of same general treasury amount and proceed to utilise it as held in Ivo Agnelo Santimano Fernandes v. State of Goa
    • S. 24 of the LARR Act, 2013 covers three broad issues
Situation Effect as per LARR Act
cases where the land acquisition process shall be deemed to have lapsed   covered by Section 24(2). The two conditions to be fulfilled as on 1.1.2014 to trigger the deeming provision into operation are firstly, there must be an award under section 11 of the 1894 Act which has been made five years or more prior to the commencement of the Act of 2013 and secondly either physical possession of the land has not been taken from the landowner or compensation had not been paid as required under the Act of 1894.      
cases where the landholders are entitled to compensation in accordance with the provisions of the Act of 2013;   covered under Section 24(1) and the proviso to Section 24. Section 24(1) provides that where proceedings have not reached the stage of an award under section 11 of the 1894 Act, the provisions to determine compensation under the Act of 2013 apply. Further, the proviso to Section 24 provides for compensation in terms of the Act of 2013 where the following conditions are fulfilled, firstly an award has been made under section 11 of the 1894 Act; and secondly, compensation in respect of the majority of the land holdings has not been paid to the landowners  
cases where the land acquisition proceedings continue under the 1894 Act as if it had not been repealed   covered by section 24(1)(b) and to which neither section 24 (2) nor the proviso applies. This covers situations where though an award has been passed five years prior to the commencement of the Act, neither of the conditions for deemed lapsing are present. f the Act of 1894 will continue to apply without any benefit in terms of increased compensation where an award is passed within 5 years of the commencement of the Act of 2013 but the majority of landholders have been paid    
  • Rule of interpretation of statute is to be used to interpret S. 24 of the act
    • Court should  interpret statutory provisions literally
    • the rule of purposive interpretation was to be used, having regard to the object of the enactment, the purpose of the law in seeking to correct historical injustices and the legislative intent to confer the benefit of the Act of 2013
    • the rule of harmonious interpretation should be used  such that all words of the provision are given effect and no part of the provision is rendered otiose
    • contemporaneous understanding of administrators responsible for implementing a new law should be taken into consideration
    • In case of ambiguity, the statute should be so interpreted that it favours the citizen (Pratap Singh vs. State of Jharkhand (2005) 3 SCC 551 (5 Judges)
  • The words “paid” and “deposited” mean differently and depisted in the treasury did not mean the beneficiaries had received the sum
    • there is no valid reason to exclude from the period of 5 years under section 24(2), the time during which a landowner had the benefit of an interim order of a court.
    • Section 24(2) uses the expression “or”. The Legislature intended the two conditions separated by the word “or” to be alternative conditions. Four situations arise where the conditions are disjunctive: firstly, when physical possession is with the State and compensation is with the citizen, there is no deemed lapse; secondly, when physical possession is with the citizen and compensation is with the State, there is no need for restitution as the State has retained the compensation amount; thirdly, when physical possession is with the citizen, and the compensation is also with the citizen, in such scenarios, the citizen must return the compensation. It was urged that where the State has paid the money by deposit in the Reference Court and the money was lying with the Court, the State may withdraw the money on deemed lapsing. However, if the State were to decide to acquire the land afresh, the compensation already paid may be adjusted; and further since inherent in the notion of lapsing is the requirement for restitution, the State can recover the compensation, inter alia by framing suitable rules. The citizen cannot retain compensation “had and received” since this would amount to unjust enrichment. Section 24(2) would become discriminatory if “or” is read as “and
    • there are no vested rights created in the State in any case till compensation has been paid and possession has been taken.

Similarly, a number of arguments are made from the counsel from the and holders side. These arguments are not very important. Only important arguments are already mentioned.

Salient features of the act of 2013

  1. Act of 2013 is a beneficial legislation. It aims to provide fair compensation on the event of land acquisition
  2. The Objects and Reasons of the act addresses concerns of farmers and those whose livelihood are dependent on the land being acquired, while at the same time facilitating land acquisition for industrialization, infrastructure and urbanization projects in a timely and transparent manner. (A National Policy on Resettlement and Rehabilitation for Project Affected Families was formulated in 2003, which came into force with effect from February 2004, which provided a lot of input to enactment of the act of 2013)
  3. The law would apply when Government acquires land for its own use, hold and control, or with the ultimate purpose to transfer it for the use of private companies for stated public purpose or for immediate and declared use by private companies for public purpose.
  4. Only rehabilitation and resettlement provisions will apply when private companies buy land for a project, more than 100 acres in rural areas, or more than 50 acres in urban areas
  5. It has also been ensured that consent of at least 80 per cent of the project affected families is to be obtained through a prior informed process.
  6. To ensure food security, multi-crop irrigated land shall be acquired only as a last resort measure. An equivalent area of culturable wasteland shall be developed if multi-crop land is acquired. In districts where net sown area is less than 50 per cent of total geographical area, no more than 10 per cent of the net sown area of the district will be acquired.
  7. Solatium will also be increased upto 100 per cent of the total compensation. Where land is acquired for urbanization, 20 per cent of the developed land will be offered to the affected land owners
  8. Special provisions for Scheduled Castes and the Scheduled Tribes have been envisaged by providing additional benefits of 2.5 acres of land or extent of land lost to each affected family; one-time financial assistance of Rs. 50,000/-; twenty-five per cent additional rehabilitation and resettlement benefits for the families settled outside the district; free land for community and social gathering and continuation of reservation in the resettlement area, etc
  9. A Social Impact Assessment (SIA) of proposals leading to displacement of people through a participatory, informed and transparent process involving all stake-holders, including the affected persons will be necessary before these are acted upon. Section 40 deals with urgent cases. The Government may acquire land without making award in the case of urgency for the defence of India or national security. In other emergencies arising out of natural calamities or any other emergencies special provisions under Section 40 may be exercised with the approval of the Parliament. In such event, the provisions of the Social Impact Assessment and Rehabilitation and Resettlement Scheme may be exempted
  10. Section 101 provides that land be returned to the original owner or the Land Bank of the appropriate Government if acquired land remains unutilized for a period of five years.
  11. Undoubtedly the Act of 2013 has provided safeguards, in the form of higher compensation and provisions for rehabilitation, which are necessary. In that light, the court has to interpret its provisions, to give full and meaningful effect to the legislative intent keeping in mind the language and tenor of the provisions.

Scope of S. 24 of the Act of 2013

  1. Section 24 begins with a non-obstante clause, overriding all other provisions of the Act of 2013 including Section 114 of the Act of 2013, dealing with repeal and saving
  2. In terms of Section 114 of the Act of 2013, the general application of Section 6 of the General Clauses Act, 1897, except otherwise provided in the Act, has been saved
  3. Section 6(a) of the General Clauses Act, 1897 provides that unless a different intention appears, the repeal shall not revive anything not in force or existing at the time when the repeal has been made
  4. Section 24(1)(a) of the Act of 2013 read with the non-obstante clause provides that in case of proceedings initiated under the Act of 1894 the award had not been made under Section 11, then the provisions of the Act of 2013, relating to the determination of compensation would apply. However; the proceedings held earlier do not lapse. This means the proceeding intiaited under Act of 1894 remains valid but the compensation will be counted as per the act of 2013. The S. 24 starts with a non obstnte clause hence, anything otherwise mentioned in the act is not applicable.
  5. Section 24(2) carves out an exception to Section 24(1)(b), where the award has been passed, and the proceedings are pending, but in such proceedings, physical possession of the land has not been taken, or compensation has not been paid, proceedings shall lapse. Therea re two requirements for the lapse- (i) phyicial possession has not been taken and (ii) compensation has not been paid. 
  6. In Patel Chunibhai Dajibha, etc. vs. Narayanrao Khanderao Jambekar and Anr AIR 1965 SC 1457 it was held that, when the word “or” is present between two negative statements it is equivalent to “and “ and should be read as “nor”.
  7. In The Punjab Produce and Trading Co. Ltd. vs. The C.I.T., West Bengal, Calcutta 1971 (2)  SCC 540 it was held that when the word “or” joins two negative statements it should mean as “and”.
  8. In Brown & Co. v. Harrison (1927) All ER Rep 195 pp. 203, 204 (CA) it was held words “or” can be meant in conjunctive sense and certainly where the disjunctive use of the word, leads to repugnance or absurdity
  9. In M/s. Ranchhoddas Atmaram and Anr. v. The Union of India and Ors. AIR 1961 SC 935  a Constitution Bench of this Court observed that if there are two negative conditions, the expression “or” has to be read as conjunctive and conditions of both the clauses must be fulfilled
  10. Same principle was upheld in Prof. Yashpal & Ors. v. State of Chhattisgarh & Ors (2005) 5 SCC 420
  11. On the other hand, in Joint Director of Mines Safety v. Tandur and Nayandgi Stone Quarries (P) Ltd (1987) 3 SCC 308, the word “and” was used disjunctively considering the legislative intent. In Green v. Premier Glynrhonwy State Co. L.R (1928) 1 KB 561 it has been laid down that sometimes word “or” read as “and” and vice versa, but does not do so unless it becomes necessary because “or” does not generally mean “and” and “and” does not generally mean “or”
  12.  So it is clear that the actual meaning of the word “or” depends on the context. The court needs to interpret keeping the overall meaning and legisltiave intent into consideration.
  1. The court interpreted S. 24 to be a penal provision inteneding to penalize the land avquriing authority for unnecessary delay in and acquisition i.e. not taking possession of the land nor giving compensation even after the award was made five years before the commencement of the act
  1. The section 24 also says, in those cases the proceeding made under old act, which were pending as on the commencement of the new act, would remain operative.
  1. Even if possession has been taken, despite which payment has not been made nor deposited, (for the majority of the land-holdings), then all beneficiaries holding land on the date of notification under Section 4 of the Act of 1894, are to be paid compensation under the provisions of the Act of 2013.
  2. The expression “possession of the land has not been taken” or “compensation has not been paid” indicates a failure on the part of the authorities to take the necessary steps for five years or more in a pending proceeding
  3. Section 24(2) starts with a non-obstante clause overriding what is contained in Section 24(1). Thus, Section 24(2) has to be read as an exception to Section 24(1)(b) [ No logic was given by the court]
  4. Similarly, the proviso has to be read as a proviso to Section 24(2) [No logic was given by the court]
  5. Section 24(2) of the Act of 2013 deals with a situation only where the award has been made 5 years or more before the commencement of the Act, but physical possession of the land has not been taken, nor compensation has been paid. In this sitatuion the the process of land acquisition lapses. In such a situation if the word “or” is read disjunctively, it will mean that even if the possession was taken, then also the proceeding may lapse. This is an absurd proposition. It is because if land is vested with the government, a lot of development work for publc purposes aready starts. At this time cancelling the land acquisition process creates difficuites for the government.
  6. The expressions used in Section 24(2) “possession of the land has not been taken” and “the compensation has not been paid” are unrelated and carry different consequences. These are mutually eclusive conditions.
  7. Sec. 24 (2) of the Act is an exeption to Sec. 24(1) of the act. It may be understood that Sec 24(1) starts with a non obstante clause and refers to a scenario where possession has not been taken nor compensation has been paid. S. 24(2) as an exception to s. 24(1) deals with the situation where possession ahs been taken but compensatin has not been paid.  Because of the points mentioned in above (in 19), in case possession has been taken there cannot be any withdrawal for land acquisition process.
  8. The judgement also shows how the word “or”, if interpreted disjunctively, may give rise to an anomalous situation.
    1. because, once compensation has been paid to the landowner, there is no provision for its refund
    1. In case possession is with the landowner and compensation has been paid, according to landowners’ submission, there is deemed lapse under Section 24(2) by reading the word “or” disjunctively. It would then be open to the State Government to withdraw the money deposited in the Reference Court.
    1. It was also submitted that it is inherent in the notion of lapse that the State may recover the compensation on the ground of restitution
    1. In case physical possession is with the landowner; and compensation has been paid, there is no provision in the Act for disgorging out the benefit of compensation
    1. In the absence of any provision for refund in the Act of 2013, the State cannot recover compensation paid
    1. The landowner would be unjustly enriched
    1. This could never have been the legislative intent of enacting Section 24(2) of the Act of 2013.
    1. The absence of provision for refund in the Act of 2013 reinforces the conclusion that the word “or” has to be read as conjunctively and has to be read as “and.”
  9. The following is a very important paragraph quoted from the judgment itself:

“In the case State had taken possession without paying compensation as required under the Act of 1894, there cannot be absolute vesting free from all encumbrances under Section 16. It is clear that vesting under Section 16 of the Act of 1894 does not depend upon payment of compensation. Vesting takes place as soon as possession is taken after the passing of the award. Undoubtedly, compensation has also to be paid. For that, provisions have been made in Sections 31 and 34 of the Act of 1894. Section 31(1) requires tender and payment, which is making the money available to the landowner and in case State is prevented: i.e., in case the landowner does not consent to receive it for three other exigencies provided in Section 31(2), the amount has to be deposited in the court. Deposit in the court absolves the Government of liability to make payment of interest. However, if payment is not tendered under Section 31(1) nor deposited in court as envisaged under Section 31(2) from the date of taking possession, the interest for the first year is 9% and thereafter 15% per annum follows. The effect of vesting, under no circumstance, is taken away due to non-compliance of Section 31(1) or 31(2) as the case may be as the payment is secured along with interest under the provisions of Section 34 read with Section 31. The State cannot be asked to restore possession once taken but in case it fails to make deposit under Section 31(3) or otherwise with respect to majority of the landholdings, in that exigency, all the beneficiaries as on the date of notification under Section 4 shall be entitled to higher compensation under the Act of 2013 and there would be no lapse in that case

  • The Collector has to tender payment under Section 77(1) of the act of 2013 and to pay the persons interested by depositing the amount in their bank accounts unless prevented under Section 77(2) of the act. ( there are certain contingencies mentioned in the sec. 77 (2))
  • There is provision for interest for delay in payment of the compensation. The award amount has to be paid @ 9% per annum for the first year and after that @ 15% per annum in the new act also. If the land owners are not interested to take the payment, the collector can deposit the amount in the reference court. The land owners would be eligible to get the value of the compensation as well as the interest accrued from it.
  •  So the court held the following-
    • Once land is acquired by the Government, it has to pay compensation amount to the landholders
    • If compensation amount is not received by the land holders, the money to be deposited with a court. Land holders are eligible to get interest money also
    • If compensation amount for majority of land holders is not paid as per 1894 act, then all will be paid as per 2013 act
    • State cannot be asked to restore possession of the land once taken.

Vesting and divesting

  1. Satendra Prasad Jain & Ors. v. State of U.P & Ors (1993) 4 SCC 369 discusses the concept of vesting and divesting with respect to the 1894 Act. It says

Once possession has been taken under Section 17(1) of the act, prior to the making of the award, the owner is divested of the title to the land, which is vested in the Government and there is no provision by which land can be reverted to the owner. ( S. 17(1) talks about emergency acquisition before the award)

  • Tika Ram and Ors. v. State of Uttar Pradesh (2009) 10 SCC 689 considered the question what will happen if possession was taken but compensation was not paid? The  court held that even if majority of people have not received compensation ( 80% of people have not received compensation) then also the acquisition will not suffer.
  • In Pratap & Anr. v. State of Rajasthan & Ors (1996) 3 SCC 1 the court held that in case of emergency acquisition under S. 17(1) of the old act ( 1894 act), the land is vested with the government without any encumbrances and government cannot withdraw from the acquisition.
  • In P. Chinnanna & Ors. v. State of A.P. & Ors  (1994) 5 SCC 486  question again arose with respect to possession taken under Section 17(1) invoking urgency clause, this Court has held that once possession is taken, there is absolute vesting and subsequent proceedings were void.
  • All the judgements above shows :- once land vests in the state, it cannot be divested, even if there is some irregularity in the acquisition process.
  • S. 24(2) of the new Act ( 2013 Act) is a legal fiction because it has a lapsing clause. The court held it cannot be used to denude title which is already vested in the beneficiaries of acquisition and who in turn have also conveyed title and transferred the land to some other party after development. For example, an Urban Development Authority acquires land, hands over to a builder for erecting apartment and then the Urban Development Authority sells the apartment to war widows at a lower price. Now if there is some irregularity in the land acquisition process especially with respect to non payment of compensation amount, then whole land acquisition process should not be allowed to suffer. Because if land acquisition process is made irregular then, what will happen to the investment already made there ? Hence, the lapsing clause ( a legal fiction ) should not be allowed to extend beyond legal propriety. ( Commissioner of Sales Tax, UP v Modi Sugar Mills 1961 (2) SCR 189.)
  • Once the land is vested in the Government and Government takes possession of the land, who ever still remains there becomes a trespasser.  (
    The Fruit & Vegetable Merchants Union v. The Delhi Improvement Trust 1957 SCR 1).

Vested rights under Act of 2013

  1. The act does not take away the vested right of land enjoyed by the State after acquisition. The act does not intend divesting. The reason is as follows.
    1. When an old act is repealed and a new act is enacted, the s. 6 of General Clauses Act ( it talks about the effect of repeal) has to be read very carefully w.r.t. the new act to see whether the rights and liabilities in the old act are kept alive in the new act. Hence legislative intent of the new act needs to be understood.
    1. S. 24(2) which talks about lapse of proceeding has retrospective operation with respect to the acquisition made under 1894 Act and which are not completed by taking possession nor payment of compensation in spite of lapse of 5 years BECAUSE OF LETHARGY ON THE GOVERNENT.
    1. Now as the statute provides for retrospective operation, the legislative intent has to be understood clearly. ( K.s. paripoornan case)
    1. During the debate in the Loksabha, the minister has said that,

“if the award has been passed and no compensation has been given and no

physical possession has been taken the new law will be applicable.” So the legislative intent is that if award is passed but neither compensation given nor physical possession taken then S. 24(2) will operate and the proceeding will lapse.  (The legislative intent to interpret the word “or” as “and”)

Hence, once possession is taken then there cannot be any statutory provision to divest the state of the possession and nullify the preceding

  • The court then tried to understand whether the proviso inserted below S. 24(2) is a proviso to S. 24(2) or a proviso s. 24 itself. The reason given by the court is as follows-
    • in Delhi Metro Rail Corporation Ltd. v. Tarun Pal Singh & Ors., (2018) 14 SCC 161 the court held that the proviso should be read as part of section 24(2) of the Act of 2013, cannot be construed as proviso to section 24(1)(b) but in  Delhi Development Authority v. Virender Lal Bahri & Ors. a different view has been taken while referring the matter, and it has been observed that it should be treated as a proviso to section 24(1)(b) and not to section 24(2).
    • In both the cases the question about the meaning of the word “or” was not discussed. But in the present case, the word “or” appearing in S. 24(2) has been interpreted as “And”. Hence, any interpretation about the proviso has to be made keeping in view of the meaning given to the word “or”. This is called purposive interpretation.
    • when “or” is read conjunctively, section 24(2) provided for lapse in a case where possession has not been taken, nor compensation has been paid, in such a case proviso becomes operative in given exigency of not depositing amount with respect to majority of landholdings.
    • A reading of section 24(2) shows that in case possession has been taken even if the compensation has not been paid, the proceedings shall not lapse.
    • In case payment has not been made nor deposited with respect to the majority of the holdings in the accounts of the beneficiaries, then all the beneficiaries specified in the notification under Section 4 of the Act of 1894 shall get the enhanced compensation under the provisions of the Act of 2013.
    • Section 24(2) not only deals with failure to take physical possession but also failure to make payment of compensation. If both things have not been done, there is lapse of the acquisition proceeding.
    • once possession has been taken, there can be no lapse of the proceedings, and higher compensation is intended on failure to deposit the compensation. Once

an award has been passed and possession has been taken, there is absolute vesting of the land, as such higher compensation follows under the proviso, which is beneficial to holders.

  • In a case where both the negative conditions have not been fulfilled, as mentioned in section 24(2), there is a lapse. For Lapse to occur both the negative condition must co-exist. If any of the negative condition is satisfied there is no lapse. Hence, the proviso should be interpreted as a part of S. 24(2) alone because it talks about enhanced compensation.
    • S. 24(2) starts with an non obsatnte clause. Hence, S. 24(2) is an exception to S. 24(1)(b). As proviso is a part of the S. 24(2), the non Obstante clause also qualified the proviso.
    • Parliament has used the full stop (.) after section 24(1) and colon
    • (:) after section 24(2). It shows that S. 24(1) ends and S. 24(2) starts, but S> 24(2) does not end with a colon. That means the proviso is a part of S. 24(2).

Certain important characteristics of . 24(2)

  1. Section 24(2) saves land which has been vested in the State, once award has been passed and possession of land. However, in case compensation has not been deposited with respect to majority of landowners, in any given award, all beneficiaries have to be paid higher compensation under the new Act.
  2. The main part of section 24(2) deals with payment of compensation; also the proviso which provides for higher compensation to be paid
  3. Section 24(1)(a) operates where no award is made in a pending acquisition proceeding; in such event all provisions of the new Act relating to determination of compensation would apply. Section 24 (1) (b) logically continues with the second situation, i.e. where the award has been passed, and states that in such event, proceedings would continue under the Act of 1894. Section 24 (2) – by way of an exception, states that where an award is made but requisite steps have not been taken for five years or more to take possession nor compensation has been paid then there is lapse of acquisition. If one of the steps has been taken, then the proviso can operate. Time is the essence. It is on the basis of time-lag that the lapse is provided and in default of payment for five years as provided on failure to deposit higher compensation is to be paid.
  4. Besides the court held that various judgements have said that proviso is part of the cause to which it is appended and not to any other clause. (State of Rajasthan v. Leela Jain & Ors 1965 (1) SCR 276).
  5. In S. Sundaram Pillai & Ors. v. V.R. Pattabiraman & Ors (1985) 1 SCC 591 it was held,

To sum up, a proviso may serve four different purposes:

(1) qualifying or excepting certain provisions from the main enactment:

(2) it may entirely change the very concept of the intendment of the enactment by insisting on certain mandatory conditions to be fulfilled in order to make the enactment workable: (3) it may be so embedded in the Act itself as to become an integral part of the enactment and thus acquire the tenor and colour of the substantive enactment itself; and

(4) it may be used merely to act as an optional addendum to the enactment with the sole object

6. In the King v. Dominion Engineering Co. Ltd.140, it was held that where a section of an enactment contains two provisions and the second proviso is repugnant in any way to the first, the second proviso must prevail for it stands last in the enactment and speaks the last intention of the makers. In the present case S 24(2) being an exception to S. 24(1) the proviso added in S. 24(2) will be a proviso to S. 24(2) alone because, while drafting the provision S. 24(2) by virtue of the non obstante cause came last to the intention of the legislators.

WHAT IS THE MEANING TO BE GIVEN TO THE WORD “PAID” USED IN SECTION 24(2) AND “DEPOSITED” USED IN THE PROVISO TO SECTION 24(2)?

  1. Concept- Section 31 (2) of the Act of 1894 deals with deposit in case Collector is ‘prevented’ from making payment by one or more contingencies mentioned in section 31(2). The deposit follows if the Collector is prevented from making payment. In case Collector is prevented from making payment due to contingencies such refusal to receive the amount, or if there be no person competent to alienate the land, or if there is a dispute as to the title to receive the compensation or as to the apportionment of it, he (i.e. the Collector) may withhold it or in case there is dispute as to apportionment, he may ask the parties to get a decision from the Reference Court i.e., civil court and to clear the title. In such exigencies, the amount of compensation is required to be deposited in the court to which reference would be submitted under section 18. Section 31(2) requires deposit in case of reference under section 18 and not the reference, which may be sought under section 30 or section 28A of the Act of 1894.
  2. Section 24(2) deals with the expression where compensation has not been paid. It would mean that it has not been tendered for payment under section 31(1). Though the word ‘paid’ amounts to a completed event however once payment of compensation has been offered/tendered under section 31(1), the acquiring authority cannot be penalized for non-payment as the amount has remained unpaid due to refusal to accept, by the landowner and Collector is prevented from making the payment.
  3. the word ‘paid’ used in section 24(2) cannot be said to include within its ken ‘deposit’ under section 31(2). For that special provision has been carved out in the proviso to section 24(2) which deals with the amount to be deposited in the account of beneficiaries. As the statute uses both the words “paid” ( in S. 24(2)) and “deposited”  (in proviso to S. 24(2)) , paid cannot mean as deposited.
  4. As per section 24(2), if the amount has not been paid nor possession has been taken, it provides for lapse. Whereas the proviso indicates amount has not been deposited with respect to a majority of land holdings in a case initiated under the Act of 1894 for 5 years or more. The period of five years need not have been specified in the proviso as it is part of section 24(2) and has to be read with it.
  5. Two different consequences of non-deposit of compensation are: (i) higher compensation in a case where possession has been taken, payment has been made to some and amount has not been deposited with respect to majority of the holdings, (ii) in case there is no lapse, the beneficiaries would be entitled to interest as envisaged under section 34 from the date of taking possession at the rate of 9% per annum for the first year and after that @ 15% per annum.
  6. The word paid cannot mean deposited. When the compensation is tendered to the land holder, but for some reason the payment is not done, i.e. the land holder does not accept the payment, the amount is deposited in a court.
  7. But the court without giving any specific reason held that non-deposit of money would not make land acquisition nullified. Failure to deposit provides for higher rate of interest as a penalty but not vitiating the land acquisition proceeding.
  8. The court gave the following opinion –
    1. when amount has been tendered, the obligation has been fulfilled by the State
    1. In case a person has not accepted the amount wants to take the advantage of non-payment, though the amount has remained due to his own act. It is not open to him to contend that “amount has not been paid to him, as such, there should be lapse of the proceedings.”
    1. Even in a case when offer for payment has been made but not deposited, liability to pay amount along with interest subsist and if not deposited for majority of holding, for that adequate provisions have been given in the proviso also to Section 24(2).
    1. In the event of refusal by the landowner to receive, or in other cases, such as absence of the true owner, or in case of dispute as to who was to receive it, no doubt, the statute provided that the amount was to be deposited with the court.
    1. Thus, it would be incorrect to imply that failure to deposit compensation [in court, under Section 31(2)] would entail lapse, if the amounts have not been paid for five years or more prior to the coming into force of the Act of 2013.
  9. The Management of Delhi Transport Undertaking v. The Industrial Tribunal, Delhi & Anr 1965 (1) SCR 998 , has laid down the law to the similar effect. It is not actual payment, but tender of amount which is necessary to fulfil obligation to pay.
  10. In Indian Oxygen Ltd. v. Narayan Bhoumik (1968) 1 PLJR 94, it was held that the “the condition as to payment in the proviso does not mean that wages have to be actually paid but if wages are tendered or offered, such a tender or offer would be sufficient compliance” with the statute.
  11. Payment is actually made to the landowner and deposit is made in the court, that is not the payment made to the landowner. It may be discharge of liability of payment of interest and not more than that. When the legislature uses two different expressions in the same statute, they must be given different meanings, to carry out legislative intent.
  12. Once tender is made, obligation to pay is fulfilled so that the amount cannot be said to have been paid, but obligation to pay has been discharged and if a person who has not accepted it, cannot penalise the other party for default to pay and non-deposit carries only interest as money had been retained with the Government.
  13. In case amount has been tendered and the landowner has refused to receive it, it cannot be said that the liability arising from non-payment of the amount is that of lapse of acquisition. Interest would follow in such a case also due to non-deposit of the amount. Equally, when the landowner does not accept the amount, but seeks a reference for higher compensation, there can be no question of such individual stating that he was not paid the amount. When a land loser demands higher compensation, the amount is deposited in a reference court. The land loser is then bound to the decision of the reference court.
  14. Reference for higher compensation, there can be no question of such individual stating that he was not paid the amount. Their money is safe and credited in the earmarked quantified amount and can be made available for disbursement to him/them. There is no prejudice caused and every infraction of law would not vitiate the act.
  15. In Kishan Das v. State of U.P158 , this Court observed that where land owners themselves delayed the acquisition proceedings, it is discretionary for the court to award the interest and they cannot get the premium on their dilatory tactics.

QUESTION NO.4: MODE OF TAKING POSSESSION UNDER THE ACT OF 1894

  1. When the State Government acquires land and drawn up a memorandum of taking possession, that amounts to taking the physical possession of the land.
  2. On the large chunk of property or otherwise which is acquired, the Government is not supposed to put some other person or the police force in possession to retain it and start cultivating it till the land is used by it for the purpose for which it has been acquired. The Government is not supposed to start residing or to physically occupy it once possession has been taken by drawing the inquest proceedings for obtaining possession thereof.
  3. Any re-entry is made on the land or someone starts cultivation on the open land or starts residing in the outhouse, etc., is deemed to be the trespasser on land which in possession of the State.
  4. A person with title is considered to be in actual possession.
  5. In Ram Dass v. Davinder (2004) 3 SCC 684, this Court stated that possession and occupation in common parlance may be used interchangeably, but in law possession amounts to holding property as an owner, while to occupy is to keep possession by being present in it.
  6. Under section 16 of the Act of 1894, vesting of title in the Government, in the land took place immediately upon taking possession. Under Sections 16 and 17 of the Act of 1894, the acquired land became the property of the State without any condition or limitation either as to title or possession. Absolute title thus vested in the State. Hence, it is not required for the state to physical possess the property by way of creating any office or putting any structure.
  7. In National Textile Corporation Ltd. v. Nareshkumar Badrikumar Jagad & Ors 2011 (12) SCC 695, the concept of vesting was considered. Court  observed that vesting means an absolute and indefeasible right. Vesting, in general sense, means vesting in possession. Vesting may include vesting of interest too.
  8. After the land has vested in the State, the total control is of the State. Vesting is absolute and free from all encumbrances that includes possession. Once there is vesting of land, once possession has been taken, section 24(2) does not contemplate divesting of the property from the State as mentioned above.
  9. In Velaxan Kumar v Union of India 2015 (4) SCC 325 the court took cognizance of the photographs of the land and held that possession was not taken by the Government. However, the photographs cannot be an evidence for deciding or not deciding possession. Hence, Velaxan Kumar is overruled. Similarly, in Narmada Bachao Andolan v State of MP (2011) 7 SCC 639 Case DVD and CD are taken into cognizance to decide the possession. Narmada Bachao Andoloan judgement is overruled to the extent it decides about the mode of taking possession.
  10. Under the Act of 1894 when possession is taken after award is passed under section 16 or under section 17 before the passing of the award, land absolutely vests in the State on drawing of Panchnama of taking possession, which is the mode of taking possession. Thereafter, any re-entry in possession or retaining the possession is wholly illegal and trespasser’s possession inures for the benefit of the owner and even in the case of open land, possession is deemed to be that of the owner.
  11. When the land is, vacant and is lying open, it is presumed to be that of the owner by this Court as held in Kashi Bai v. Sudha Rani Ghose AIR 1958 SC 434. Mere re-entry on Government land once it is acquired and vests absolutely in the State (under the Act of 1894) does not confer, any right to it and Section 24(2) does not have the effect of divesting the land once it vests in the State.

QUESTION NO.5: THE EFFECT OF INTERIM ORDER OF COURT

  1. Normally what happens, when the State acquires land and tenders compensation, the land losers don’t agree with the quantum of the compensation and go to court and get an interim stay. During the period of stay, the State can neither take possession of the land nor offer compensation. But as per S. 24(2) there is a time period of five years for lapse of the acquisition process. So, whether the period of interim stay to be calculated while computing five years period was the question before the court. The state took shelter of the maxim, “actus curiae neminem gravabit”. It means even in the absence of the provisions specifically excluding the period of interim stay/injunction having been made in Section 24(2) of the Act, 2013, the aforesaid principles are attracted and the period has to be excluded.But the opposite party claimed that In Padma Sundar Rao v State of Tamil Nadu a Constitution Bench of the Court has declined to rely on the maxim and similarly in State of Rajasthan v Khandaka Jain Jewellers, the maxim was not applied. It was held that it was not a principle of law.
  2. The court gave its reason as follows-
    1. A period of five years is given for the state to act and not sit over the matter
    1. Lapse is provided in case of default on the part of the state authorities and not because of delay caused by any other circumstances including court order
    1. The interim stay by the court is not attributable to fault by the administration.
    1. Delhi Development Authority v. Sukhbir Singh  may be relied where it was held that the period of five years is given for the administrative machinery to put their house in order.
    1. If interim stay period is not excluded, it may so happen that, people will get a court order for interim stay, delay the process beyond five years and get higher compensation. The act does not intend to give higher compensation to all, rather it aims to penalise the state if the proceeding is not concluded within a time bound manner. So if the interim stay period is included in calculating the period of five years, the objective of the act will not be satisfied.
    1. Section 24, it clearly ousts the period spent during the interim stay of the court. Five years’ period is fixed for the purpose to take action, if they have not taken the action for 5 years or more, then there is lapse, not otherwise. Even if there had been a provision made with respect to the exclusion of time spent in the court proceedings with respect to interim stay due to court’s order, it could have been ex abundanti cautela, ( superfluous) which has been considered by this Court in Union of India and Ors. v. Modi Rubber Ltd (1986) 4 SCC 66.
    1. Court held that the conscious omission by Parliament in Section 24(2) to exclude the period, an interim order operates is to be given effect and that the court should not fill in the gap.
    1. As statute does not provide the exclusion of time period explicitly, the court told that common law principle may have to be applied for excluding the interim stay period for computation of five year period.
    1. In Rana Girders Ltd. v. Union of India 2013 (10) SCC 746, Court observed that the statutory provision would prevail upon the common law principles.
    1. There is no doubt that common law principles have to be weighed upon the statutory provision and latter has to prevail, but the statutory provision itself makes it clear that in the instant matter such period has to be excluded, thus, the principles of common law also apply with full force.
    1. The maxim “lex non cogit ad impossibilia” means that the law does not expect the performance of the impossible – is a valid principle in this case.  Another Roman Law maxim “nemo tenetur ad impossibilia”, means no one is bound to do an impossibility. During a court stay, the State will not be able to perform his duty. Hence, the period has to be excluded.
    1. In HUDA and Anr. v. Dr. Babeswar Kanhar & Anr , this Court considered the general principle that a party prevented from doing an act by some circumstances beyond his control, can do so at the first subsequent opportunity as held in Sambasiva Chari v. Ramasami Reddi  That means, the State should take prompt action the moment the stay is withdrawn.
    1. If the question arises why legislators have not specifically excluded the interim stay period, then at best it can be held to be accidental oversight.  The omission to provide for exclusion of time during which interim orders subsisted, while determining whether or not acquisitions lapsed, in the present case, is a clear result of inadvertence or accident, having regard to the subject matter, refusal to apply the principle underlying the maxim actus curae neminem gravabit ( if a wrong is done because of ommisison on the part of the legislator, the court should take steps to undo the wrong by interpreting the statute ) would result in injustice.

QUESTION NO.6: WHETHER SECTION 24 REVIVES STALE AND BARRED CLAIM

  1. the legality of concluded cases cannot be questioned under the guise of Section 24(2) as it does not envisage or confer any such right to question the proceedings and the acquisitions have been concluded long back, or in several rounds of litigation as mentioned above, rights of the parties have been settled.
  2. The legality of the proceedings cannot be challenged belatedly, and the right to challenge cannot be revived by virtue of the provisions of Section 24(2). Section 24(2) only contemplates lethargy/inaction of the authorities to act for five years or more.
  3. Once vesting takes place, possession is presumed to be that of the owner, i.e., the State Government and land has been transferred to the beneficiaries, Corporations, Authorities, etc., for developmental purposes and third-party interests have intervened, such challenges cannot be entertained at all under the purview of Section 24(2) as it is not what is remotely contemplated in Section 24(2) of the Act of 2013.
  4. courts cannot invalidate acquisitions, which stood concluded. No claims in that regard can be entertained and agitated as they have not been revived. There has to be legal certainty where infrastructure has been created or has been developed partially, and investments have been made, especially when land ha been acquired long back. It is the duty of the Court to preserve the legal certainty, as observed in Vodafone International Holdings B.V. v. Union of India and Ors (2012) 6 SCC 613
  5. Section 24 is applicable to pending proceedings, not to the concluded proceedings and the legality of the concluded proceedings, cannot be questioned. Such a challenge does not lie within the ambit of the deemed lapse under Section 24.

THE FINAL JUDGEMNT OF THE COURT

  1. Under the provisions of Section 24(1)(a) in case the award is not made as on 1.1.2014 the date of commencement of Act of 2013, there is no lapse of proceedings. Compensation has to be determined under the provisions of Act of 2013.
  2. In case the award has been passed within the window period of five years excluding the period covered by an interim order of the court, then proceedings shall continue as provided under Section 24(1)(b) of the Act of 2013 (under the Act of 1894) as if it has not been repealed.
  3. 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 Act of 2013 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.
  4. The word Paid is not same as deposited.  Non-deposit of compensation (in court) does not result in the lapse of land acquisition proceedings.
  5. In case a person has been tendered the compensation as provided under Section 31(1) of the Act of 1894, it is not open to him to claim that acquisition has lapsed under Section 24(2) due to non-payment or non-deposit of compensation in court. The obligation to pay is complete by tendering the amount under Section 31(1). Land owners who had refused to accept compensation or who sought reference for higher compensation, cannot claim that the acquisition proceedings had lapsed under Section 24(2) of the Act of 2013.
  6. The proviso to Section 24(2) of the Act of 2013 is to be treated as part of Section 24(2) not part of Section 24(1)(b).
  7. The mode of taking possession under the Act of 1894 and as contemplated under Section 24(2) is by drawing of inquest report/ memorandum. Once award has been passed on taking possession under Section 16 of the Act of 1894, the land vests in State there is no divesting provided under Section 24(2) of the Act of 2013, as once possession has been taken there is no lapse under Section 24(2).
  8. The period of subsistence of interim orders passed by court has to be excluded in the computation of five years.
  9. Section 24(2) of the Act of 2013 does not give rise to new cause of action to question the legality of concluded proceedings of land acquisition.

The following cases are overruled.

  1. Pune Municipal Corporation & Anr. and all those cases that follow its ratio
  2. Shree Balaji Nagar Residential Association and all those cases that follow its ratio
  3. Indore Development Authority v. Shailendra (Dead) through L.Rs. and Ors. Is overruled with respect to the applicability of S. 24(2) of the Act.
  4. Velaxan Kumar v Union of India 2015 (4) SCC 325 the court took cognizance of the photographs of the land and held that possession was not taken by the Government. However, the photographs cannot be an evidence for deciding or not deciding possession. Hence, Velaxan Kumar is overruled.
  5. Similarly, in Narmada Bachao Andolan v State of MP (2011) 7 SCC 639 Case DVD and CD are taken into cognizance to decide the possession. Narmada Bachao Andoloan judgement is overruled to the extent it decides about the mode of taking possession.
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