The Constitutional Bench on 6th March, 2020 decided a controversial issue pertaining to the interpretation of Section 24 of Land Acquisition Act, 2013 which deals with the situations under which the Land Acquisition process under Section 24 is deemed to be lapsed.
By this Judgment, the SC overruled the judgment pronounced by the 3 Judge Bench of SC in Pune Municipal Corporation Case.
Understanding Section 24 of the Act
Section 24(1) of Act, 2013 provides that where no award has been made under the 1894 Act, the land owner will be entitled to the benefits of 2013 Act and where award has been made, the proceedings under the 1894 Act will remain unaffected. Section 24(2) of the Act, 2013 provides that where under the proceedings of land acquisition under 1894 Act the award has been made 5 years or more prior to the commencement of 2013 Act (i.e. 1st Jan, 2014), the said proceedings shall lapse in case where –
1. The physical possession of the land has not been taken, or
2. The compensation has not been paid.
Background of the Case
In 2014, SC in Pune Municipal Corporation & Another v. Harakhchand Misrimal Solanki & Others, held regarding the interpretation of Section 24 of the Act that the Deposit of Compensation in the Treasury cannot be regarded as payment under Section 24(2) and therefore, land acquisition proceedings will lapse.
This view prevailed for 3 years, unless in 2017 the bench in Supreme Court case of Indore development Authority v. S. Shailendra doubted its correctness and therefore, referred it to the larger bench.
The Constitution Bench was set up to decide the following question pertaining to Land Acquisition Act, 2013.
Key Points of Interpretation
- The terms ‘paid’ and ‘deposited’ under Section 24 of the Act would include the deposit of payment in the Government Treasury. The land owners could not insist that the amount should be deposited with the Court or the land owners so as to keep the proceedings under the old Act.
- The ‘Or’ between the possession has not been taken and compensation has not been paid under Section 24(2) of the Act has to be read as ‘And’. This would mean that the proceedings will only lapse when no possession has been taken as well as no compensation has been paid. There would be no lapse if possession is taken but compensation is not paid and compensation is paid but possession is not taken. The Court stated “by reading word ‘or’ as ‘and’, the words ‘or the compensation has not been paid’ becomes otiose and redundant. Parliament could have only said that lapsing would occur only if possession has not been taken, because if possession is taken then there would never be a lapsing and therefore, such interpretation was contrary to every rule of interpretation.“
- The proviso to Section 24(2) of the Act of 2013 is to be treated as part of Section 24(2) and not part of Section 24(1)(b).
Difference between 1894 and 2013 Act
In 1894 Act theAcquisition of land was according to the will of the Government, whereas in 2013 Act the acquisition requires consent in case of Public-Private Projects and Private companies for public purpose.
In 1894 Act, Compensation is given according to the prevailing circle rate in the area which are outdated and too less whereas the new Act provides for better provisions for compensation. Approximately, the land owner gets 4 times of market value of land in case of rural areas and 2 times of market value of land in case of urban areas.
1894 Act provides no Appeal mechanism to stop or challenge the process of Acquisition but in new Act multiple checks and authority to make the land acquisition process a win-win situation.
Effect and Conclusion
The judgment will affect all the cases undergoing the land acquisition proceedings where the dispute was regarding the lapse of proceedings under the 1894 Act due to not payment of compensation or not taking the possession.
The Court concluded the matter with the observations which are explaining the true intent of the legislature by Section 24.
The Court stated “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. Section 24 applies to a proceeding pending on the date of enforcement of the Act of 2013, 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 mode of taking possession to reopen proceedings or mode of deposit of compensation in the treasury instead of court to invalidate acquisition.“
- Indore Development Authority v. Manoharlal & Ors., S.L.P. (C) NOS.9036-9038 OF 2016).
- Pune Municipal Corporation & Anr v Harakchand Misrimal Solanki & Ors., (2014) 3 SCC 183.
- Indore Development Authority v Shailendra (dead) through Lrs. & Ors., 2018 SCC Online SC 100.
- Land Acquisition : No Lapse Of Proceedings Under Old Act If Compensation Is Deposited In Treasury ; SC 5-Judge Bench Upholds Indore Development Author https://www.livelaw.in/top-stories/section-24-land-acquisition-5-judge-bench-indore-development-authority-case-153530
- SC says land buy proceeding won’t lapse as long as govt paid compensation.
Image Credit- www.indiatoday.in