• Ms Arushi Singh

Indore Development Authority vs Manoharlal And Ors. (S.L.P. (C) Nos.9036-9038 of 2016)

CASE

Indore Development Authority vs Manoharlal And Ors.


CITATION

S.L.P. (C) Nos.9036-9038 of 2016


CORAM

Supreme Court of India (Civil Appellate Jurisdiction)

Constitution Bench - Hon’ble Justice Arun Mishra (author), Hon’ble Justice M.R. Shah, Hon’ble Justice Aniruddha Bose, Hon’ble Justice Indira Banerjee, Hon’ble Justice Vineet Saran


ALSO KNOWN AS

Land Acquisition Compensation 2020 Case


POINT OF CONSIDERATION

Interpretation of Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 w.r.t. twin conditions of payment of compensation and possession of the land.


FACTS

  1. The correct interpretation of Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (for short, “2013 Act”), was the subject matter of reference to the five Judge Bench of the Hon’ble Supreme Court of India.

  2. The Act of 2013 repealed and replaced the Land Acquisition Act, 1894, (for brief “ 1894 Act”) a general law for acquisition of land of public purposes, which had been in force for almost 120 years, with a view to address certain inadequacies and/ or shortcomings in the said Act. The Act of 2013 was prospective and saved proceedings already initiated under the Land Acquisition Act, 1894 before its repeal, subject to provisions of Section 24 of the Act of 2013, which began with a non- obstante clause and overrode all other provisions of the Act of 2013.

  3. Section 24 of the 2013 Act is reproduced below – “24. Land acquisition process under Act No. 1 of 1894 shall be deemed to have lapsed in certain cases.–

(1) Notwithstanding anything contained in this Act, in any case of land acquisition proceedings initiated under the Land Acquisition Act, 1894,—

  1. where no award under section 11 of the said Land Acquisition Act has been made, then, all provisions of this Act relating to the determination of compensation shall apply; or

  2. where an award under said section 11 has been made, then such proceedings shall continue under the provisions of the said Land Acquisition Act, as if the said Act has not been repealed.

(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.”

ISSUES RAISED & RATIO

  • Whether the two conditions provided under the proviso to Section 24(2) of the 2013 Act were cumulative, i.e., both were to be fulfilled for lapsing of acquisition proceedings, or the conditions were in the alternative (“either/or”).

The court explained that Section 24(1)(a) of the Act of 2013 read with the non-obstante clause provided that, in case proceedings were initiated under the Act of 1894 yet the award had not been made under Section 11(of the 1894 Act), then the provisions of the Act of 2013, relating to the determination of compensation would have been applicable. However, the proceedings held earlier did not lapse. In terms of Section 24(1)(b), where award under Section 11 was made, then such proceedings continued under the provisions of the Act of 1894. It contemplated that such pending proceedings, as on the date on which the Act of 2013 came into force shall be continued and taken to their logical end.


However, it was further explained by the court that the exception to Section 24 (1)(b) was provided in Section 24(2) in case of pending proceedings; in case where the award had been passed five years or more prior to the commencement of the Act of 2013, the physical possession of the land had not been taken, or the compensation had not been paid, the proceedings shall be deemed to have lapsed, and such proceedings could not be continued as per the provisions of Section 24(1)(b) of the Act of 2013.


Court explained that Section 24(2) carved out an exception to Section 24(1)(b), where the award has been passed, and the proceedings were pending, but in such proceedings, physical possession of the land has not been taken, or compensation has not been paid, proceedings shall be lapsed. There were twin requirements for the lapse; firstly, physical possession had not been taken and, secondly, compensation had not been paid. In case possession had been taken and compensation had been paid, there was no lapse of the proceedings. The question which was to be decided was whether the conditions were cumulative, i.e both are to be fulfilled, for lapsing of acquisition proceedings, or the conditions were in the alternative (“either/or”).


According to the State and acquiring agencies, their contention was that in a situation where possession had been taken, and compensation was not paid, there was no lapse, also, in case where compensation had been paid, but possession had not taken in a proceeding pending as on 1.1.2014 (date of enactment of 2013 Act), there was no lapse. Sine qua non was that proceeding must be pending. They argued that the word “or” used in phrase ‘the physical possession of the land has been not taken, or the compensation has not been paid’, had to be interpreted as “and” as two negatives required to qualify it.


Furthermore, the State argued that when two negative conditions were connected by “or” they were construed as cumulative, the word “or” was to be read as “nor” or “and.”

Per Contra, naturally, the landowners argued that lapse of acquisition occurred if compensation was not paid, or possession was not taken, 5 years before the coming into force of the Act of 2013.


The Hon’ble Court partially accepted the contention of the State and held that the word ‘or’ used in Section 24(2) between possession and compensation had to be read as ‘nor’ or as ‘and’. The deemed lapse of land acquisition proceedings under Section 24(2) of the Act of 2013 would take place where due to inaction of authorities for five years or more prior to commencement of the said Act, the possession of land had not been taken nor compensation has been paid. In other words, in case possession had been taken, compensation had not been paid then there was no lapse. Similarly, if compensation had been paid, but possession had not been taken then there was no lapse.


However, the Hon’ble Court partly accepted the contention of the landowners as well and clarified that even if possession had been taken, despite which payment was neither made nor deposited, (for the majority of the landholdings), then all beneficiaries holding land were to be paid enhanced compensation under the provisions of the Act of 2013. However, the Court also held that if the compensation was made but no possession was taken then the proceedings were to be governed by the 1894 Act as once possession had been taken, there could be no lapse of the proceedings and higher compensation was intended on failure to deposit the compensation.


  • Whether the term “paid” under Section 24(2) main part of the Act of 2013 included the right to deposit the compensation in the court or not?

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


It was held that the concept of “deposit” was different and quite apart from the word “paid”, due to which, lapse was provided in Section 24 of Act of 2013.


It was clarified that there was a conscious omission of the word “deposit” in Section 24(2), which had been used in the proviso. Parliament could not be said to have used different words carrying the same meaning in the same provision, whereas words “paid” and “deposited” carried a totally different meaning. Payment was actually made to the landowner and deposit was made in the court, which was not the payment made to the landowner. The court applied the rule of literal construction and held the words “paid” and “deposited” did not carry the same meaning.


IMPORTANT CASES REFERRED

  1. Pune Municipal Corporation & Anr v Harakchand Misrimal Solanki & Ors, (2014) 3 SCC 183

  2. Yogesh Neema & Ors v State of Madhya Pradesh, (2016) 6 SCC 387

  3. Sree Balaji Nagar Residents Association v State of Tamil Nadu, (2015) 3 SCC 353

  4. State of Haryana v Maharana Pratap Charitable Trust (Regd) & Anr, CA No.4835 of 2015


The author is a LL.B Graduate of University School of Law and Legal Studies, GGSIPU, New Delhi



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