Breaking: What a Constitution Bench of the Supreme Court held on Section 24 of the Land Acquisition Act
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Breaking: What a Constitution Bench of the Supreme Court held on Section 24 of the Land Acquisition Act

Shruti Mahajan

A Constitution Bench of the Supreme Court today overruled all precedents pertaining to the interpretation of Section 24 of the Land Acquisition Act, 2013 (Indore Development Authority v. Manoharlal and Ors etc.).

The Bench of Justices Arun Mishra, Indira Banerjee, Vineet Saran, MR Shah, and Ravindra Bhat rendered the judgment.

At the outset, Justice Mishra revealed that the Constitution Bench had overruled all earlier precedents on the issue.

The Court held that under Section 24(1)(a) of the Land Acquisition Act, in case the award is not made as of January 1, 2014 (date of commencement of the 2013 Act), there will be no lapse of proceedings and the compensation will have to be determined as under the 2013 Act.

In case the award is passed within the window of five years, then proceedings shall continue as under 24(1)(b) of 2013 Act "under the Act of 1894 as if it has not been repealed". The eriod of five years mentioned here exclusdes the period of time covered under any interim orders passed by the Courts, the Apex Court clarified.

Further, the word "or" used in S. 24(2) has to be read as "nor" or "and", the Court said. The interpretation of the word "or" in the provision was crucial and a susbtantial part of the hearing was devoted for submissions on this point. The five-Judge bench has held that it is now required to be interpreted as "nor" or "and".

Section 24 of 2013 Act
Section 24 of 2013 Act

Effectively this means that there will be no lapse of proceedings in case where:

- possession of the land is taken, and compensation is not paid.

- possession of the land not taken, and compensation is paid.

The mode of taking possession has also been thrown light on by the Court.

"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)," the Court said.

Moreover, if a person is tendered compensation under Section 31(1) of the Act of 1894, it is not open to him to claim lapse of acquisition due to non-payment or non-deposit of compensation. The obligation of the government to pay is complete on tendering the amount under Section 31(1), the Court held.

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.
Supreme Court

Having said this, the Court also said, "The expression 'paid' in the main part of Section 24(2) of the Act of 2013 does not include a deposit of compensation in court." The Court added that non-deposit of the amount in the Court would not result in lapse of the acquisition proceedings. However, if the obligation of tendering the amount as under Section 31 is not fulfilled, then interest can be Section 34 of the Act.

The Bench also clarified the position on the proviso to Section 24. It held that the proviso is to be treated as part of Section 24(2) only and cannot be read with Section 24(1)(b).

The proceedings will be said to be deemed to have lapsed on account of inaction by the authorities to take possession or pay compensation in the window period of five years, the Court also held.

The provisions of Section 24(2) providing for a deemed lapse of proceedings are applicable in case authorities have failed due to their inaction to take possession and pay compensation for five years or more before the Act of 2013 came into force, in a proceeding for land acquisition pending with concerned authority as on 1.1.2014. The period of subsistence of interim orders passed by court has to be excluded in the computation of five years.
Supreme Court

It was also held that Section 24 applies to proceedings pending as of the date of commencement of the 2013 Act. Proceedings under the new Act that had already concluded cannot be reopened, the Court said.

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.

Supreme Court

The main question before the Constitution Bench pertained to the interpretation of Section 24 of the Land Acquisition Act of 2013 which deals with the certain class of cases in which the proceedings initiated under the old Act of 1894 would stand lapsed.

Conflicting interpretations of this Section led to a reference being made to a Constitution Bench of five Judges. The conflict is between the judgments in Pune Municipal Corporation v. Harakchand Misrimal Solanki of 2014 and Indore Development Authority v. Shailendra (D) thr LRS of 2018.

In the Pune Municipal Corporation case, a three-judge Bench of then CJI RM Lodha with Justices Madan B Lokur and Kurian Joseph held that land acquisition proceedings initiated under the 1894 Act five years prior to the passing of the new Act would lapse, if the compensation was not paid to the landowners or if the land was not taken control of.

Four years later, another three-judge Bench of Justices Arun Mishra, AK Goel, and Mohan Shantanagoudar not only gave a contradictory ruling, but also held that the 2014 judgment was per incuriam. Justice Shantanagoudar had passed a dissenting judgment in this case.

In this judgment, the Court held that the proceedings shall not be deemed to have lapsed under the old law if the landowners have refused to accept the compensation being offered to them.

In a subsequent development, the conflict in the judgments was brought to the notice of a Bench of Justices Madan Lokur, Kurian Joseph, and Deepak Gupta while the Bench was hearing a case under this law. Senior Counsel Mukul Rohatgi had pointed out the differing opinions and went on to question if a Bench can hold a judgment delivered by another bench of coordinate strength as per incuriam.

The judgment in Indore Development Authority was thus referred to a larger Bench and was set to be heard by a Constitution Bench headed by then CJI Dipak Misra. However, it was ultimately taken on board by the Constitution Bench headed by Justice Arun Mishra last year.

Just as the hearing in the case was scheduled to begin, Justice Arun Mishra's recusal was sought by a farmers' organisation. This was owing to an apprehension that a fair hearing may not be given in light of the fact that Justice Arun Mishra was part of the Bench that delivered the 2018 Indore Development Authority judgment.

In the end, Justice Mishra refused to recuse from hearing, and the Bench headed by him proceeded to hear the case on merits from November 6 last year.

Read Judgment

Indore Development Authority and Manoharlal (Land Acquisition Act) - 06.03.2020.pdf
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