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Indore Development Authority v. Manoharlal

Supreme Court of India · 6 March 2020 · 5 judges

Under Section 24(2) of the 2013 Land Acquisition Act, an acquisition lapses only if neither possession was taken nor compensation paid; tender of compensation is payment, and Pune Municipal Corporation was overruled.

Facts

Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 deals with acquisitions begun under the Land Acquisition Act, 1894. A three-Judge Bench in Pune Municipal Corporation v. Harakchand Misrimal Solanki had interpreted Section 24(2). A two-Judge Bench in Yogesh Neema v. State of Madhya Pradesh doubted Sree Balaji Nagar Residents Association v. State of Tamil Nadu, which had followed Pune Municipal Corporation and held that periods of court stays were not excluded. In Indore Development Authority v. Shailendra, two Judges of a three-Judge Bench prima facie found Pune Municipal Corporation per incuriam. Further references followed, and this batch of appeals by development authorities and States was placed before a five-Judge Bench, which framed six questions on the meaning of Section 24.

Questions before the Court

  1. Whether 'or' in Section 24(2) of the Act of 2013 is conjunctive or disjunctive, and whether the proviso forms part of Section 24(2) or Section 24(1)(b).
  2. What 'paid' and 'tender' mean under Section 24 and Section 31 of the Act of 1894, and whether non-deposit of compensation in court causes the acquisition to lapse.
  3. How possession is taken under the Act of 1894, and whether periods covered by interim court orders are excluded from the five years.
  4. Whether Section 24 revives barred and stale claims, and whether Pune Municipal Corporation was correctly decided.

What the Court held

  • Where no award was made by 1.1.2014 there is no lapse, and compensation is determined under the Act of 2013. Where an award was made within the five-year window, excluding periods covered by interim orders, proceedings continue under the Act of 1894 as provided by Section 24(1)(b).
  • 'Or' in Section 24(2) must be read as 'nor' or 'and'. Deemed lapse occurs only where, owing to the authorities' inaction for five years or more before the Act of 2013, possession has not been taken and compensation has not been paid. If either has happened, there is no lapse.
  • 'Paid' in Section 24(2) does not include deposit in court, and non-deposit does not cause lapse. If compensation was not deposited for the majority of holdings, all landowners get compensation under the Act of 2013 under the proviso, which is part of Section 24(2). Interest under Section 34 of the Act of 1894 may be granted.
  • Tender of compensation under Section 31(1) of the Act of 1894 completes the obligation to pay. Landowners who refused compensation or sought a reference for more cannot claim that the acquisition lapsed.
  • Possession is taken by drawing an inquest report or memorandum; once land vests in the State under Section 16, Section 24(2) does not divest it. Section 24 applies only to proceedings pending on 1.1.2014 and does not revive stale or time-barred claims or reopen concluded proceedings.
  • Pune Municipal Corporation and all decisions following it were overruled. Sree Balaji Nagar was overruled, and Indore Development Authority v. Shailendra could not prevail on the points decided.

Why it matters

The five-Judge Bench settles the meaning of Section 24 of the Act of 2013. It overrules Pune Municipal Corporation and the decisions following it, and holds that deemed lapse needs both non-possession and non-payment, that tender completes payment, and that interim order periods are excluded. It also holds that Section 24 cannot be used to reopen concluded acquisitions or revive stale claims.

In the Court's words

Copied from the official judgment; each passage links to its page.

“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.”
Arun Mishra, J.Page 316 of the judgment
“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).”
Arun Mishra, J.Page 317 of the judgment
“In this Court’s considered view, as regards the collation of the words used in Section 24(2), two negative conditions have been prescribed. Thus, even if one condition is satisfied, there is no lapse, and this logically flows from the Act of 1894 read with the provisions of Section 24 of the Act of 2013. Any other interpretation would entail illogical results.”
Arun Mishra, J.Page 93 of the judgment
“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”
Arun Mishra, J.Page 318 of the judgment

Provisions interpreted

Related judgments

Case and bench

Parties
Indore Development Authority v. Manoharlal
Case
S.L.P. (C) Nos. 9036-9038 of 2016
Decided
6 March 2020
Bench
Arun Mishra, Indira Banerjee, Vineet Saran, M.R. Shah, S. Ravindra Bhat
Opinions
Unanimous. Judgment of the Court delivered by Arun Mishra, J. for the five-Judge Bench.

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