Pune Municipal Corporation v. Harakchand Misirimal Solanki

Supreme Court of India · 24 January 2014 · 3 judges

Overruled in whole or in part by Indore Development Authority v. Manoharlal (2020), which says: “Resultantly, the decision rendered in Pune Municipal Corporation & Anr. (supra) is hereby overruled and all other decisions in which Pune Municipal Corporation (supra) has been followed, are also overruled.”

Compensation is 'paid' under Section 24(2) of the 2013 Act only if it is offered and, where a Section 31(2) contingency prevents payment, deposited in the reference court; deposit in the government treasury does not count, so the acquisition lapsed.

Facts

On a proposal of the Pune Municipal Corporation, land of about 43.94 acres was notified under Section 4 of the Land Acquisition Act, 1894 in 2004 for a 'Forest Garden'. The Section 6 declaration followed in 2005 and the award was made on 31.01.2008. The landowners did not collect the compensation, and about Rs. 27 crores was deposited in the government treasury. The Bombay High Court quashed the acquisition on several grounds, including absence of a General Body resolution of the Corporation and non-compliance with Section 7. In the Corporation's appeals, the landowners argued that the acquisition had in any case lapsed under Section 24(2) of the 2013 Act, which came into force on 01.01.2014, since the award was more than five years old and compensation had not been paid.

Questions before the Court

What is the meaning of the expression 'compensation has not been paid' in Section 24(2) of the 2013 Act?
Did deposit of the compensation in the government treasury amount to payment, so as to save the acquisition from lapsing?
Does Section 114(2) of the 2013 Act, read with Section 6 of the General Clauses Act, 1897, protect acquisitions already concluded under the 1894 Act?

What the Court held

Section 24(2) overrides Section 24(1). An acquisition under the 1894 Act lapses where the award was made five years or more before the 2013 Act came into force and either physical possession has not been taken or compensation has not been paid.
'Paid' does not mean merely offered or tendered, nor does it require actual receipt by the landowner. Compensation is paid when it has been offered and, on any contingency under Section 31(2) of the 1894 Act, deposited in the court to which a Section 18 reference can be made.
Deposit of the compensation in the government treasury is not payment. Since the award was over five years old and the money was neither paid nor deposited in court, the acquisition was deemed to have lapsed.
Section 114(2) applies Section 6 of the General Clauses Act subject to the provisions of the 2013 Act, so it cannot defeat the legal fiction in Section 24(2). The appeals were dismissed without deciding the High Court's grounds.

Why it matters

The judgment settles how the word 'paid' in Section 24(2) of the 2013 Act is to be read, tying it to the tender and court deposit procedure in Section 31 of the 1894 Act. It holds that a deposit in the government treasury does not prevent lapse, and that the saving in Section 114(2) cannot override the deeming provision in Section 24(2).

In the Court's words

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

“We are of the view, therefore, that for the purposes of Section 24(2), the compensation shall be regarded as “paid” if the compensation has been offered to the person interested and such compensation has been deposited in the court where reference under Section 18 can be made on happening of any of the contingencies contemplated under Section 31(2) of the 1894 Act.”

Page 10 of the judgment

“It is also admitted position that compensation so awarded has neither been paid to the landowners/persons interested nor deposited in the court. The deposit of compensation amount in the government treasury is of no avail and cannot be held to be equivalent to compensation paid to the landowners/persons interested. We have, therefore, no hesitation in holding that the subject land acquisition proceedings shall be deemed to have lapsed under Section 24(2) of the 2013 Act.”

Page 12 of the judgment

“Section 114(1) of the 2013 Act repeals 1894 Act. Sub-section (2) of Section 114, however, makes Section 6 of the General Clauses Act, 1897 applicable with regard to the effect of repeal but this is subject to the provisions in the 2013 Act.”

Page 12 of the judgment

Provisions interpreted

Related judgments

Case and bench

Parties: Pune Municipal Corporation & Anr. v. Harakchand Misirimal Solanki & Ors.
Case: Civil Appeal No. 877 of 2014 (Arising out of SLP(C) No. 30283 of 2008), with connected appeals
Decided: 24 January 2014
Bench: R.M. Lodha, Madan B. Lokur, Kurian Joseph
Opinions: Unanimous. Judgment of the Court delivered by R.M. Lodha, J.