Land Acquisition Collector vs. Dharamvir: Supreme Court Overrules Land Lapse Under Section 24(2) of 2013 Act

The Supreme Court of India, in its judgment dated December 9, 2022, in the case of Land Acquisition Collector (South East) vs. Dharamvir & Others, overturned the Delhi High Court’s ruling that had declared land acquisition proceedings lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement Act, 2013.

The Supreme Court ruled that the High Court erroneously relied on the overruled decision in Pune Municipal Corporation vs. Harakchand Misirimal Solanki and reaffirmed the principle established in Indore Development Authority vs. Manoharlal. The Court held that land acquisition proceedings do not lapse if possession has been taken or if compensation has been tendered, even if deposited in the treasury instead of being paid directly to the landowners.

Background of the Case

The dispute arose from land acquisition proceedings initiated under the Land Acquisition Act, 1894. The Government of Delhi acquired land for public purposes, with possession being taken on March 16, 2004. However, due to disputes regarding ownership and compensation, the amount was not directly paid to all landowners but was instead deposited in government accounts.

The respondents challenged the acquisition before the Delhi High Court, arguing that since compensation had not been paid to them, the proceedings should be deemed to have lapsed under Section 24(2) of the 2013 Act. The High Court, relying on Pune Municipal Corporation, ruled in favor of the landowners and declared the acquisition lapsed. The Land Acquisition Collector (South East) then appealed this decision before the Supreme Court.

Arguments Presented

Petitioners’ (Land Acquisition Collector) Arguments

The Land Acquisition Collector, represented by its counsel, argued:

The Delhi High Court had relied on Pune Municipal Corporation, which was overruled by the Constitution Bench in Indore Development Authority.
Possession of the land was taken on March 16, 2004, and once possession is taken, the land vests with the government, making the acquisition final.
Compensation was deposited in the treasury, and the Supreme Court has held that such deposit is a valid compliance with payment obligations under the 1894 Act.
Non-payment of compensation directly to landowners does not automatically lead to the lapse of acquisition proceedings.

Respondents’ (Dharamvir & Others) Arguments

The respondents, represented by their counsel, countered with the following points:

Compensation had not been paid to the landowners, and under Section 24(2) of the 2013 Act, the acquisition should be considered lapsed.
The High Court correctly ruled in favor of the landowners, emphasizing the importance of timely compensation.
The government’s failure to compensate the landowners before January 1, 2014, invalidated the acquisition under the 2013 Act.

Supreme Court’s Observations

The Supreme Court reviewed the case and observed:

“Possession of the land in question was taken and handed over to the government on 16.03.2004. Once possession is taken, the land vests in the state, and the acquisition cannot lapse.”
“The High Court erroneously relied on Pune Municipal Corporation, which has been explicitly overruled by the Constitution Bench in Indore Development Authority.”
“For acquisition to lapse under Section 24(2) of the 2013 Act, both possession must not have been taken, and compensation must not have been paid. If either condition is met, the acquisition remains valid.”

Legal Interpretation of Section 24(2) of the 2013 Act

The Supreme Court, in Indore Development Authority, provided clarity on how Section 24(2) should be interpreted:

The lapse of land acquisition proceedings requires both non-payment of compensation and failure to take possession.
Depositing compensation in the treasury or court is sufficient compliance with the legal requirement of payment.
Landowners who refuse to accept compensation or seek higher compensation through legal proceedings cannot claim that acquisition has lapsed.
Once possession is taken, land vests in the state, and acquisition cannot be reversed under Section 24(2).

Judgment and Ruling

The Supreme Court ruled in favor of the Land Acquisition Collector and held:

The Delhi High Court’s judgment was quashed and set aside.
The land acquisition proceedings were upheld as valid and not deemed to have lapsed.
The ruling in Indore Development Authority was reaffirmed as the authoritative interpretation of Section 24(2) of the 2013 Act.

Implications of the Judgment

This ruling has wide-ranging implications for land acquisition cases in India:

The Supreme Court reaffirmed that mere non-payment of compensation does not nullify land acquisition.
Government authorities can rely on the clarity provided by the Court regarding Section 24(2) of the 2013 Act.
Public infrastructure projects that were stalled due to legal challenges may now proceed without unnecessary delays.

Conclusion

The Supreme Court’s decision in Land Acquisition Collector (South East) vs. Dharamvir & Others reinforces the legal position that once possession of land has been taken, the acquisition cannot lapse. By upholding the acquisition and quashing the Delhi High Court’s ruling, the Court has ensured that landowners do not unfairly benefit from procedural delays and that public projects can continue without legal hurdles. This judgment sets a crucial precedent for future land acquisition cases and provides clarity on the application of Section 24(2) of the 2013 Act.

Petitioner Name: Land Acquisition Collector (South East).
Respondent Name: Dharamvir & Others.
Judgment By: Justice M.R. Shah, Justice C.T. Ravikumar.
Place Of Incident: Delhi.
Judgment Date: 09-12-2022.

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