Land Acquisition Lapse Reversed: Supreme Court Quashes Delhi High Court's Ruling

The Supreme Court of India recently set aside a Delhi High Court ruling that had declared land acquisition as lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (the 2013 Act). The case, National Capital Territory of Delhi & Ors. vs. Subhash Chander Khatri & Ors., reaffirmed the legal principle that once land possession has been taken and utilized by the government, there can be no lapse of acquisition, even if compensation has not been paid.

Background of the Case

The dispute concerned land in Delhi that was acquired by the government under the Land Acquisition Act, 1894. The original writ petitioner, Subhash Chander Khatri, approached the Delhi High Court, arguing that since compensation had not been paid, the acquisition should be deemed to have lapsed under Section 24(2) of the 2013 Act. The High Court ruled in his favor, declaring the acquisition null and void, while also holding that Khatri was entitled to compensation under the new law.

Challenging this ruling, the Government of Delhi and other appellants moved the Supreme Court, arguing that possession of the land had already been taken and utilized before the 2013 Act came into force. Thus, they contended, the acquisition could not be considered lapsed.

Key Legal Issues

The Supreme Court had to decide:

Whether non-payment of compensation alone could lead to a deemed lapse of land acquisition under Section 24(2) of the 2013 Act.
Whether possession taken by the government before the enactment of the 2013 Act could prevent the application of Section 24(2).
Whether the High Court erred in awarding compensation under the 2013 Act when acquisition had not lapsed.

Arguments by the Appellants (Government of Delhi & Ors.)

The government argued:

Possession Taken Before the 2013 Act: The land was already in government possession and had been put to use before the enactment of the 2013 Act. Therefore, the acquisition could not lapse.
High Court Misapplied the Law: The ruling in Pune Municipal Corporation v. Harakchand Misirimal Solanki (2014) was wrongly applied by the High Court, as it was later overruled in Indore Development Authority v. Manoharlal (2020).
Compensation Not the Sole Criterion: According to the Supreme Court’s decision in the Indore Development Authority case, possession being taken is a sufficient condition to prevent lapse of acquisition, regardless of whether compensation was paid.

Arguments by the Respondents (Subhash Chander Khatri & Ors.)

The original landowners argued:

Non-Payment of Compensation: Since compensation had not been paid, the acquisition should be considered lapsed under Section 24(2) of the 2013 Act.
Reliance on Previous Supreme Court Rulings: They relied on Pune Municipal Corporation (2014), which had held that both possession and payment of compensation were required to sustain an acquisition.
Fair Treatment to Landowners: The respondents contended that they should be entitled to compensation under the 2013 Act if the land acquisition was upheld.

Supreme Court’s Ruling

1. Possession Taken Prevents Lapse of Acquisition

The Supreme Court relied on its earlier ruling in Indore Development Authority v. Manoharlal (2020), which clarified that land acquisition does not lapse if possession has been taken before the enactment of the 2013 Act. The Court stated:

“Once possession of the subject land was taken over and even the land was put to use prior to the 2013 Act coming into force, as per the law laid down by this Court, there shall not be any deemed lapse of acquisition.”

2. Overruling Pune Municipal Corporation Case

The Court noted that the decision in Pune Municipal Corporation, which was relied upon by the High Court, had been expressly overruled in Indore Development Authority, stating:

“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) 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.”

Thus, if either possession was taken or compensation was paid, the acquisition would remain valid.

3. Compensation Under 2013 Act Not Applicable

Since the acquisition had not lapsed, the Court ruled that the High Court erred in directing that compensation should be paid under the 2013 Act. It clarified:

“In view of the above and once there shall be no deemed lapse of acquisition under Section 24(2) of the Act, 2013, the original writ petitioner shall not be entitled to the compensation as per the Act, 2013.”

Key Excerpt from the Judgment

In a conclusive statement, the Supreme Court held:

“The present appeal succeeds. The impugned judgment and order passed by the High Court is hereby quashed and set aside. The original writ petition filed by the respondent stands dismissed.”

Conclusion

The Supreme Court’s ruling reinforces the principle that possession being taken before 2014 prevents the application of Section 24(2) of the 2013 Act. This decision has significant implications for land acquisition cases, ensuring that projects are not unduly stalled due to misinterpretation of compensation requirements.

The judgment clarifies that landowners cannot challenge concluded acquisitions solely on the ground of non-payment of compensation, as long as possession has been taken. This ruling will provide greater certainty in land acquisition disputes, particularly in urban areas where infrastructure projects are often delayed due to litigation.

Petitioner Name: National Capital Territory of Delhi & Ors..
Respondent Name: Subhash Chander Khatri & Ors..
Judgment By: Justice M.R. Shah, Justice C.T. Ravikumar.
Place Of Incident: Delhi.
Judgment Date: 10-04-2023.

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