Supreme Court Overrules Land Acquisition Lapse: Key Ruling on Compensation and Possession

The Supreme Court of India, in the case of Government of NCT of Delhi & Others vs. Krishan Kumar & Others, overturned the Delhi High Court’s decision, which had declared the land acquisition process as lapsed under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement Act, 2013. The ruling reaffirms the principle that land acquisition does not lapse merely due to non-payment of compensation when possession has already been taken.

Background of the Case

The Government of NCT of Delhi had acquired land in Village Molarband through a notification under Section 4 of the Land Acquisition Act, 1894, on April 4, 1964. An award was passed on October 19, 1981, and possession of the land was taken on April 10, 1997. However, compensation was not paid to the landowners.

Read also: https://judgmentlibrary.com/supreme-court-upholds-land-acquisition-key-ruling-on-compensation-and-possession/

In 2015, the landowners filed a writ petition before the Delhi High Court, seeking relief under Section 24(2) of the 2013 Act, arguing that the acquisition had lapsed due to non-payment of compensation. The High Court relied on the Supreme Court’s earlier ruling in Pune Municipal Corporation vs. Harakchand Misirimal Solanki (2014), which held that acquisition lapses if compensation is not paid.

The Delhi High Court ruled in favor of the landowners, declaring the acquisition lapsed. The Government of NCT of Delhi challenged this ruling before the Supreme Court.

Arguments by the Appellants (Government of NCT of Delhi & Others)

• The government contended that possession of the land had already been taken on April 10, 1997, and handed over to the Delhi Development Authority (DDA).
• They argued that non-payment of compensation alone does not result in a lapse of acquisition under the 2013 Act.
• The appellants cited the Supreme Court’s Constitution Bench ruling in Indore Development Authority vs. Manoharlal (2020), which overruled the Pune Municipal Corporation decision.
• The government emphasized that the landowners had acknowledged in their petition that possession had been taken, as they sought a return of the land.

Arguments by the Respondents (Landowners)

• The landowners argued that since compensation had not been paid, the acquisition had lapsed under Section 24(2) of the 2013 Act.
• They relied on the Pune Municipal Corporation decision, which had held that non-payment of compensation within five years led to automatic lapse of acquisition.
• The respondents maintained that they had not received the compensation due to them and, therefore, should be entitled to reclaim their land.

Supreme Court’s Analysis and Judgment

The Supreme Court examined the Constitution Bench ruling in Indore Development Authority, which clarified the interpretation of Section 24(2) of the 2013 Act. The key takeaways from that ruling were:

• Possession Matters: If possession has been taken, the acquisition does not lapse merely due to non-payment of compensation.
• Reading ‘or’ as ‘and’: The word ‘or’ in Section 24(2) must be read as ‘and,’ meaning both possession and compensation must be absent for acquisition to lapse.
• Compensation Tendering is Sufficient: If compensation is tendered but not accepted, the acquisition remains valid.
• No Automatic Lapse: Non-payment of compensation alone does not invalidate acquisition; it only entitles the landowner to compensation under the 2013 Act.

The Supreme Court ruled:

“In the present case, while allowing the writ petition, the High Court has mainly relied upon the decision of this Court in Pune Municipal Corporation, which decision has been overruled by the Constitution Bench decision of this Court in Indore Development Authority. The impugned judgment and order passed by the High Court declaring that the acquisition with respect to the lands in question is deemed to have lapsed under Section 24(2) of the Act, 2013 is unsustainable.”

Final Verdict

• The Supreme Court set aside the Delhi High Court’s judgment.
• The land acquisition process was upheld as valid, dismissing the landowners’ claims.
• The ruling reinforced that possession, once taken, ensures that land acquisition remains valid even if compensation is delayed.

This decision provides a clear precedent for interpreting Section 24(2) of the 2013 Act, ensuring that infrastructure projects and urban development initiatives are not hampered due to procedural delays in compensation disbursal.

Read also: https://judgmentlibrary.com/supreme-court-quashes-high-court-order-on-land-acquisition-in-delhi/

Petitioner Name: Government of NCT of Delhi & Others.
Respondent Name: Krishan Kumar & Others.
Judgment By: Justice M.R. Shah, Justice C.T. Ravikumar, Justice Sanjay Karol.
Place Of Incident: Delhi.
Judgment Date: 16-02-2023.

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