Supreme Court Upholds Land Acquisition Despite Delay in Compensation Payment

The Supreme Court of India recently ruled on a critical land acquisition case, Land and Building Department Through Secretary & Anr. v. Attro Devi & Ors., involving a dispute over compensation for land acquired for the development of the Delhi-Saharanpur-Dehradun Highway. The Court clarified the application of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement Act, 2013 (2013 Act), and overruled the High Court’s decision which had deemed the acquisition to have lapsed. The case is significant for its interpretation of legal timelines and the requirement of possession under the 2013 Act.

Background of the Case

The land in question was sought to be acquired for the Delhi-Saharanpur-Dehradun Highway under the provisions of the Land Acquisition Act, 1894, with notifications issued on June 23, 1989, under Section 4 and June 20, 1990, under Section 6 of the Act. The award for compensation was announced on June 19, 1992, but the landowners, including the respondents, did not receive compensation at that time. In 2017, the respondents filed a writ petition before the High Court invoking Section 24(2) of the 2013 Act, claiming that the acquisition had lapsed because compensation had not been paid to them, and possession of the land had not been formally taken.

The appellant (Land and Building Department) contended that possession of the land was taken on December 6, 2012, and handed over to the Delhi Development Authority (DDA), but the compensation could not be paid due to the landowners not coming forward to claim it. The High Court ruled in favor of the respondents, invoking the provisions of Section 24(2) and declaring that since compensation had not been paid, the acquisition had lapsed.

Petitioner’s Arguments (Land and Building Department)

The appellant argued that the acquisition process was completed, with possession of the land taken on December 6, 2012, and handed over to the DDA.
According to the appellant, compensation could not be paid to the respondents as they had not come forward to claim it, which does not constitute a lapse of the acquisition under Section 24(2) of the 2013 Act.
The appellant relied on the judgment in Indore Development Authority v. Manoharlal (2020) 8 SCC 129, which had clarified that the acquisition process does not lapse if possession is taken, even if compensation has not been paid.
The appellant further contended that the land in question was required for a national highway project, which should be prioritized over the procedural delays in compensation.

Respondent’s Arguments (Attro Devi & Ors.)

The respondents argued that as per Section 24(2) of the 2013 Act, since compensation had not been paid and possession had not been taken, the acquisition had lapsed.
The respondents also emphasized that the compensation process was incomplete, and the respondents had not been compensated despite the formal notification of the acquisition process many years ago.
The respondents cited the High Court’s ruling, which followed the interpretation of Section 24(2) and upheld the lapse of the acquisition due to non-payment of compensation.

Supreme Court’s Observations

The Court observed that the key issue in this case was whether the acquisition had lapsed due to non-payment of compensation, despite possession of the land being taken.
The Court referred to the Constitution Bench decision in Indore Development Authority, where it was held that the acquisition does not lapse if possession has been taken, even if compensation has not been paid. The Constitution Bench had clarified that either taking possession or paying compensation is enough to prevent the acquisition from lapsing under Section 24(2).
The Court noted that the possession of the land in question had been taken and handed over to the DDA in 2012, and therefore, the acquisition could not be considered lapsed due to non-payment of compensation.
The Court highlighted that the respondents’ argument for a lapse based solely on non-payment of compensation was not tenable, as the legislative intent behind Section 24(2) was to prevent inaction on the part of authorities, which was not the case here.

Key Judicial Findings

The Court reaffirmed that the acquisition process under Section 24(2) of the 2013 Act does not lapse if possession is taken, even if compensation has not been paid, citing Indore Development Authority.
The Court further clarified that the failure to pay compensation to landowners cannot automatically lead to the lapse of the acquisition unless there has been inaction for five years or more before the commencement of the 2013 Act, which was not applicable in this case.
The Court emphasized the importance of adhering to the provisions of the 2013 Act while ensuring that ongoing national projects are not delayed due to procedural lapses.

Final Judgment

The Supreme Court ruled in favor of the appellant, the Land and Building Department:

The Court set aside the High Court’s judgment that declared the acquisition to have lapsed.
The Court held that the possession of the land had been taken, and therefore, the acquisition remained valid despite the non-payment of compensation.
The Court directed the Land Acquisition Officer to ensure that compensation is paid to the respondents in accordance with the 2013 Act, while also allowing the national highway project to proceed.

Implications of the Judgment

The ruling has important implications for land acquisition cases across India:

Clarification of Section 24(2): The Court’s decision provides much-needed clarity on the application of Section 24(2) of the 2013 Act, specifically regarding the non-lapsing of acquisitions where possession has been taken.
Impact on Infrastructure Projects: The ruling ensures that large-scale infrastructure projects like highways are not delayed due to procedural issues in land acquisition.
Ensuring Fair Compensation: The decision stresses the importance of paying compensation to landowners but also balances it with the need to complete public projects.
Legal Precedent on Land Acquisition: The judgment strengthens the legal framework for handling disputes related to land acquisition, especially when compensation is pending but possession has been taken.

Conclusion

The Supreme Court’s ruling in Land and Building Department Through Secretary & Anr. v. Attro Devi & Ors. has reinforced the constitutional principles governing land acquisition while ensuring that public projects of national importance, like highways, are not hindered by legal technicalities. By clarifying that possession is the key factor in determining whether an acquisition has lapsed, the Court has provided a clear direction for similar cases in the future. The judgment ensures that landowners are compensated, while also protecting the interests of the state in completing vital infrastructure projects.

Petitioner Name: Land and Building Department Through Secretary & Anr..
Respondent Name: Attro Devi & Ors..
Judgment By: Justice Abhay S. Oka, Justice Rajesh Bindal.
Place Of Incident: Delhi, India.
Judgment Date: 11-04-2023.

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