Land acquisition won’t lapse if compensation is deposited, says SC

Ali Corbett


The Supreme Court Friday held that disputes over land acquisition and payment of fair compensation to owners cannot be re-opened under the 2013 Act if the legal processes have been completed before January 1, 2014.


A five-judge Constitution bench interpreted section 24 of the ‘Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013’ as there were two conflicting verdicts by different benches of the apex court on the issue.


Section 24 of the Act deals with situations under which a land acquisition proceedings shall deemed to have been lapsed.


The provision said that if no award of compensation has been decided in a land acquisition case by January 1, 2014, then the provisions of 2013 Act will apply in determining the compensation for acquisition of land.


The provision also says that if an award has been announced prior to the cut-off date, then the land acquisition proceedings shall continue under the 1894 Act.


Interpreting the provision, a bench headed by Justice Arun Mishra said, “Section 24(2) of the Act of 2013 does not give rise to new cause of action to question the legality of concluded proceedings of land acquisition. Section 24 applies to a proceeding pending on the date of enforcement of the Act of 2013, i.e. January 1, 2014.”

“It does not revive stale and time-barred claims and does not reopen concluded proceedings nor allow landowners to question the legality of mode of taking possession to reopen proceedings or mode of deposit of compensation in the treasury instead of court to invalidate acquisition,” said the bench, also comprising Justices Indira Banerjee, Vineet Saran, M R Shah and S Ravindra Bhat.


The bench also overruled the earlier judgements rendered by the top court on the issue.


The bench said under the provisions of Section 24(1)(a) of the Act, if the award is not made as on January 1, 2014, there is no lapse of proceedings and compensation has to be determined under the provisions of 2013 law.


“In case the award has been passed within the window period of five years excluding the period covered by an interim order of the court, then proceedings shall continue as provided under section 24(1)(b) of the Act of 2013 under the Act of 1894 as if it has not been repealed,” it said.


It said the deemed lapse of land acquisition proceedings under section 24(2) of the 2013 Act takes place where due to inaction of authorities for five years or more prior to commencement of the law, the possession of land has not been taken nor compensation has been paid.


“In other words, in ca se possession has been taken, compensation has not been paid then there is no lapse. Similarly, if compensation has been paid, possession has not been taken then there is no lapse,” it said.




The top court said a land owner cannot insist that the compensation must be deposited in court or the acquisition under the 1894 Act would fail. Mere tendering of the compensation, it said, was enough.


The bench held that the expression ‘paid’ in the main part of section 24(2) of the 2013 Act does not include a deposit of compensation in court.


“The consequence of non-deposit is provided in proviso to section 24(2) in case it has not been deposited with respect to majority of land holdings then all beneficiaries (landowners) as on the date of notification for land acquisition under Section 4 of the Act of 1894 shall be entitled to compensation in accordance with the provisions of the Act of 2013,” it said.


“The provisions of section 24(2) providing for a deemed lapse of proceedings are applicable in case authorities have failed due to their inaction to take possession and pay compensation for five years or more before the Act of 2013 came into force, in a proceeding for land acquisition pending with concerned authority as on January 1, 2014,” the bench said.

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