Land Acquisition: Supreme Court Lays Down Two Conditions For Pending Cases

The Supreme Court has delivered an important judgment impacting a large number of pending cases under the Land Acquisition Act of 2013, and clarified that under two conditions such cases will lapse and acquisitions will need to start afresh, if needed.

Broadly, landowners had argued that acquisitions under the Land Acquisition Act of 1894 have lapsed, and fresh proceedings must start under the new 2013 provisions. The apex court had to decide under what circumstances acquisitions under the old law can be said to be lapsed.

It has ruled that fresh proceedings under the new land acquisition law will need to be initiated only if:

• Possession of land hasn't taken place, and
• Compensation amount hasn't been paid to landowners. Here, payment of compensation not only means that money must be paid to landowners or deposited in court, but the amount deposited in a government treasury will also be considered, the court has said. This means even if the compensation amount was deposited with the government, fresh acquisition under the 2013 law will not apply.

“In other words, in case possession has been taken, and compensation has not been paid then there is no lapse. Similarly, if compensation has been paid, possession has not been taken, then [too] there is no lapse'' – Supreme Court Order

The top court's Friday judgment gave clarity on the status of pending cases of land acquisition when the 2013 law was introduced by Parliament, replacing the Land Acquisition Act of 1894. Landowners who have refused to accept the compensation under the 1984 law cannot take the benefit of deemed lapse of acquisition under Section 24 of the Land Acquisition Act of 2013, the court ruled.

The bench has also stated that in cases where landowners have refused to accept compensation during this period or have sought higher compensation, they cannot claim that compensation has not been paid and argue that the land acquisition process has lapsed.

This ruling by the five-judge constitution bench stems from a contradiction in two previous judgments on the Land Acquisition Act of 2013. Section 24(2) of the act deals with pending cases of land acquisition when the new provisions came into effect.

The new act held such acquisitions to be invalid and mandated a fresh process. Defining the meaning of ‘payment of compensation' was another contention under the new act.

In 2014, a three-judge bench headed by then Chief Justice RM Lodha had held that compensation must be either paid to landowners or deposited in the court for lands awarded under the 1894 act. Mere deposit of the amount in a government treasury won't be sufficient and will lead to a lapse of the land acquisition process under the 2013 act, the bench had ruled.

After four years of this being the law, another bench headed by Justice Arun Mishra said failure to deposit compensation in court won't result in a lapse of the land acquisition process. If the landowner had been offered compensation but has refused, then it cannot be held that there has been a failure to deposit the amount and such acquisition cannot be held to have lapsed as per Section 24(2) of the new law, the court had said in 2018.

The contradiction in the two rulings prompted Justice Mishra's bench in February 2018 to request Chief Justice Dipak Misra to set up a constitution bench to resolve this issue. On Oct. 12, the Chief Justice set up a five-judge bench comprising Justices Arun Mishra, Indira Banerjee, Vineet Saran, MR Shah and S Ravindra Bhat to decide this question of law. At the beginning of the hearing, however, objections were raised as Justice Mishra was part of a bench that delivered one of the conflicting judgments. But he had refused to recuse himself from hearing the case.

The Supreme Court judgment said the specific disputes in these cases should now be put in front of the appropriate bench as the constitution bench has clarified the law on this aspect.