Right to Fair Compensation Act 2013
In this article I propose to deal with interpretation of Sec 24 of the Act, with particular emphasis on its impact on pending proceedings. I wish to begin with posing two questions; which perhaps will also be concluding part; leaving it to the wise counsel of the READER.
Whether the concept of statutory deemed lapsing of Acquisition Proceedings under Sec 24(2) of the Act 30/2013, which are commenced under Land Acquisition Act of 1894 for non-fulfillment of condition stipulated therein illusory?
Whether the provisions of Sec 24 of Act 30/2013 are applicable to acquisition proceedings commenced under the state enactments like Karnataka Industrial Area Development Act 1966 or Bangalore Development Authority Act 1976, (in so far as Karnataka state is concerned)?
In order to answer these questions, one should make reference to certain specific provisions of Land Acquisition Act of 1894 and that of Act 30 of 2013.
Land Acquisition Act of 1894 (in short LA Act of 2013)
Let me commence with LA Act of 1894. This enactment is an exclusive piece of legislation meant for acquisition of private properties for the public purpose. Sec 4 of LA Act of 1894 Act deals with issuance of a preliminary notification, proposing to acquire property for any public purpose. This notification contains the name of the owner of property; as found in Revenue Records; the description of the property; extent of property etc.
The property-land owner as notified is granted time to file his objections if any to the proposed Acquisition within 30 days. The Land Acquisition Officer, after considering the objectives and giving the owner, an opportunity of hearing and pass orders, (confirming) upholding the objections or overruling the objections; and send the report to the acquiring BODY. It is there after that the acquiring body will issue final notification; or a declaration of acquisition of the properties enumerated in the preliminary-notification, under Sec 6 of the LA Act of 1894. The same shall be published in the gazette, mentioning the names of owners, the description of property; extent of property etc. There after notice of award proceedings will be issued and after considering the claims if any, shall pass an award determining the compensation payable to the land looser.
Once the award is passed, the amount of compensation payable is tendered to land looser and in case he refuses to receive, the same shall be deposited in the reference court; as envisaged in Sec 31 of the Act. Under Sec 34, if there is delay in payment of compensation, interest shall be payable as per Sec 34, only when compensation is not paid or deposited.
In short this is the scheme of Acquisition under 1894 Act. What is important to note is that there is no lapsing of acquisition proceedings once an award is made; and delay in payment or deposit in court will attract additional interest.
The provisions of Sec 6 and 114 of 1894 Act have inbuilt measure to avoid delay in acquisition proceedings viz. sec 6 notification to be published in one year and award to be passed within 2 years thereafter under sec 11-A of the 1894 Act.
After coming into force of Act 30/2013, the LA Act stood repealed. Sec 11-A of this Act deals with Repeal and Savings.
Apart from this Section, Sec 24 of the same Act saves certain proceedings; notwithstanding Repeal of 1894 Act; and permits continuation of proceedings commenced under 1894 Act, as if the L.A Act of 1894 is not repealed.
Sec 24 of the Act 30/2013 speaks of Land Acquisition process under Act 1 of 1894 shall be deemed to have lapsed.
Sec 24(1) of the Act, commences with a non obstante clause, viz; notwithstanding anything contained in this Act. 24(1) (a) says in cases of acquisition proceedings initiated under LA Act of 1894, where no award is made under Sec 11 then all provisions of Act 30 of 2013 Act relating to determination of Compensation shall apply OR Sec 24(1)(b) says where award is made under Sec 11, then proceedings under the LA Act of 1894 shall continue as if the said Act is not repealed.
What has to be noticed here is that in case award is not made, proceedings will continue to complete the remaining process of considering objections, issuance of final declaration, notice of claim under the 1894 Act; but provisions of Act 30/2013 will apply for the limited purpose of determining the compensation; as its application is restricted to determination of compensation. In case award is made; proceedings will continue under 1894 Act, as if the said Act is not repealed.
Here again, recourse to Sec 31 and 34 is available to the acquiring authority and there is no lapsing under 1894 Act:
Sub Sec(2) of Sec 24, starts with a non-obstante clause, in a limited sense; in that it has superior efficiency over sub section (1) only; when it begins with:- notwithstanding anything contained in Sub sec(1).
Further this Sub section says, where an award is made under Sec 11 of 1894 Act, five years or more prior to the commencement of Act 30/2013, but the physical possession of the Land is not taken;
The compensation has not been paid, the proceedings shall be deemed to have lapsed.
Here are a couple of issues that emerge for consideration:
First let me examine the true meaning and content of Sub Sec (2) of Sec 24.
I will begin with title heading of Sec 24. "Land Acquisition Process under Act No 1 of 1894 shall be deemed to have lapsed in certain cases.
Though title headings are not the determinative factor for interpretation of the said provision but the first impression is that the section mainly deals with lapsing. Yet again this impression is a mere presumptive value. Nevertheless, this has some meaning in understanding the scope of the section. Be that as it may be, I proceed to analyze the provision of Sec 24(2).
Sec 24(2), is an exception to Sec 24(1)(b) and not to 24(1) in its entirety, the reason being; 24(1)(a) refers to a situation where proceedings of acquisition having been commenced and no award is made under Sec 11 of 1894 Act and both Section 24(1)(b) and Section 24(2) speaks of situations, and indicates as to how to proceed further after passing of award under Sec 11.
When Section 24(1)(b) says proceed under LA Act of 1894, notwithstanding its repeal, in case award is made whereas Section 24(2) says, under Section 11 of the 1894 Act if the award is more than 5 years old; and if conditions enumerated there in are not complied, the proceedings lapse.
Basic requirement is as on date of commencement of the Act 30/2013, award should have been passed; In view of non-obstante clause in limited sense in Section 24(2), the said Section 24(2) has to be interpreted or understood as an exception to Section 24(1)(b) only; and not for Section 24(1) in entirety.
The next question to be examined is:
Under what circumstances, the Acquisition proceedings lapse; even after award is made under Sec 11 of LA Act of 1894.
In order to understand this question; I deem it proper to recollect certain basic principles of interpretation of statutes.
(II) When two negative conditions are joined by the word OR Whether the interpretation should be conjunctive or disjunctive.
In Sec 24(2) [ which is an exception to Sec 24(1)(b)] two negative conditions are:
This is a case of two negatives joined by or separated by the word OR.
In case of two positive conditions being joined by the word 'OR' it should be read as alternatives; namely either or and not as AND.
In cases where two negative conditions are on the either side of the word OR; several authoritative pronouncements say, it should be read as AND; meaning thereby; both the conditions should exist or are to be satisfied.
Applying this principle of interpretation Section 24(2) must be understood as:- deemed lapsing receives place where award is made 5 years or more prior to commencement of the Act 30/2013, and neither possession of the lands is taken nor compensation is paid. To put is differently if, physical possession of the land/all lands acquired is/ are not taken
Compensation for all lands, in terms of the award is not paid.
To explain further,
There are several cases, where, possession is taken but compensation is not at all paid to anyone, not only there is no lapsing, but proceedings will continue under 1894 Act, as if it is not repealed. Section 114 has no application, as Section 24(1) starts with a non-obstante clause, giving superior efficacy to the said provision over all other provisions of Act 30/2013; Section 114 obviously included.
IS NOT DEEMED LAPSING ILLUSIORY.
Further, they- land loosers will not also get compensation under the new Act. In order to get the benefit of getting compensation under Act 30 of 2013, at least one person's case amount should have been deposited.
True, the proviso to Section 24 (2) makes a further exception, in that, if compensation is not deposited in majority holdings, all land loosers whose lands are notified under Section 4 of the Land Acquisition Act of 1894, all the land loosers – including those who have already taken compensation are also entitled to take compensation under the Act 30 of 2013, i.e. compensation calculable under Act 30 of 2013 less already paid.
Getting compensation under new act (Act 30 of 2013) which is higher, depends upon atleast payment must have taken place in case of one land looser.
Irony of such situations is that, even in respect of 49.99 percentage of land holders, deposit is made, they will again get compensation under the New Act, 2013, along with remaining land loosers; getting double benefit. When Section 24(1)(b); Section 24(2) and proviso thereunder are read together, it can be summed up as-
Proviso says, or rather can interpreted to say; even if possession is taken in respect of awards made 5 years or more prior to new act 30 of 2013; but nothing is paid, proceed under the old act. However, if compensation is not paid to majority, pay under New Act 30 of 2013 to all. So much so, for a beneficial legislation, LAPSING is remote or Illusory, receipt of ADDITIONAL COMPENSATION under New Act 30 of 2013 is a dangling carrot.
Call it literal construction, beneficial, call it purposive and harmonious, call it therapeutical and not surgical, call it progressive, call is prejudicial??????
The Apex Court in the Indore Development Authority vs Manohar Lal and ors, decided on 06.03.2020, has held that for lapsing,
Coming back to the word 'paid', which is found in Section 31(2) and "deposited" word in Section 34 of LA Act, 1894;
First there should be a tender of compensation to the land looser and on refusing to receive, it shall be deposited in reference court. [Section 34 (1) and (2)]. On refusal to receive the compensation tendered and if the amount is not deposited in reference court; then under Section 34 there is a liability to pay interest, 'paid' refers to tender and on refusal deposit. Here again there is no question of lapsing, but interest liability mounts.
Section 24(2) uses the word 'paid', which should, in its true sense and literal construction, is actual payment, on refusal to receive; there is no procedure prescribed in this section as is found in Section 31(1) and (2).
Hence it is held that a person, to whom compensation is tendered, and he refuses to receive, cannot raise a plea of deemed lapsing. He cannot take advantage of his own fault.
Tendering the amount to the land looser is not a condition precedent, but deposit in the account of the beneficiary is mandatory.
By applying the 'theory of prejudice', purposive and harmonious construction is pressed into service to hold that if it is deposited, in the treasury, in the name of the land looser, it amounts to satisfaction of the second condition; yet another reason is that deposit in treasury, in land owner's name or his account; cannot be touched by acquiring body and that the said sum is always available to the land looser to withdraw if he wants to do so without prejudice to seek enhancement.
Merely keeping with acquiring authority and depositing in the treasury or account in favour of land looser; is treated on par with depositing in court. Prejudice theory or doctrine is applied
The next issue I wish to examine is the position of PROVISO under 24(2). The Apex Court in Indore Development case has unanimously ruled that the proviso should be understood as a proviso to Sec 24(2) and not to 24(1)(a)(b) of the Act 30/2013. Proviso does not refer to an award having been made five years or more before coming into force of new act.
Three things need attention are: -
There are conflicting opinions expressed by Apex Court in Delhi Metro Rail Corporation Ltd and Delhi Development Authority Case [2018(14) SCC 161 and; respectively 2019 SCC Online SC 279].
The Constitution Bench unanimously held that proviso is a part of Section 24(2).
One of the main reasons, among others appears to be that there is a FULL STOP after Section 24(1)(b) i.e, at the end of Section 24(1)(b), suggesting that it has to be read as a part of Sec 24(2) as, after Section 24(2), before the proviso there is a COLON:
This finding is given; after holding that Section 24(2) is an exception to Section 24(1)(b).
The question is what is the status of a proviso to a sub-section which is held to be an exception to a sub-clause of an earlier subsection; not withstanding FULL STOP and a COLON.
The Apex Court, justified its interpretation; that Proviso is to be read under Section 24(2) is that, if it is placed with Section 24(1)(b) it destroys the meaning attributable to Section 24(1)(b).
Yet another assumption is that if possession is not taken in cases where award is five years or more prior to Act 30/2013, then compensation has to be paid under new Act.
Further the reasoning in para 188 of the judgement to reflect the contention that Section 24(1) and 24(2) deal with two different subjects; in that Section 24(1) deals with compensation and Section 24(2) deals with lapsing, is too fragile and not SOUND. To say Section 24(2) also deals with compensations, with utmost respect is incorrect; in as much as mere presence of a condition that "no compensation is paid" will lead to such conclusion is even more fragile.
Having quoted two judgements in 1965(1) SCR 276 and 1967(1) SCR 831; the principle enunciated therein, is not fully adopted; as otherwise reasoning and conclusion would have been different:
In order to appreciate or depreciate my respectful submissions, I wish to quote the sentences to justify ……….. statement supra.
1965(1) SCR 276:
Para 14 "…… so far as a general principle of construction of a proviso is concerned, it has been broadly stated that the function of a proviso is to limit the main part of the section and carve out something which, but for the proviso, would have been with in the operate part…."
1967(1) SCR 831:
Para 5 "…… it is well recognized that a proviso is added to a principal clause, primarily with the object of taking out of the scope of that principal clause what is included in it and what the legislature desires should be excluded…."
Whereas in the case of commissioner of commercial taxes, Board of Revenue Madras and another Vs Ramkrishnan Srikrishnan Jhaver etc, reported in AIR 1968 SC 50; the Apex court in Para 8, has held as under 8. "…. Generally speaking it is true the proviso is an exception to the main part of the section; but it is recognized that in exceptional cases a proviso may be substantive provision itself….".
Further the Apex court, in the case of Sundaram Pillai & Others Vs Pattabhiraman and others; reported in (1985)1SCC 591, has ruled in cases of provisos and explanations; in Para 27, that a proviso has three separate functions: however, one of the three separate functions namely: it can be a substantive provision itself; This function is not referred to in the judgment.
I would with utmost respect, refer to interpretations of statutes by Shri Sarathi; in pages 294-295. He has collated the various principles of interpretation as under;
Though several judgments are quoted with approval and several authors commentary are referred to;
The conclusion reached by Apex court; which utmost respect, that proviso under Section 24(2) is not a proviso to Section 24(1) (b), is not sound. In other words, Section 24(2) being an exception to Section 24(1)(b)[clearly held so] and placing proviso under Section 24(2)only does greater harm than benefit the land looser, under a beneficial legislation.
Let me explain; at the outset, if I am repeating, please bare with it; Section 24 is a scheme evolved or enacted to, how best a beneficial legislation must give a respite to land loosers. This scheme speaks of:
As already discussed earlier, I wish to concisely state once again, to maintain a sequence.
Deemed lapsing of Acquisition proceedings:
On a purposive interpretation and harmonious construction, it is authoritatively held that both conditions are to be read together for lapsing.
This section only declares the effect of such contingencies not happening, (both of them) then acquisition lapses.
If acquisition does not lapse, when any of the conditions is either fully or partly done; then one has to revert back to Section 24(1)(b). Section 24(2) does not speak of determination of compensation as is spoken in Section 24(1)(a) or deducible under Section 24(1)(b) (proceedings after award under Section 11 to go on, meaning- hear claims and determine compensation).
Section 24(2) only speak of effect of non-payment of compensation along with possession not taken.
Therefore Section 24(2) is declaratory in nature; a statutory declaration; as the words are deemed to have lapsed. There is no requirement of such declaration by any court or authority if so empowered.
If an award is made more than 5 years before 01.01.2014, on which date the New Act 30/13 came into force and possession alone is taken and not a PIE is paid as compensation; there being no lapse; one has to fall back on Section 24(1)(b) only.
If proviso is not there; or in the absence of the proviso; and where the Land Acquisition proceedings do not Lapse (if being an exception to Section 24(1)(b), the land looser will get compensation under LA 1894 Act pursuant to an award).
Imagine if the award is more than five years old and does not lapse, and if majority is paid compensation; say 50.01 percent is paid pursuant to award under Section 11; Proviso cannot operate. So, proviso, therefore attaches an obligation on acquiring authority to pay as per New Act, only if majority is not paid, and further, it does not apply if no one is paid; because it say: 'if majority is not paid'- meaning someone should have been paid.
In conclusion it should be interpreted harmoniously; when lapsing is almost illusory, acquiring body cannot get away with payment of compensation lesser under Old Act [Section 24(1)(b)] and also when it is more than 5 years, if it did not lapse;
Hence the proviso under Section 24(2) commands to pay, as an exception to Section 24(1)(b), where award is more than 5 years old and does not lapse, "but atleast one person is paid".
Section 24(1)(b), said proceed to decide and pay as per 1894 Act. Exception; If it is older than 5 years and 2 conditions not fulfilled; no lapsing. If there is no lapsing, award having been made; and Section 24(1)(a) not being applicable; one has to get back to Section 24(1)(b). If exception is not applicable, fall back on the main provision.
I would most respectfully submit that keeping in mind principles of interpretation, object of beneficial legislation and fact that acquiring body cannot get away with paying lesser compensation in respect of acquisition where awards are made long time back by paying additional interest.
Though the proviso does not contain the words "Where the award has been made five years or more prior to commencement of this New Act(of 30/2013)" treating the proviso as an independent provision a sub section as (3) and by interpretation; iron out the creases, remove crumples, maintain the fabric; It is not adding words by any stretch of imagination, but removing crumpled expression and give a meaningful interpretation to the legislative intent, on account of poor draftsmanship.
Incidentally Karnataka legislature amended and added those words in the proviso, by Act 16/2019 w.e.f 23.07.19.
Easiest way should have been:
Section 24(1)(d)- where no lapsing in case of awards older than five years;
Ask state to pay additional compensation as per Act, to all, if majority not paid.
The second question which I proposed relates to applicability of Section 24 to acquisition proceedings initiated under other legislations; other than Land Acquisition Act I of 1894, including state enactments under List II of VIIth schedule to the Constitution Of India.
Entry 42 of Concurrent List, after its substitution w.e.f 01.11.1956 reads as under:
42/List III- "Acquisition and requisition of property". State enactments like Karnataka Industrial Area Development Act 1966, Bangalore Development Act 1976 are traceable to fields of legislation in Entry 24 and Entry 5 of List II respectively of the VIIth Schedule to the Constitution of India.
Prior to 01.11.1956, Entry 36 of List II of VIIth schedule related to acquisition and requisition of property except for union; and subject to entry 42 of List III, which then was in respect of principles of determination of compensation for acquisition and requisition of property for Union or State or for any other public purpose.
By virtue of Constitutional VIIIth Amendment, w.e.f 01.11.1956, Entry 36 of List II is deleted and Entry 42 of List III is amended.
However, Entries 5 and 24 always remained within the fields of legislation under State List.
However, state enactments made under Entry 5 or 24, are not legislations per se for acquisition, but for development of Industrial Areas and the cities etc., and acquisition is incidental. Hence those enactments cannot be treated as laws for acquisition of properties.
Acquisition and requisition of properties is a field of legislation in concurrent list, both Parliament and State Legislature can legislate on the said field- loosely worded- on the said subject.
Article 245 of the Constitution, speaks of exclusivity to legislate to Parliament and State in respect of entries in Union List and State List respectively. If or any trenching upon into other sphere, excluding incidental trenching is treated as void, on the principle of "OCCUPIED FIELD".
In view of Art 254; any legislation made by Parliament, has superior efficiency over State Legislation, if there is a conflict, provided both the enactments are traceable to List III.
However, State Legislature can have superior efficacy within the state, if it makes any changes by way of amendment to central law by obtaining President's assent.
State enactments, under Entry 5 & 24, of List II being not in concurrent list, question of applicability of Article 254(2) does not arise.
Incidentally, the Constitutional Validity of Maharashtra Industrial Area Development Act is upheld by Apex Court.
The next aspect to be seen is the procedure prescribed for determination of compensation under state enactments which are traceable to Entries 5 and 24 of List II.
Assuming that the state enactments refer to provisions of LA Act of 1894, for purposes of determination of compensation mutates mutandis, which falls under the "DOCTRINE OF INCORPORATION". Then the legal principle and Apex Court dictum will guide to say that even a repeal or amendment of such provisions incorporated in state Acts, the amended version cannot be pressed into service, and what is incorporated will remain incorporated, as if written in pen and ink; which is due to draftsman's skill or laziness any change in incorporating act, into incorporated act, will not result in applying such changed law. Even if parents die, offspring survives.
Principles of Law on: Legislation by incorporation and by reference:
Wherever there is incorporation of provisions from Act 'A' into Act 'B'; and all of it is treated as if written in Act 'B'.
Any charge, addition or deletion of those provisions including wiping out of those provisions in Act 'A' will not affect Act 'B' in whatever manner.
On the other hand, if its case of Legislation by reference; Example-provisions of Act 'A', will apply in as far as practicable in Act 'B', then any changes to those provisions in Act 'A' will automatically apply in Act 'B'.
However, in the case of State of Madhya Pradesh Vs M.V. Narasimhan, [AIR 1975 SC 1835/ 1976 SCR (1) 6] the Apex court, held that after incorporation, the offspring namely the incorporated provisions, survives even if the previous act is repealed, amended, declared nullity or completely erased.
Though the Apex Court in the same case carved out four exception to the said principle of interpretation, reference may not be relevant for the purposes for this question of applicability of Section 24 to Acquisition proceedings, other than under L.A Act 1894, in view of legal position that both sections 24(1) and (2) including proviso, refers to initiation of acquisition proceedings specifically under the LA Act, 1894.
What is sought to be stated here is that in these enactments, if there is a reference by incorporation to the provision of L.A Act by virtue of repeal of L.A Act 1894, under Act 30/2013; and enactment of new act; the provisions of Section 24 will not apply to those acquisition proceedings; in as much those state enactments will continue to hold the field in respect of Acquisitions of lands for the purposes of those State Acts.
Secondly Section 24(1) and 24(2) categorically refer to acquisition proceedings initiated under L.A Act 1 of 1894, pending as on 01.01.2014, and the consequences that follow depending on the stage at which they are; on the said date. By virtue of literal interpretation and purposeful and harmonious construction, the provisions of the Act 30/2013 in general and Sec 24 in particular do not apply to proceedings initiated under any other enactment, be it state Act or Central Act.
Though this contention of inapplicability of Section 24 to KIADB Act, acquisition is upheld by Apex Court in the case of Land Acquisition Officer vs Anusuya Bai [2017(3) SCC 313].
I am afraid there is no detailed reasoning in the said judgment.
I am of the considered opinion that the answer to the two questions I posed are as under;
Part A and B, with reference to two questions raised are answered accordingly.
What about You? Do you Agree? Disagree? Please enlighten me and I am open to correction.
Views Are Personal Only