SC Constitution Bench Commences Hearing To Resolve Conflicting Views On S.24 of Land Acquisition Act

As the Supreme Court called for deliberation the interpretation of section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act of 2013 on Tuesday, Solicitor General Tushar Mehta threw light on the content of the provision. 

"In this section, the legislature is providing what would happen to acquisition proceedings initiated earlier (under the Act of 1894). This is an exception to the rest of the Act in as much as it begins with the term "notwithstanding". Without giving any colour to the interpretation, I would say that neither clause (a) nor (b) (of section 24(1)) provides for lapse (of the acquisition) where there is no award but only that for the determination of the compensation, the new Act will apply and and that if the award is made, then old Act will apply wholly", advanced the SG.

"The only provision which deals with a lapse (section 24(2)) speaks of two contingencies- where the physical possession of the land has not been taken or the compensation has not been paid. Only when these two conditions are fulfilled, the proceedings shall be deemed to have lapsed and the land acquisition may be started afresh under the new Act. In that event then the modalities of social impact assessment, rehabilitation etc. have to be complied with. The proviso (to section 24(2)) saves this lapse", he continued.

"If no compensation is paid, the proceedings lapse by virtue of 24(2), but there is a proviso that lays down that if the award was made but the compensation was not paid to the majority of the beneficiaries, then the acquisition doesn't lapse, but all are entitled to a better compensation under the new Act", confirmed Chief Justice Ranjan Gogoi.

Affirming the position, the SG added, "There was an argument that the proviso is to be read as the proviso to 24(1)(b) and has been wrongly placed with 24(2)".

When the Chief Justice asked what the question which has been referred to the five-judge bench is, Mr. Mehta replied that it is yet to be framed, undertaking to field prospective issues "objectively inspire of (him) representing the State".

"According to me, the first question would be what the import of the word 'paid' in 24(2) is...

Whether the word 'paid' of the new Act necessarily implies 'deposit' under section 31 of the old Act...What would be the meaning of the phrase "deposited in the account of the beneficiaries" as used in proviso to section 24(2)", he ventured.

Next, he canvassed the question of whether the period during which the award had been remained stayed should be excluded for the purposes of consideration of the provisions of section 24(2) of the 2013 Act, in the light of the judgment in Balaji (2014) (where it was held that the omission in section 24(2) to specifically exclude the period covered by an interim order of the Court staying the acquisition proceeding is a conscious omission of the legislature and the courts cannot fill up such an omission) and that in Yogesh Neema (2016) where the correctness of this decision was doubted.

"I am not sure whether to address you on this question or not that whether the acquisition would lapse even where, as a result of a stay, the compensation could not be paid or the possession couldn't be taken...Indore Development Authority (2018) said it is an established principle of law that the act of the court cannot be understood to cause prejudice to any of the contesting parties. But that observation was not referred to a larger bench by anyone", averred Mr. Mehta.

"Whether Indore Development rightly declared the decision in Pune Municipal Corporation as per incuriam? I am tempted to argue it is the correct opinion...", he continued.

In 2014, a three-Judge bench interpreted this provision in Pune Municipal Corporation v Harakchand Misirimal Solanki, to mean that acquisition proceedings initiated under the 1894 Act five years prior to the coming into force of the 2013 Act would lapse if the acquired land was not taken possession of by the State, or compensation was not paid to the displaced farmers.

This bench was comprised of former Chief Justice R.M.Lodha and Justices Madan B.Lokur and Kurian Joseph. The bench held in this case that if the landholder refuses to receive the compensation, then it should be deposited with a court, rather than in the Government treasury if the proceedings were not to lapse.

Subsequently, in February last year, the Arun Mishra-Adarsh Kumar Goel-Mohan M.Shantanagoudar bench, in Indore Development Authority v. Shailendra held that this ruling in Pune Municipal Corporation, because it held that the landholder cannot take advantage of his own wrong by refusing to take the compensation under the old Act, in order to make it lapse, so that he could get the benefit of higher compensation under the 2013 Act.

Tushar Mehta , Solicitor General Of India [LiveLaw]

In Indore Development, it was observed that "The past practice for more than a century, of deposit in treasury, as per rules/ orders and decisions were not placed for consideration. It was not open to invalidate such deposits made in treasury without consideration of the provisions, prevailing practice, and decisions under the Act of 1894. The decision rendered in Pune Municipal Corporation and other decisions following the view taken in Pune Municipal Corporation are per incuriam". The question which this raised was whether a three-Judge bench was competent to declare the law laid down by another three-Judge bench per incuriam, without consideration by a larger bench. In March, 2018, One three-Judge bench presided by Justice Lokur, stayed the hearing of compensation matters in the land acquisition cases in all the high courts and in the Court itself till it heard the parties on the of reference to a larger bench on the issue. However, two two-Judge benches, one presided by Justice Arun Mishra and another by Justice Adarsh Kumar Goel, pre-empted it, by making a reference to the CJI for constituting a larger bench, to consider the same issue.

The bench on Tuesday allowed the SG time until Thursday to frame the issues for its consideration.