A 5-judge bench of the Supreme Court on Friday held that proceedings under the Land Acquisition Act 1894 will not lapse if the compensation has been tendered by deposit in treasury.
The Court held that land owners cannot insist that the amount should be deposited in Court so as to sustain the land acquisition proceedings under the old Act on the commencement of the new land acquisition law with effect from January 1, 2014.
"Deposit in treasury in place of deposit in court causes no prejudice to the landowner or any other stakeholder as their interest is adequately safeguarded by the provisions contained in Section 34 of the Act of 1894, as it ensures higher rate of interest than any other Government securities. Their money is safe and credited in the earmarked quantified amount and can be made available for disbursement to him/them. There is no prejudice caused and every infraction of law would not vitiate the act", the bench observed.
Land owners cannot insist that the proceedings have lapsed if the government has tendered the amount by deposit in treasury, said Justice Arun Mishra, while reading out the judgment for the bench. The obligation to pay compensation is complete on government tendering the amount. There is no need to actually deposit the amount with the land owners or in the concerned Court.
Thus, the bench has affirmed the view in the 2018 Indore Development Authority case, overruling the 2014 judgment in Pune Municipal Corporation case. A bench comprising Justices Arun Mishra, Indira Banerjee, Vineet Saran, M R Shah and Ravindra Bhat had heard the matter.
The case involved the interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013. As per this provision, compensation proceedings under the Land Acquisition Act 1894 will lapse on the commencement of the 2013 Act, if "compensation has not been paid".
The question in the case was whether deposit of compensation by the Government in Government treasury can be regarded as "paid" within the meaning of Section 24(2).
The 5-judge bench also held that the word "or" in Section 24(2) should be read as "and". This means that the proceedings under old LA Act will lapse only if if there is failure to take possession "and" failure to pay compensation.
If possession taken but compensation not paid, there is no lapse.
If compensation paid but possession not taken, then also no lapse of proceedings under 1894 Land Acquisition Act.
The questions referred to the Constitution Bench were answered in the following manner :
The underlying issue, in broad terms, was whether deposit of compensation by government in treasury can be deemed as payment to landowner as per Section 24(2) of the 2013 Land Acquisition Act so as to save the proceedings taken under the 1894 Land Acquisition Act from being lapsed.
In 2014, a three judge bench (Justices R M Lodha, M B Lokur and Kurian Joseph) in Pune Municipal Corporation case held that in case land owners are not willing to accept the compensation, the same has to be deposited in Court. Mere deposit of compensation in treasury cannot be regarded as payment as per Section 24(2), added the bench. In other words, land acquisition proceedings under the 1894 Act will lapse
This view held field for nearly over three years, until a two judges bench comprising Justice Arun Mishra and Amitava Roy doubted its correctness in the Indore Development Authority case in December 2017 and referred it to larger bench.
The larger bench (a three judge bench) which considered the reference was also headed by Justice Arun Mishra. This three judge bench (by 2:1 majority) held the decision in Pune Municipal Corporation to be per incuriam. While Justices Arun Mishra and A K Goel were in the majority, Justice Mohan M Shantanagoudar dissented by stating that a three judge bench cannot overrule a precedent laid down by a co-ordinate bench.
Shortly, another three-judge bench (Justices Madan B Lokur, Kurian Joseph and Deepak Gupta) took objection to this course adopted by Justice Arun Mishra-led bench in the Indore Development Authority case, and stayed the operation of Indore Development Authority case.
It was only after this that a two-judge bench headed by Justice Arun Mishra thought it fit to refer the issue to the CJI for determination by a larger bench.
Request for Justice Arun Mishra's recusal
At the beginning of the hearing, some of the parties made a request for the recusal of Justice Arun Mishra from the bench on the ground that the bench was examining the correctness of the judgment authored by him was under examination. They argued that Justice Arun Mishra appeared to be pre-disposed to a particular stand on the interpretation of Section 24(2) in view of the consistent stands taken by him throughout, and said that this created a likelihood of bias.
After an elaborate hearing on the preliminary issue of recusal, Justice Arun Mishra turned down the request. Justice Mishra said that previous judgment cannot constitute bias, and added that a litigant cannot be allowed to choose the bench on the basis of untenable apprehensions.
(Story to be updated after receiving judgment)
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