Land Acquisition : No Lapse Of Proceedings Under Old Act If Compensation Is Deposited In Treasury ; SC 5-Judge Bench Upholds Indore Development Authority Decision [Read Judgment]

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 :Under the provisions of Section 24(1)(a) in case the award is not made as on 1.1.2014 the date of commencement of Act of 2013, there is no lapse of proceedings. Compensation has to be determined under the provisions of Act of 2013.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.The word 'or' used in Section 24(2) between possession and compensation has to be read as 'nor' or as 'and'. The deemed lapse of land acquisition proceedings under Section 24(2) of the Act of 2013 takes place where due to inaction of authorities for five years or more prior to commencement of the said Act, the possession of land has not been taken nor compensation has been paid. In other words, in case 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.The expression 'paid' in the main part of Section 24(2) of the Act of 2013 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. In case the obligation under Section 31 of the Land Acquisition Act of 1894 has not been fulfilled, interest under Section 34 of the said Act can be granted. Non-deposit of compensation (in court) does not result in the lapse of land acquisition proceedings. In case of non-deposit with respect to the majority of holdings for five years or more, compensation under the Act of 2013 has to be paid to the "landowners" as on the date of notification for land acquisition under Section 4 of the Act of 1894.In case a person has been tendered the compensation as provided under Section 31(1) of the Act of 1894, it is not open to him to claim that acquisition has lapsed under Section 24(2) due to non-payment or non-deposit of compensation in court. The obligation to pay is complete by tendering the amount under Section 31(1)....

Land Acquisition : No Lapse Of Proceedings Under Old Act If Compensation Is Deposited In Treasury ; SC 5-Judge Bench Upholds Indore Development Authority Decision [Read Judgment]

Manu Sebastian

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