LAPSE OF LAND

AQUISITION
UNDER S.24, THE RIGHT TO FAIR COMPENSATION AND TRANSPARENCY IN
LAND ACQUISITION, REHABILITATION AND RESETTLEMENT ACT, 2013

SUBMITTED BY:
KARSIN MANOCHA
MOHD. ANAS KHAN
 LAND LAWS ASSIGNMENT ON “LAPSE OF LAND ACQUISITION” UNDER 2013 ACT

TABLE OF CONTENTS
S.NO. TOPIC PAGE NO.

1 SECTION 24 OF 2013 ACT 2

2 OBJECTIVE OF THE SECTION 3-4

3 PRE-REQUISITES UNDER SECTION 24 5

4 LEGISLATIVE INTENT BEHIND ENACTMENT OF 5

SECTION 24(2) OF 2013 ACT

5 WHETHER PERIOD OF FIVE YEARS UNDER SECTION 6

24(2) IS ABSOLUTE?

6 WHAT IS THE PROVISION AND WHY DOES IT NEED 6

INTERPRETATION?

7 ISSUE 1 7-17

7(a) DECISION NO.1– PUNE MUNICIPAL CORPORATION V 7-10

HARAKCHAND MISIRAMAL SOLANKI

7(b) DECISION NO. 2 INDORE DEVELOPMENT AUTHORITY 11-14

V. SHAILENDRA

7(c) REFERENCE TO LARGER BENCH 15

7(d) CONTROVERSY AROUND JUSTICE ARUN MISHRA 16

7(e) WHAT DOES THE CONTROVERSY MEAN FOR LAND- 17

OWNERS AND PROJECT PROPONENTS?

8 ISSUE 2 18-23

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1. SECTION 24 OF THE RIGHT TO FAIR COMPENSATION

AND TRANSPARENCY IN LAND ACQUISITION,
REHABILITATION AND RESETTLEMENT ACT, 2013
Section 24 of the right to fair compensation and transparency in land acquisition, rehabilitation
and resettlement act, 2013 reads as follows:

24. Land acquisition process under Act No. 1 of 1894 shall be deemed to have lapsed in
certain cases.–

(1) Notwithstanding anything contained in this Act, in any case of land acquisition proceedings
initiated under the Land Acquisition Act, 1894,—

(a) where no award under section 11 of the said Land Acquisition Act has been made, then, all
provisions of this Act relating to the determination of compensation shall apply; or

(b) where an award under said section 11 has been made, then such proceedings shall continue
under the provisions of the said Land Acquisition Act, as if the said Act has not been repealed.

(2) Notwithstanding anything contained in sub-section (1), in case of land acquisition

proceedings initiated under the Land Acquisition Act, 1894 (1 of 1894), where an award under
the said section 11 has been made five years or more prior to the commencement of this Act
but the physical possession of the land has not been taken or the compensation has not been
paid the said proceedings shall be deemed to have lapsed and the appropriate Government, if
it so chooses, shall initiate the proceedings of such land acquisition afresh in accordance with
the provisions of this Act:

Provided that where an award has been made and compensation in respect of a majority of land
holdings has not been deposited in the account of the beneficiaries, then, all beneficiaries
specified in the notification for acquisition under section 4 of the said Land Acquisition Act,
shall be entitled to compensation in accordance with the provisions of this Act.

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2. OBJECTIVE OF THE SECTION

The Supreme Court in the case of Aligarh Development Authority v. Megh Singh & ors 1
elucidated on the law relating to lapse of acquisition proceedings under Section 24 of 2013 Act.

The Apex Court stated that Section 24 of the 2013 Act envisages mainly two situations:

1. Where the land acquisition proceedings had already been initiated under the 1894 Act
but no award was passed till the date the new Act came into force;
2. Where the Award has been passed but neither the owner has been dispossessed nor has,
he been paid the compensation;
• Under the first situation, where the award had not been passed, the acquisition
proceedings could continue, but the compensation will have to be determined under the
scheme of 2013 Act.
• Under the second situation, there is a statutory lapse of the proceedings.
• There is also an incidental third situation, where award under the Land Acquisition Act,
1894 Act had already been passed prior to coming into force of the 2013 Act, but
payment is yet to be made and possession is yet to be taken. In that case, the further
proceedings after the award could continue under the old Act of 1894 but if either
payment or possession has not taken effect in five years prior to the 2013 Act, then
proceedings will lapse.

Section 114 of THE RIGHT TO FAIR COMPENSATION AND TRANSPARENCY IN

LAND ACQUISITION, REHABILITATION AND RESETTLEMENT ACT, 2013 provides
for the provision of Repeal and Saving:-

“114. Repeal and saving.—(1) The Land Acquisition Act, 1894 (1 of 1894) is hereby repealed.
(2) Save as otherwise provided in this Act the repeal under sub-section (1) shall not be held to
prejudice or affect the general application of Section 6 of the General Clauses Act, 1897 (10 of
1897) with regard to the effect of repeals.”

Also, in a lengthy Statement of Objects and Reasons, it is stated that the 1894 Act has been
found to be inadequate in addressing certain issues, and therefore, needs to be replaced by an
up-to-date measure.

1
CIVIL APPEAL NO. 4821 OF 2016

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Paragraph 18 of the Statement of Objects and Reasons is relevant, and reads as follows:

“Statement of Objects and Reasons.— The benefits under the new law would be available in
all the cases of land acquisition under the Land Acquisition Act, 1894 where award has not
been made or possession of land has not been taken.

The Preamble of the Act is also important and reads as follows:

“An Act to ensure, in consultation with institutions of local self-government and Gram Sabhas
established under the Constitution, a humane, participative, informed and transparent process
for land acquisition for industrialisation, development of essential infrastructural facilities and
urbanisation with the least disturbance to the owners of the land and other affected families and
provide just and fair compensation to the affected families whose land has been acquired or
proposed to be acquired or are affected by such acquisition and make adequate provisions for
such affected persons for their rehabilitation and resettlement and for ensuring that the
cumulative outcome of compulsory acquisition should be that affected persons become partners
in development leading to an improvement in their post-acquisition social and economic status
and for matters connected therewith or incidental thereto.”

The Preamble of the Act makes it clear that a humane, participative, informed and transparent
process for land acquisition has become the felt need of the times. This approach must also be
with the least possible disturbance to owners of land.

The objective of Section 24(2) is to punish the State if it has been “tardy in tendering or paying
compensation” even after five years have elapsed after passing of the award, specifically this
Court held that Section 24(2) is an exception to Section 24(1)(b) and for Section 24(2) to apply,
the award under Section 11 should have been made five years or more prior to commencement
of the 2013 Act.2

Secondly, the object of Section 24 is that in case an award has been made for five years or
more, possession ought to have been taken within this period, or else it is statutorily presumed
that the balance between the citizen’s right to retain his own property and the right of the State
to expropriate it for a public purpose gets so disturbed as to make the acquisition proceedings
lapse. Alternatively, if compensation has not been paid within this period, it is also statutorily
presumed that the aforesaid balance gets disturbed so as to free such property from acquisition.

2
Delhi Development Authority v. Sukhbir Singh, (2016) 16 SCC 258 : (2017) 5 SCC (Civ) 779]

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3. PRE-REQUISITES UNDER SECTION 24

In the case of Delhi Development Authority v. Sukhbir Singh 3, the Supreme Court enumerated
the essential ingredients for application of Section 24(2) of 2013 Act as under:

(a) Section 24(2) begins with a non obstante clause keeping sub-section (1) out of harm’s way;

(b) For it to apply, land acquisition proceedings should have been initiated under the Land
Acquisition Act;

(c) Also, an award under Section 11 should have been made 5 years or more prior to the
commencement of the 2013 Act;

(d) Physical possession of the land, if not taken, or compensation, if not paid, are fatal to the
land acquisition proceeding that had been initiated under the Land Acquisition Act;

(e) The fatality is pronounced by stating that the said proceedings shall be deemed to have
lapsed, and the appropriate Government, if it so chooses, shall, in this game of snakes and
ladders, start all over again.

In view of the aforesaid, the Court held that the two conditions that need to be fulfilled for
application of Section 24(2) are:

1. That the award must have been made 5 years or more prior to the commencement of
the Act; and
2. That either compensation has not been paid or physical possession of the land has not
been taken by the respondents.

4. LEGISLATIVE INTENT BEHIND ENACTMENT OF

SECTION 24(2) OF 2013 ACT
In the DDA v. Sukhbir Singh 4 case, the Supreme Court also explained the legislative intent
behind enactment of Section 24(2) of 2013 Act as under:

That the State has no business to expropriate from a citizen his property if an award has been
made and the necessary steps to complete acquisition have not been taken for a period of five
years or more.

3
(2016) 16 SCC 258 : (2017) 5 SCC (Civ) 779]
4
(2016) 16 SCC 258

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5. WHETHER PERIOD OF FIVE YEARS UNDER SECTION

24(2) IS ABSOLUTE?
The Delhi High Court in a recent case of Ramjas Foundation vs UOI 5 was confronted with
this question and stated that the Legislature in its wisdom made the period of five years under
Section 24(2) of the 2013 Act absolute and unaffected by any delay in the proceedings on
account of any order of stay by a court. The plain wordings used by the Legislature are clear
and do not create any ambiguity or conflict and in such a situation, the Court is not required to
depart from the literal rule of interpretation.

6. WHAT IS THE PROVISION AND WHY DOES IT NEED

INTERPRETATION?
The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and
Resettlement Act 2013 (2013 Act), replaced the Land Acquisition Act, 1894 (1894 Act).

The new Act provides for higher compensation to those deprived of land by the government
for both public and private sector projects.

It also mandates consent of a majority of land-owners, and contains provisions for

rehabilitation and resettlement.

Under Section 24(2), land acquisition made under the old law of 1894 lapses if the award of
compensation had been made five years before the new Act came into force, but has not been
paid. In such cases, the process will have to be gone through afresh under the new Act, which
mandates higher compensation.

There are cases in which farmers and other land-owners have refused the compensation,
leading to delay in the government taking possession. In this situation, the compensation
amount is deposited in the government treasury.

According to one interpretation, if this is done, the acquisition process is saved. Then again,
others contend that such cases will fall under the new Act because compensation has not been
paid to the land-owners, and the lapsing clause in Section 24 should be applied.

5
W.P.(C) 6674/2015, C.M. APPL.12173/2015 & 14593/2017.

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If, through interpretation, a long-pending land acquisition process is closed under the old law
and fresh acquisition proceedings started under the new one, the land-owners stand to benefit,
but project proponents will have to pay higher compensation. Therefore, the provision
concerned is often a subject of litigation.

7. ISSUE I :- There has been a contradictory opinion by two three judge bench decisions of
Hon’ble Supreme Court on the account of correct meaning of the expression “compensation
has been paid” under S.24(2) of THE RIGHT TO FAIR COMPENSATION AND
TRANSPARENCY IN LAND ACQUISITION, REHABILITATION AND
RESETTLEMENT ACT, 2013. The following are the judgements:

7. (a) DECISION NO.1– PUNE MUNICIPAL CORPORATION V HARAKCHAND

MISIRAMAL SOLANKI 6

FACTS:- The brief facts necessary for consideration of the above question are these. On
06.08.2002, the proposal of the Municipal Commissioner, Pune Municipal Corporation (for
short, "Corporation") duly approved by the Standing Committee for acquisition of lands
admeasuring 43.94 acres for development of "Forest Garden" was sent to the Collector, Pune.
The Collector sanctioned the proposal and on 20.02.2003 forwarded the same to Special Land
Acquisition Officer (15), Pune for further action. On 30.09.2004, the notification under Section
4 of the 1894 Act was published in the official gazette. Then notices under Section 4(1) were
served upon the landowners/interested persons. On 26.12.2005, the declaration under Section
6 was published in the official gazette and on 02.02.2006, it was also published at the site and
on the notice board of the Office of Talathi. Following the notices under Section 9, on
31.01.2008 the Special Land Acquisition Officer made the award under Section 11 of the 1894
Act.

The landowners challenged the above acquisition proceedings before the Bombay High Court
in 9 writ petitions. of them, 2 were filed before making award and 7 after the award.

The challenge to the acquisition proceedings and the validity of the award was laid on diverse
grounds including (i) absence of resolution of the General Body of the Corporation; (ii) non-
compliance with the provisions of Section 5A, (iii) noncompliance with the provisions of
Section 7, and (iv) lapsing of acquisition proceedings under Section 11A.

6
(2014) 3 SCC 183.

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The High Court on consideration of the arguments advanced before it by the parties has held
that the acquisition proceedings for the development of "Forest Garden" could not be initiated
by the Commissioner with the mere approval of the Standing Committee without resolution of
the General Body of the Corporation.

The acquisition proceedings were also held bad in law for noncompliance of Section 7 and
other statutory breaches. Inter alia, the High Court has quashed the acquisition proceedings and
gave certain directions including restoration of possession.

ARGUMENTS:- It is argued on behalf of the landowners that by virtue of Section 24(2) of

the 2013 Act, the subject acquisition shall be deemed to have been lapsed because the award
under Section 11 of the 1894 Act is made more than five years prior to the commencement of
2013 Act and no compensation has been paid to the owners nor the amount of compensation
has been deposited in the Court by the Special Land Acquisition Officer.

On the other hand, on behalf of the Corporation and so also for the Collector, it is argued that
the award was made by the Special Land Acquisition Officer on 31.01.2008 strictly in terms
of 1894 Act and on the very day the landowners were informed regarding the quantum of
compensation for their respective lands. Notices were also issued to the landowners to reach
the office of the Special Land Acquisition Officer and receive the amount of compensation and
since they neither received the compensation nor any request came from them to make
reference to the District Court under Section 18, the compensation amounting to Rs. 27 crores
was deposited in the government treasury.

It is, thus, submitted that there was no default on the part of the Special Land Acquisition
Officer or the government and, hence, the acquisition proceedings have not lapsed. Moreover,
reliance is also placed on Section 114 of the 2013 Act and it is argued that the concluded land
acquisition proceedings are not at all affected by Section 24(2) and the only right that survives
to the landowners is to receive compensation.

HELD:- The Court explained the two sub-sections of Section 24 in brief to mean as follows:

Insofar as Sub-section (1) of Section 24 is concerned, it begins with non obstante clause. By
this, Parliament has given overriding effect to this provision over all other provisions of 2013
Act. It is provided in Clause (a) that where the land acquisition proceedings have been initiated
under the 1894 Act but no award under Section 11 is made, then the provisions of 2013 Act
shall apply relating to the determination of compensation.

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Clause (b) of Section 24(1) makes provision that where land acquisition proceedings have been
initiated under the 1894 Act and award has been made under Section 11, then such proceedings
shall continue under the provisions of the 1894 Act as if that Act has not been repealed.

Section 24(2) also begins with non obstante clause. This provision has overriding effect over
Section 24(1).

Section 24(2) enacts that in relation to the land acquisition proceedings initiated under 1894
Act, where an award has been made five years or more prior to the commencement of the 2013
Act and either of the two contingencies is satisfied, viz.; (i) physical possession of the land has
not been taken or (ii) the compensation has not been paid, such acquisition proceedings shall
be deemed to have lapsed.

On the lapse of such acquisition proceedings, if the appropriate government still chooses to
acquire the land which was the subject matter of acquisition under the 1894 Act then it has to
initiate the proceedings afresh under the 2013 Act.

The proviso appended to Section 24(2) deals with a situation where in respect of the acquisition
initiated under the 1894 Act an award has been made and compensation in respect of a majority
of land holdings has not been deposited in the account of the beneficiaries then all the
beneficiaries specified in Section 4 notification become entitled to compensation under 2013
Act.

The Court held that acquisition proceedings initiated under the 1894 Act, which were initiated
five years before the 2013 law was enacted, would lapse if the land in question was not taken
control of, or if compensation was not paid to displaced farmers. The deposit of the
compensation amount in the government treasury was held to be “of no avail” as it was not
equivalent to the compensation being “paid”.

Based on this judgment, subsequent cases were decided on the same principle: acquisition that
had taken place earlier than five years before the new Act commenced would lapse if
compensation amount was not paid to the land-owners or, in cases in which the owners refused
to accept compensation, deposited in court.

The judgment, which was delivered by a bench comprising Justices R.M. Lodha, M.B. Lokur
and Kurian Joseph, came as a relief for land owners.

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The decision was followed in Bimla Devi v. State of Haryana 7, Shivaji Shamrao Patil v.
LAO 8, Working Friend Coop. House Building Society Ltd. v. State of Punjab 9.

The decision was applied in Sharma Agro Industries v. State of Haryana 10, Ram Kishan v.
State of Haryana 11, Rattan Singh v. Union of India 12, Malik Industry v. State of
Haryana 13.

The decision was relied on, followed and applied in DDA v. Sukhbir Singh 14.

The decision was distinguished in Mahavir v. Union of India 15 and Rajiv Jain v. State of
U.P 16.

The decision was dissented in Indore Development Authority v. Shailendra 17 and referred
to larger bench in Indore Development Authority v. Shyam Verma 18.

7
(2014) 6 SCC 583.
8
(2017) 13 SCC 265.
9
(2016) 15 2CC 464.
10
(2015) 3 SCC 341.
11
(2015) 4 SCC 347.
12
(2015) 16 SCC 342.
13
(2018) 13 SCC 85.
14
(2016) 16 SCC 258.
15
(2018) 3 SCC 588.
16
(2018) 12 SCC 513.
17
(2018) 3 SCC 412.
18
(2018 3 SCC 405.

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7.(b) DECISION NO. 2 INDORE DEVELOPMENT AUTHORITY V. SHAILENDRA 19

In 2018, another three-judge bench of Justices Arun Mishra, Adarsh Kumar Goel and Mohan
Shantanagoudar declared the judgment in the Pune Municipal Corporate case “per incuriam”.
The judgment was delivered with a 2:1 majority, with Justice Shantanagoudar dissenting.

ISSUES BEFORE THE COURT:- Following questions arises for consideration:

I. What is the meaning of the expression 'paid'/'tender' in Section 24 of the Act of 2013 and
Section 31 of the Act of 1894? Whether non-deposit of compensation in court Under Section
31(2) of the Act of 1894 results into a lapse of acquisition Under Section 24(2) of the Act of
2013. What are the consequences of non-deposit in Court especially when compensation has
been tendered and refused Under Section 31(1) of the Act of 1894 and Section 24(2) of the Act
of 2013? Whether such persons after refusal can take advantage of their wrong/conduct?

II. Mode of taking physical possession as contemplated Under Section 24(2) of the Act of 1894.

III. Whether Section 24 of Act of 2013 revives barred and stale claims?

IV. Whether the conscious omission referred to in paragraph 11 of the judgment in Shree
Balaji Nagar Residential Association v. State of Tamil Nadu 20 makes any substantial
difference to the legal position with regard to the exclusion or inclusion of the period covered
by an interim order of the Court for the purpose of determination of the applicability of Section
24(2) of the 2013 Act?

V. Whether the principle of "actus curiae neminem gravabit", namely act of the Court should
not prejudice any parties would be applicable in the present case to exclude the period covered
by an interim order for the purpose of determining the question with regard to taking of
possession as contemplated in Section 24(2) of the 2013 Act?

ANSWERS TO ISSUES:-

A. No. I: The word 'paid' in Section 24 of the Act of 2013 has the same meaning as 'tender of
payment' in Section 31(1) of the Act of 1894. They carry the same meaning and the expression
'deposited' in Section 31(2) is not included in the expressions 'paid' in Section 24 of the Act of
2013 or in 'tender of payment' used in Section 31(1) of the Act of 1894. The words 'paid'/tender'
and 'deposited' are different expressions and carry different meanings within their fold.

19
(2018) 3 SCC 412.
20
(2015) 3 SCC 353

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In Section 24(2) of the Act of 2013 in the expression 'paid', it is not necessary that the amount
should be deposited in court as provided in Section 31(2) of the Act of 1894. Non-deposit of
compensation in court Under Section 31(2) of the Act of 1894 does not result in a lapse of
acquisition Under Section 24(2) of the Act of 2013. Due to the failure of deposit in court, the
only consequence at the most in appropriate cases may be of a higher rate of interest on
compensation as envisaged Under Section 34 of the Act of 1894 and not lapse of acquisition.

Once the amount of compensation has been unconditionally tendered and it is refused, that
would amount to payment and the obligation. Under Section 31(1) stands discharged and that
amounts to discharge of obligation of payment Under Section 24(2) of the Act of 2013 also
and it is not open to the person who has refused to accept compensation, to urge that since it
has not been deposited in court, acquisition has lapsed. Claimants/landowners after refusal,
cannot take advantage of their own wrong and seek protection under the provisions of Section
24(2).

A. No. II: The normal mode of taking physical possession under the land acquisition cases is
drawing of panchnama as held in Banda Development Authority, Banda v. Moti Lal
Agarwal and Ors. 21. The Court observed that preparing a Panchnama is sufficient to constitute
taking of possession. If acquisition is of a large tract of land, it may not be possible to take
physical possession of each and every parcel of the land and it would be sufficient that symbolic
possession is taken by preparing an appropriate document in the presence of independent
witnesses and getting their signatures. Even subsequent utilization of a portion of acquired land
for public purpose was still sufficient to prove taking possession.

A. No. III: The provisions of Section 24 of the Act of 2013, do not revive barred or stale claims
such claims cannot be entertained.

A. No. IV: Provisions of Section 24(2) do not intend to cover the period spent during litigation
and when the authorities have been disabled to act Under Section 24(2) due to the final or
interim order of a court or otherwise, such period has to be excluded from the period of five
years as provided in Section 24(2) of the Act of 2013. There is no conscious omission in Section
24(2) for the exclusion of a period of the interim order. There was no necessity to insert such
a provision. The omission does not make any substantial difference as to legal position.

21
(2011) 5 SCC 394

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A. No. V: The principle of actus curiae neminem gravabit is applicable including the other
common law principles for determining the questions Under Section 24 of the Act of 2013.
The period covered by the final/interim order by which the authorities have been deprived of
taking possession has to be excluded. Section 24(2) has no application where Court has quashed
acquisition.

HELD:- It is settled that a Court cannot add or subtract a word; the expression "compensation
has not been paid" is used in Section 24(2); it is not open to the court to add to these words, or
to substitute the said expression with any further expression, such as 'deposit'. In the "Principles
of Statutory Interpretation" by G.P. Singh (14th edition), it has been observed that court has to
avoid addition or substitution of the words. Thus, when the word "paid" is there, it is not open
to adding "deposited", particularly when the scheme of the Act of 1894 also contains different
provisions in Section 31(1) with respect to tender is payment, while Section 31(2) deals with
deposit in the court; on non-deposit consequence in Section 34, later is not a payment made to
the landowner. The deposit is only in certain exigencies with a view to wiping off the liability
of making payment of interest as provided in Section 34.

Since there is no ambiguity of drafting in the provisions contained in Section 24(2) of the Act
of 2013, so also none is there in those contained in Sections 31(1) and 31(2) of the Act of 1894.
Thus, in discharging its interpretative function, to exercise the power to correct obvious
drafting errors that can be done only in suitable cases where there is error of drafting.

A judgment can be declared per incuriam if it does not follow a statutory provision or a binding
precedent that may have been relevant. It literally translates to “through lack of care”. In such
scenarios, a judgment can be declared to be without any legal force, and is then not treated as
a valid precedent.

The majority, consisting of the first two judges, ruled that the acquisition would not lapse
merely because the compensation amount was not deposited in court, but was instead deposited
in the treasury. It ruled that the past practice of more than a century, under which the amount
was deposited in the treasury, was not taken into account by the earlier Bench. Some provisions
and orders that allowed this practice were not placed before that Bench. Further, the land
acquisition in that particular case had been quashed by a High Court in 2008. Since it was not
a subsisting process, the question under Section 24(2), whether the acquisition lapsed because
of non-payment of compensation or non-deposit in the court, did not arise at all.

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The Court held that the principles which can be culled out from the above-noted judgments
before it are:

i) No hard and fast Rule can be laid down as to what act would constitute taking of possession
of the acquired land.

ii) If the acquired land is vacant, the act of the concerned State authority to go to the spot and
prepare a panchnama will ordinarily be treated as sufficient to constitute taking of possession.

iii) If crop is standing on the acquired land or building/structure exists, mere going on the spot
by the concerned authority will, by itself, be not sufficient for taking possession. Ordinarily, in
such cases, the concerned authority will have to give notice to the occupier of the
building/structure or the person who has cultivated the land and take possession in the presence
of independent witnesses and get their signatures on the panchnama.

Of course, refusal of the owner of the land or building/structure may not lead to an inference
that the possession of the acquired land has not been taken.

iv) If the acquisition is of a large tract of land, it may not be possible for the
acquiring/designated authority to take physical possession of each and every parcel of the land
and it will be sufficient that symbolic possession is taken by preparing appropriate document
in the presence of independent witnesses and getting their signatures on such document.

v) If beneficiary of the acquisition is an agency/instrumentality of the State and 80% of the

total compensation is deposited in terms of Section 17(3A) and substantial portion of the
acquired land has been utilized in furtherance of the particular public purpose, then the Court
may reasonably presume that possession of the acquired land has been taken.

On these grounds, Justice Mishra and Justice Goel overruled the earlier judgment and held that
it was per incuriam, that is a verdict passed in disregard of law and, therefore, wrong. Justice
Shantanagoudar dissented on the last point.

The fresh judgment held that if a landowner refuses to accept the compensation offered by the
developer, they cannot take advantage of their own wrongdoing and have the acquisition
proceedings lapse under the old law. This came as a relief for developers.

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7. (c) REFERENCE TO LARGER BENCH

Days after the 2018 judgment, another three-judge bench comprising Justices M.B. Lokur,
Kurian Joseph and Deepak Gupta in STATE OF HARYANA AND ORS. v. M/S G.D.
GOENKA TOURISM CORPORATION LIMITED AND ANR. 22 stayed the operation of
the Indore Development Authority judgment.

Lawyers appearing before them argued that Justice Mishra’s Bench, being of the same size of
the one that rendered the earlier verdict, was bound by it, and ought not to have overruled it.
Justices Lokur and Joseph were part of the earlier bench that delivered the Pune Municipal
Corporation judgment.

This bench directed the high courts across the country to not decide any case on the basis of
the new ruling, and requested apex court judges to defer hearing and not pass any orders in
other cases pending before the Supreme Court.

This bench essentially took objection to the 2018 three-judge bench overruling a precedent laid
down by a coordinate bench, because in common law, judgments by larger benches or those
with equal number of judges are binding on other benches. Hence, a three-judge bench cannot
override the judgment of another three-judge bench. It can only record its difference of opinion
and request for the case to be considered by a larger bench, to set a binding precedent.

During the hearing, Justice Joseph was quoted as saying: “I don’t want to remain silent on this
issue. There are certain virgin principles which cannot be deviated from. The system exists on
these holy principles. This court should function as one institution.”

Following this, two different two-judge benches made references to the then-Chief Justice of
India Dipak Misra to constitute a larger bench to settle the controversy. One of these benches
was presided over by Justice Arun Mishra and another was led by Justice A.K. Goel — both
part of the bench that decided the 2018 Indore Development Authority case.

Initially, the case was supposed to be heard by a five-judge bench comprising CJI Ranjan Gogoi
and Justices N.V. Ramana, D.Y. Chandrachud, Deepak Gupta, and Sanjiv Khanna in the case
of Indore Development Authority & Anr. v. Shyam Verma & Ors. 23.

22
(2018) 3 SCC 585.
23
(2018) 3 SCC 405.

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It was held that the said five-judge bench shall consider all the aspects including the correctness
of the decision rendered in Pune Municipal Corporation Case 24 and the other judgements
following the said decision as well as the judgment rendered in Indore Development Authority
Case 25. However, this bench was unable to assemble after the first week of April.

A five-judge bench, headed by Justice Arun Mishra and comprising Justices Indira Banerjee,
Vineet Saran, M.R. Shah and Ravindra Bhat, will now begin hearing the matter from 15
October.

7. (d) CONTROVERSY AROUND JUSTICE ARUN MISHRA

The controversy now revolves around Justice Arun Mishra heading the five-judge Constitution
bench that would settle the precedent, since he was part of the 2018 bench that overruled the
2014 judgment.

Since the announcement, two farmer associations have already written to the CJI, objecting to
Justice Mishra hearing the matter, despite him having already expressed his opinion in the 2018
judgment.

In their letters, the All India Farmer Association and the Delhi Grameen Samaj have
highlighted the fact that Justice Mishra would have a conflict of interest in deciding the case.

At one level it is a legal issue over the interpretation of a provision in the new land acquisition
law of 2013. At another, it is a question of possible judicial bias warranting the withdrawal of
a judge from the proceedings. The reason is that the judge concerned, Justice Arun Mishra, of
the Supreme Court of India, had overruled a precedent that had held good for four years and
given a new interpretation, but was still asked to head a larger Bench meant to render an
authoritative verdict on which of the two interpretations is right.

Why is there a demand for Justice Arun Mishra’s recusal?

It was not until this month that a Bench was constituted. It was a five-member Bench headed
by Justice Mishra. Some lawyers and parties commented that it was improper for the judge to
hear this matter because he had already taken a firm view in favour of one interpretation.

24
(2014) 3 SCC 183.
25
(2018) 3 SCC 412.

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Senior lawyer Shyam Divan demanded Justice Mishra’s recusal in open court, invoking the
principle that even the apprehension of bias on the part of a judge was enough to ask for his
withdrawal from a case.

Supreme Court judge Justice Arun Mishra on 23rd October, 2019 refused to recuse from hearing
a land acquisition case after demands by petitioners.

The judge, however, rejected the idea categorically, contending that a “lobby” was against his
hearing the case. In oral observations, he said there was nothing to suggest that he would be
unwilling to be persuaded by new arguments to take a fresh view of the legal questions.

Justice Mishra, heading a 5-judge bench, also referred to certain social media posts and articles
seeking that he drop out of the bench and said they were not against a particular judge but an
attempt to malign the institution. "I will be the first person to sacrifice if the integrity of
institution is at stake. I am not biased and don't get influenced by anything on earth. If I am
satisfied that I am biased then only I will recuse myself from hearing this case".

He was also critical of the word "impartial", used repeatedly by parties seeking his recusal, and
said: "This word hurts me. Don't use it as it will send wrong message to the common man".

Also, he said this question has arisen in many cases, and many judges now in the Supreme
Court would have dealt with it as High Court judges. However, arguments on the issue of bias
and the principles of recusal went on for two weeks, and the court has reserved its order on this
question.

7(e) WHAT DOES THE CONTROVERSY MEAN FOR LAND-

OWNERS AND PROJECT PROPONENTS?
A ruling that old acquisitions lapse for non-deposit of compensation will be more beneficial to
land-owners and farmers as they stand to get higher compensation and rehabilitation and
resettlement measures. On the other hand, project proponents feel such an interpretation would
mean that those who refused to take compensation, even after it had been fixed and the money
deposited in the government treasury, would be taking advantage of their own wrong.

If the Bench rejects the demand for Justice Mishra’s recusal, the petitioners will have no choice
but to argue the entire question again on merits. Thereafter, the ruling given by the five-member
Bench is expected to settle the question. In case there is a recusal, the question will go to a
Bench that does not include him.

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8. ISSUE II- WHETHER THE PROVISO CONTAINED IN SECTION 24 OF

THE RIGHT TO FAIR COMPENSATION AND TRANSPARENCY IN LAND
ACQUISITION, REHABILITATION AND RESETTLEMENT ACT, 2013
[“2013 ACT”] IS A PROVISO TO SECTION 24(1)(B) OR WHETHER IT IS
A PROVISO TO SECTION 24(2).

The reason for this confusion is because of the placement of the proviso of sub-section (2) of Section
24 of the 2013 Act. This is a case where the old British ditty comes to mind:

“I’m the Parliament’s draftsman, I compose the country’s laws, And of half the litigation I’m
undoubtedly the cause!” 26

The High Court of Delhi, in a judgment dated 21.05.2015, Tarun Pal Singh v. Lieutenant Governor,
Government of NCT of Delhi and Ors.27 , had held that the said proviso would govern Section 24(1)(b),
and not Section 24(2). This judgment has been followed in a number of other judgments of the same
High Court.

By a judgment of the Division Bench of this Court, namely, Delhi Metro Rail Corporation v. Tarun Pal
Singh28, the Division Bench of this Court has taken the view that the proviso to Section 24 governs
Section 24(2) and not Section 24(1)(b).

As a result of this judgment, there is no doubt that the main judgment of the High Court of Delhi in
Tarun Pal Singh v. Lieutenant Governor, Government of NCT of Delhi and Ors.29 and all the
judgments that have followed would have to be upset.

Shri Dhruv Mehta, learned Senior Advocate appearing on behalf of the respondents, however,
contends that the judgment in Delhi Metro Rail Corporation (supra) itself requires a relook.

According to him, if the proviso to Section 24 were to govern Section 24(2) and not Section 24(1)(b),
a valuable right of lapsing would be taken away and also, various repugnancy and inconsistencies
would follow.

According to Shri Amarendra Sharan, learned Senior Advocate appearing on behalf of the DDA, this
being a very recent judgment of this Court ought not to be disturbed as it has correctly appreciated
and laid down the law in great detail.

It will be noticed that Section 24(1) begins with a non-obstante clause, the idea being that despite the
fact that the 1894 Act has been repealed by Section 114 of the 2013 Act, yet, under certain
circumstances, compensation is payable not under the provisions of the repealed Act, but under the
provisions of the 2013 Act.

26
DDA v. Virender Lal Bahri & Ors., SPECIAL LEAVE PETITION (CIVIL) NO.37372 OF 2016.
27
W.P.(C) 8596/2014.
28
(2018) 14 SCC 161.
29
W.P.(C) 8596/2014.

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In fact, in DDA v. Sukhbir Singh30, this Court, after setting out Section 24, then set out the statutory
scheme contained therein as follows:

Section 24(1) begins with a non obstante clause and covers situations where either no award has been
made under the Land Acquisition Act, in which case the more beneficial provisions of the 2013 Act
relating to determination of compensation shall apply, or where an award has been made under
Section 11, land acquisition proceedings shall continue under the provisions of the Land Acquisition
Act as if the said Act had not been repealed.

The picture that therefore emerges on a reading of Section 24(2) is that the State has no business to
expropriate from a citizen his property if an award has been made and the necessary steps to complete
acquisition have not been taken for a period of five years or more. These steps include the taking of
physical possession of land and payment of compensation. What the legislature is in effect telling the
executive is that they ought to have put their house in order and completed the acquisition
proceedings within a reasonable time after pronouncement of award. Not having done so even after
a leeway of five years is given, would cross the limits of legislative tolerance, after which the whole
proceeding would be deemed to have lapsed. It is important to notice that the section gets attracted
if the acquisition proceeding is not completed within five years after pronouncement of the award.
This may happen either because physical possession of the land has not been taken or because
compensation has not been paid, within the said period of five years.

A faint submission to the effect that “or” should be read as “and” must be turned down for two
reasons. The plain natural meaning of the sub-section does not lead to any absurdity for us to replace
language advisedly used by the legislature.

Secondly, the object of the Act, and Section 24 in particular, is that in case an award has been made
for five years or more, possession ought to have been taken within this period, or else it is statutorily
presumed that the balance between the citizen’s right to retain his own property and the right of the
State to expropriate it for a public purpose gets so disturbed as to make the acquisition proceedings
lapse. Alternatively, if compensation has not been paid within this period, it is also statutorily
presumed that the aforesaid balance gets disturbed so as to free such property from acquisition.”

The judgment of this Court in Delhi Metro Rail Corporation (supra), after setting out Section 24, has
found:

An exception is also carved out by a non obstante clause contained in sub-section (2) of Section 24; it
begins with “notwithstanding anything contained in sub-section (1)”. Thus, it would supersede the
provisions of Section 24(1) also. In case of land acquisition proceedings, initiated under the 1894 Act,
wherein an award has been made within 5 years or more prior to the commencement of the 2013 Act,
if physical possession has not been taken or compensation has not been paid, then the said
proceedings shall be deemed to have lapsed.

The proviso to sub-section (2) makes it clear that when the award has been made and, compensation
in respect of majority of holdings has not been deposited in the account of beneficiaries the acquisition
would not lapse. However, all the beneficiaries shall be entitled to enhanced compensation under the
2013 Act. This proviso is to be necessarily part of sub-section (2) of Section 24 only. The legislative
intention is clear that it is enacted as proviso to Section 24(2), and otherwise also if read as if it were
a proviso to Section 24(1).

30
(2016) 16 SCC 258.

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(b), it would create repugnancy with the said provision and the provisions of Section 24(1)(b) and the
proviso to Section 24(2) would become wholly inconsistent with each other. This is a trite law that the
interpretation which creates inconsistency or repugnancy has to be avoided and the proviso has to be
part of Section 24(2) as enacted.

As per fundamental rule of its construction, no contrary intention is available in the provisions so as
not to read it as part of Section 24(2). As Section 24(1)(b) provides, in case award has been passed
under the 1894 Act, the proceedings shall continue of the said Act as if it has not been replaced
whereas Section 24(2) provides deemed lapse in case award is passed 5 years or more before
commencement of the 2013 Act and possession has not been taken or compensation has not been
paid and as per the proviso with respect to majority of landholdings compensation has not been
deposited in account of landowners.

In case award has been passed few days before commencement of the 2013 Act, then deposit of
compensation with respect to majority of holding is bound to take time, that is why legislature has
made difference of consequences based upon time-gap in passing of award as requisite steps to be
taken are bound to consume some time by providing proceedings to continue under the 1894 Act.

We have already clarified supra based on a catena of judgments, that a proviso appended to a
provision has to be specifically interpreted in the manner so as to enable the field which is covered by
the main provision. The proviso is only an exception to the main provision to which it has been enacted
and no other. The proviso deals with a situation which takes something out of the main enactment to
provide a particular course of action, which course of action could not have been adopted in the
absence of the proviso.

The proviso appended to Section 24(2) indicates that it carves out an exception for a situation where
the land acquisition proceedings shall not be deemed to lapse. Thus, for the applicability of the
proviso, a case has to be covered by Section 24(2) i.e. award has been made five years or more prior
to the enforcement of the 2013 Act.

The proviso to Section 24(2) contemplates a situation where with respect to majority of the holding
compensation not deposited event of minority of holding the landowners are paid, meaning thereby
that for majority of the landholding in case amount is deposited acquisition is saved by the proviso.
The proviso in fact extends the benefit even to those landholders who have received compensation
as per the 1894 Act.

Thus, all landholders are to receive benefit of higher and liberal compensation under the 2013 Act.
This situation is one where land acquisition proceedings shall not lapse and are saved. The purpose
and object of the proviso is to give benefit of computation of compensation to all landholders and to
save land acquisition proceedings.

Hence, it is evident that the proviso is appropriately be treated as a proviso to sub-section (2) of
Section 24 and cannot be read as proviso to Section 24(1)(b) of the 2013 Act.

It was urged at the end by Mr. Anil Goel, learned counsel appearing on behalf of some of the
landowners that, since the amount has not been deposited with respect to majority of holding in the
account of the beneficiaries, the acquisition stands lapsed. We have held that the proviso to Section
24(2) is not applicable in the instant case, same is applicable where the award had been passed 5 years
before. In a case where award has been passed within 5 years, the said proviso of Section 24(2) cannot
be said to be applicable. The submission made on the basis of the proviso cannot be said to be
sustainable.”

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The first important thing to be noticed is that Section 24(1) and (2) deal with different subjects. Section
24(1) deals with compensation whereas Section 24(2) deals with lapsing of the acquisition itself.

There are many cogent reasons as to why the proviso in the Section is really a proviso to Section
24(1)(b) and not to Section 24(2).

Firstly, the scheme of Section 24(1) is to provide enhanced compensation under the 2013 Act even in
cases where a Section 4 notification has been made under a repealed statute, namely, the Land
Acquisition Act, 1894, but where no award has been pronounced on 01.01.2014, when the 2013 Act
comes into force.

This is clear from a reading of Section 24(1)(a). Section 24(1)(b) then goes on to state that where an
award has been made under the repealed Act prior to 01.01.2014, then compensation and all other
provisions of the repealed Act will continue to apply to such award. To this, an exception has been
carved out by the proviso, which states that even in such cases where compensation in respect of a
majority of land holdings has not been deposited in the account of the beneficiaries, then all
beneficiaries specified in the Section 4 notification shall be entitled to compensation under the 2013
Act.

The proviso is an exception to Section 24(1)(b) in cases where a Section 4 notification covers many
land holdings in the majority of which, compensation has not yet been deposited, making it clear,
therefore, that compensation not having been paid to substantially all such persons, the more
beneficial provisions of the 2013 Act should apply. Read thus, there is no inconsistency or repugnancy
between the proviso and Section 24(1)(b) of the Act.

If, on the other hand, the proviso is read as a proviso to Section 24(2), many anomalies arise. Firstly,
as has been correctly held in Delhi Metro Rail Corporation (supra), for sub-section (2) of Section 24 to
apply, (i) the award under Section 11 of the 1894 Act should have been made five years or more prior
to the commencement of the Act; and (ii) physical possession of the land has not been taken or
compensation has not been paid. Take a case where the award has been made six years before
01.01.2014, and physical possession of the land has not been taken. The acquisition is deemed to have
lapsed in such circumstances. If the proviso is to apply to Section 24(2), then notwithstanding that
physical possession has not been taken, yet, there will be no lapse, as has been held in Delhi Metro
Rail Corporation (supra).

This would fly in the face of several judgments of this Court where it has been held that a proviso
cannot be used to nullify or set at naught the substantive provision contained in the main enactment.
Thus, in Dwarka Prasad v. Dwarka Das Saraf 31, this Court held:

A proviso must be limited to the subject-matter of the enacting clause. It is a settled rule of
construction that a proviso must prima facie be read and considered in relation to the principal matter
to which it is a proviso. It is not a separate or independent enactment. “Words are dependent on the
principal enacting words to which they are tacked as a proviso. They cannot be read as divorced from
their context”. 32 If the rule of construction is that prima facie a proviso should be limited in its
operation to the subject-matter of the enacting clause, the stand we have taken is sound. To expand
the enacting clause, inflated by the proviso, sins against the fundamental rule of construction that a
proviso must be considered in relation to the principal matter to which it stands as a proviso.

31
(1976) 1 SCC 128.
32
Thompson v. Dibdin, 1912 AC 533

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Secondly, if read as a proviso to Section 24(2), arbitrary results would ensue, rendering the proviso
arbitrary, and hence, liable to be struck down under Article 14 of the Constitution of India. Take the
case of a Section 4 notification applying only to a single piece of land with a single owner. If the
conditions of sub-section (2) of Section 24 are fulfilled, the acquisition would lapse. However, in the
case of a neighbouring land, which happens to be land belonging to the same owner, which is one
among twenty pieces of land that have been acquired under a single Section 4 notification, if
compensation in respect of a majority of land holdings has not been deposited, such acquisition will
not lapse, but only higher compensation under the 2013 Act would be paid. Obviously, a particular
land holder’s acquisition lapsing cannot be dependent upon a contingency as to whether his land alone
is acquired or is acquired in conjunction with other persons’ lands.

Thirdly, take the converse case where an award is made in respect of a large number of lands covered
by the same Section 4 notification, and compensation in respect of a majority of land holdings has
been deposited. Can it then be said that in such a case, lapsing will take place because the proviso in
such a case will not apply?

Obviously, therefore, whether compensation in respect of a majority of land holdings has or has not
been deposited would have no bearing on whether lapsing does or does not take place under a totally
independent provision, namely, Section 24(2).

Fourthly, the language of the proviso makes it clear that it does not refer to the award spoken of in
Section 24(2) for two reasons.

First, the expression, “an award has been made” in the proviso cannot be equated to “such award has
been made”. Also, the words “an award” being made “five years or more prior to the commencement
of this Act” are conspicuous by their absence in the proviso. Reading these words in, when the
legislature has chosen not to add them, would do violence to the literal language and plain meaning
of the proviso. However, if the proviso is read as a proviso to Section 24(1)

(b), it would be perfectly compatible with all awards that are made under Section 11, whether within
or beyond five years prior to the commencement of the 2013 Act, as pointed out hereinabove.

We must not forget that we are dealing with a beneficial legislation. The Preamble which has been
referred to casts light on the object sought to be subserved by the 2013 Act in general, as well as by
Section 24. We have already seen that land acquisition is to take place in a humane fashion, with the
least disturbance to the owners of the land, as also, to provide just and fair compensation to affected
persons.

Viewed in the light of the Preamble, this legislation, being a beneficial legislation, must be construed
in a way which furthers its purpose. 33 On assumption, that two views are possible, view which accords
with the beneficial object sought to be achieved by the legislation, is obviously the preferred view.

In Sree Balaji Nagar Residential Assn. v. State of Tamil Nadu 34, had held as follows:

It was faintly suggested by Mr. Subramonium Prasad, learned AAG for the State of Tamil Nadu that
the proviso may come to the rescue of the State and save the proceedings from suffering lapse if it is
held that since there was an award leading to payment of compensation in respect of some of the
landholdings only, therefore all the beneficiaries may now be entitled to compensation in accordance
with the provisions of the 2013 Act.

33
Eera (through Dr. Manjula Krippendorf) v. State (NCT of Delhi) and Anr., (2017) 15 SCC 133
34
(2015) 3 SCC 353.

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This contention could have been considered with some more seriousness if physical possession of the
land had been taken but since that has not been done, the proviso dealing only with compensation
cannot be of any help to the State. Therefore, we are not required to go deeper into the effect and
implications of the proviso which prima facie appears to be for the benefit of all the landholders in a
case where the award is subsisting because the proceedings have not lapsed and compensation in
respect of majority of landholdings has not been deposited in the account of the beneficiaries. There
is nothing in the language of the proviso to restrict the meaning of the words used in Section 24(2)
mandating that the proceedings shall be deemed to have lapsed if the award is five years or more than
five years old but the physical possession of the land has not been taken over or the compensation
has not been paid.

From the discussions made above, it is amply clear that though there is lack of clarity on the issue
whether compensation has been paid for majority of landholdings under acquisition or not, there is
no dispute that physical possession of the lands belonging to the appellants under consideration in
these appeals have not been taken by the State or any other authority on its behalf and more than
five years have elapsed since the making of the award dated 30-11-2006, and 1-1-2014 when the
2013 Act came into force. Therefore, the conditions mentioned in Section 24(2) of the 2013 Act are
satisfied for allowing the plea of the appellants that the land acquisition proceedings must be deemed
to have lapsed in terms of Section 24(2) of the 2013 Act. The appeals are disposed of accordingly. It
goes without saying that the Government of Tamil Nadu shall be free, if it so chooses to initiate
proceedings of such land acquisition afresh in accordance with the provisions of the 2013 Act. In the
facts and circumstances of the case there shall be no order as to costs.”

This judgment has since been upset by a judgment of three learned Judges in the case of Indore
Development Authority v. Shailendra35. The judgment in Indore Development Authority (supra) has
itself been referred to a Bench of five learned Judges vide order dated 22.02.2018.

For all these reasons, it is better if this judgment were also to be referred to the same Bench which is
hearing Indore Development Authority (supra) afresh, as that case also refers to different aspects of
the same provision, namely, Section 24 of the 2013 Act.

For all these reasons, the Court in DDA v. Virender Lal Bahri 36 requested the Chief Justice of India to
refer Delhi Metro Rail Corporation v. Tarun Pal Singh37, to the aforesaid larger Bench for
reconsideration thereof.

35
(2018) 3 SCC 412, at 551.
36
SPECIAL LEAVE PETITION (CIVIL) NO.37375 OF 2016.
37
(2018) 14 SCC 161.

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