An Analysis Of Section 24 Of The Right To Fair Compensation And Transparency In Land Acquisition, Rehabilitation And Resettlement Act, 2013: Landmark Case Laws
Since the pre-independence era, agriculture has been the dominant occupation
of Indian inhabitants. It is thus due to this factor that, the major part of the
geographical area of the Indian subcontinent constitutes to be of agricultural
land. Even after industrialisation and urbanisation the industries,
infrastructure and other establishments still hold a relatively small portion of
land in India.
However due to the rapid rise in globalisation, modernization and urbanisation this proportion of land holding is changing rapidly and for this changes and developments to be undertaken new spaces are required due to which the majority held private lands which were earlier being used for agriculture are now being transferred for commercial and industrial use.
The industrialisation and infrastructural development projects such as building of streets, highways, railways, housing and other community purposes makes it necessary for the government to acquire land compulsorily by way of paying compensation to the land owners. Since the British era the legal framework for compulsory land acquisition of privately held land was governed by the Land Acquisition Act Of 1894.
However various challenges with regard to provisions of this act arose particularly when land acquisition was needed for establishing big industrial units on the cost of the farmers land. There were various issues in The Land Acquisition Act 1894 since it made government's acquisition of land possible without adequate compensation and employment opportunities for the displaced people.
The issue with regards to possession being taken of the acquired land even before the compensation award has been declared or payment has been given to the land owners. Although the act was biased towards the corporate and upper class interests which made the implementation of law less humane and uprooted the farmers from their only habitat.
It was due to these issues and non-satisfaction with provisions of existing Land Acquisition Act which led to the enactment of another act. The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act Of 2013 was ratified with an intent for regulation of land acquisition, it laid down the process and directions for reimbursement reintegration and relocation of the affected persons.
The objective is to safeguard the affected people, people whose lands are projected to be attained and their families in land acquisition, provide for a transparent process of the acquisition proceedings while ensuring just and fair compensation and make suitable requirements for such people for their restoration and relocation.
The new act, The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (further referred as Act of 2013) therefore replaced the Land Acquisition Act 1894. This however raised many new issues such as that what will happen to the ongoing land acquisition proceedings after the new act comes into force, will they continue as per old act or will they lapse?
In order to address these queries section 24 was inserted in the Act of 2013 which lays down the cases when Land acquisition process under Act of 1894 shall be deemed to have lapsed. However, this section had different interpretations granted by different courts and eventually issues arose with regards to the understanding of provision of section 24 In the landmark cases of Pune Municipal Corporation vs Harakchand Misirimal Solanki case 2014 and Indore Development Authority vs Manohar Lal.
This paper is an attempt is made to analyse the provisions of section 24 with the help of the landmark judgements and understand its interpretation.
Understanding Section 24 Of The Act
The erstwhile Land Acquisition Act Of 1894 had existed in India for more than a century and had governed the land acquisition process for majority of the development projects & infrastructural plans for both the public and private sector. However, after the enactment of the new act of 2013, there was a situation of apprehension with regards to the ongoing proceedings till 31 December 2013 before the new act came into force on 1st January 2014.
To solve this issue, section 24 was inserted in the act of 2013, which is defined below
This definition if simplified in plain words would be read as follows:
The section 24 of the act is a retrospective clause which aims to give clarification about the ongoing land acquisition proceedings under the old act which are/was currently at different stages of the process. The section 24 was given a wide interpretation by different state governments who had made their own guidelines and instructions for the same.
Few such interpretations us declared by the different governments at state-level are:
On a basic appraisal of the above-mentioned section 24, it comes across as a simple provision explaining the retrospective effect of the requirements of the new act of 2013 and the significances of the ongoing proceedings which are at different stages of the land acquisition process. However, this section particularly came into the limelight in the Pune municipal corporation case where the Supreme Court had to decide on the applicability of the retrospective effect of this section and its provisions.
The Supreme Court's judgement in this case was again questioned in the case of Indore development Authority case, where the bench gave contradictory order in comparison to the Pune judgement. After this the issue was referred to a five-judge bench which finally led to the settlement of the issues but still raised some more new questions about the applicability of section 24.
The Relevant Section Of The Land Acquisition Act, 1894
A Section 31 in The Land Acquisition Act, 1894
31 Payment of compensation or deposit of same in Court
Maharashtra Nagpur (City)
Pune Municipal Corporation Vs Harakchand Misirimal Solanki1
The Facts In Brief Of This Present Case Are:
On 6 August 2002 the Standing Committee for acquisition of land had approved the proposal given by the Municipal Commissioner of the Pune Municipal Corporation for the development of Forest Garden on a land measuring up to 43.94 acres. This proposal was thereafter sent to the Collector of Pune who then sanction the proposal and on 20 February 2003 advanced the said proposal to the "Special Land Acquisition Officer" of Pune for taking additional course of action.
After this as per the provisions of the said act notices were made and published in the Official Gazette and also served upon the landowners and interested people as per section 4, under section 6 and section 9 as per the act of 1894. Following this on 31 January 2008 the Officer declared the award as per section 11 of the 1894 act.
However, the land owners defied the procurement proceedings before the Bombay High Court in total of "nine writ petitions" out of which seven were made after the award was declared and two were filed before the declaration of the award.
The ground for challenging the procurement proceedings and the validity of the award Included various points:
Following this the High Court gave directions for restoration of the position of land owners. However, the main issue which arose in this present case was, whether the land procurement proceedings under section 11 of act of 1894 had lapsed as per section 24 of the 2013 act or not.
Main Issue:
Arguments By The Landowners:
The land owners contended that by the enactment of the act of 2013, section 24 (2) provides the provision that the land acquisition proceedings will be lapsed when an award under section 11 of the old act is made for five years or more preceding to the start of the new act and when no compensation has been paid to the owners or no amount of compensation has been deposited in The Court by the Acquisition Officer the proceedings will be lapsed. They contended that in this present case the award was made by the government prior to 2009 and therefore it falls under the ambit of the provisions of section 24.
Arguments Of The Corporation:
The corporation on the other hand contended that the award that was declared by the Acquisition Officer was done so on 31 January 2008 as per the terms and provisions of the 1894 act and the land owners on the same day were informed about the quantum of compensation they were to receive. Following this, notice was also given to the landowners for their presence in the Special Land Acquisition Officer's Office for receiving the amount of compensation.
But they did not receive that and neither any request came from their side for a reference to the district court under section 18. Therefore, the compensation amount of around Rs.27,00,00,000 was thereafter deposited in the government treasury. It was therefore contended by the corporation that they have not committed any default and therefore the acquisition proceedings shall not be lapsed.
According to them the transfer of the amount to the government treasury is sufficient for negation of the provisions of section 24, i.e. the land owners shall not be able to claim to retake the land by stating that that they have not received a compensation.
The Decision Of The Supreme Court:
The Supreme Court in its judgement stated that the section 24 commences with a non-obstinate part i.e. it gives an overriding effect to all other requirements of act of 2013. The particular section 24(2) provides for two contingencies, which if either of them is satisfied will lead to lapse of the proceedings under the old act. These two events are that "if the physical position of the land has not been taken yet" or "the compensation has not been paid", in a situation when the award has been declared five years or more preceding to the instigation of the new act.
The Supreme Court interpreted the clause "compensation has not been paid" by understanding the section 31 of the 1894 act which dealt with the imbursement of compensation and mandates the collector to make payment of the compensation and if they are prevented in doing so then they have to deposit the set an amount in the court.
The Honourable court stated that after an award has been made under section 11 by the government then the compensation so awarded shall be tendered to the persons entitled to it. If they do not agree to obtain such amount or if there is lack of capable people or if there is dispute with regard to title of the land for receiving the compensation or about the apportionment of the compensation then the collector shall 'credit the said amount to the court'.
The Supreme Court laid down that after interpreting the section 24 of 2013 act with a reading on the basis of section 31 of the 1894, the expression "compensation has not been paid" should not be given a literal construction but instead should be interpreted liberally because due to that the procedure and process of depositing the compensation as per section 31 of the 1894 in case of happening of any contingency would also be then regarded as the compensation has been paid when such amount has been deposited in the court.
The Supreme Court said that it is an established rule that when a authority is given to do a certain thing in certain way then that thing must be done in that way or should not be done at all. Hence the Supreme Court on the basis of the facts in this present case stated that the award was made on 31 January 2008 and following which notices were given to the land owners for receiving the reimbursement and since they did not come forward to receive the said amount, it was thereafter placed in the state's treasury.
The question is whether the depositing of the amount of reimbursement in the state's treasury is equal to the process when amount is to be paid to the land owners? And for this the Supreme Court answered in negative and said that the credit of amount of reimbursement in the govt.'s treasury is of no use and the obligation to pay the interest also gets paused till the sum is not placed in the court.
Therefore, the Supreme Court stated that on the basis of the facts it gets clarified that the grant with respect to the ongoing land acquisition proceedings had been made by the Acquisition Officer for a period of more than five years preceding to the origination of the new act of 2013. It is established that the reimbursement which was awarded was neither paid to the land owners interested and not it was placed in the court.
Instead the deposit of compensation was made in the state revenue account which is not comparable to the compensation paid to the land owners. Therefore, the Supreme Court held that the land acquisition proceedings shall be considered to have lapsed as per section 24 (2) of the act of 2013. The Supreme Court therefore said that it was not required to discuss the case on merits and the appeal failed and the matter was dismissed with no order as to the costs.
My Analysis:
In this landmark case of Pune municipal corporation, the Supreme Court had by its decision implied that section 24 of the act of 2013 is valid in its retrospective effect and this also clarifies the doubt about the legality of the clause in positive. The above-mentioned judgement acted as an instructive explanation on the concept of applicability of section 24(2) with regards to the expression when "compensation will be deemed to be paid" and laid down the scenarios when compensation if not paid directly to the landowners would still be considered deemed to be paid if deposited in the court of law.
This case came across as a landmark judgement in clarifying the scope of section 24 to some extent and to increase the ambit of applicability of the new act of 2013. However, despite being a landmark judgement in regards to the requirements of section 24 and the new act of 2013, still it does not appear that this judgement is an end point to the dispute.
In this particular case, the land acquisition proceedings were at the stage of award declaration and compensation had to be paid and therefore the issue with respect to this situation was dealt under the section24(2) provisions; but still this judgement doesn't clarify the position of law in cases when the land acquisition proceedings are at different stages of completion process and this is why this present case is a situation specific judgement and not an overall review of section 24 of the act of 2013 as a whole.
This lacuna in interpretation of section 24 gives way to various other cases which can arise in subsequent proceedings. This case served as "ration decidendi" in various other land acquisition proceedings, where the land owners were able to rely on this precedent and overturn their proceedings in the pending matters. This judgement acted an accelerator in increasing the applicability of the new act and lapsing of the ongoing proceedings another old act.
The rule of law which came forward in this decision was that when any land acquisition proceedings is ongoing and for that an award has been declared and compensation has to be made but it is not so made within five years or more preceding to the inauguration of the new act, or in cases when contingencies occur and compensation needs to be deposited in court of law which is not done, then in such cases the land acquisition proceedings shall lapse and whether the land was acquired, without the compensation or not, will not be considered in this current scenario.
In this case due to the contingencies, the compensation could not be paid directly to the landowners and instead it was deposited in the government's own treasury which according to the state was enough to negate the contentions of section 24, i.e. to say even if the compensation was not paid directly to the land owners it was set aside in the government's treasury.
However, the Supreme Court had a different view in the scenario and they held that the state is always mandated to pay the land owner the money whenever any award is declared and it is only in the special circumstances or contingencies as per section 31 of the old act, that the government could deposit the said amount of compensation in the court. Therefore, transfer of compensation to government on treasury is not equivalent to the deposits to be made in the court of law and hence in this particular scenario the Supreme Court dismissed the appeal.
Hence this case became a landmark judgement and stare decisis, which ought not to be disturbed for the proper functioning of the judicial system and to give a consistent position with regards to these provisions of law.
However issues arose with the same provision when in the case of Indore development authority , the similar three judge bench took a diversion from the judgement of Pune municipal corporation and held that when the land owner has not taken the compensation after the award declaration but the payment has been made to the government treasury, then it becomes sufficient to counter the section 24 of the act of 2013 and it is not necessary that the said amount needs to be deposit in the court of law.
Since both these judgements gave a contradictory view and had the same strength of the bench for deciding the matter, this issue was referred to a five- judge bench of the Hon'ble Supreme Court for finally settling down the question on law.
Case Analysis Of
Indore Development Authority v/s Manohar Lal 2
Background Of The Case:
After the precedent set in the Pune Municipal Corporation case11, questions arose on the said judgement in other disputes. Particularly in case of Yogesh Enema v. State of M. P, when Division Bench of the Supreme Court questioned the accuracy of the Court's former verdict in Sree Balaji Nagar Residential Assn. case who had used the precedent set in the Pune Municipal Corporation case. The division bench had then moved on to refer the case to a larger Bench for reconsideration.
Following this a controversy again arose when in the case of Indore Development Authority v. Shailendra 2 (hereinafter referred to as IDA Case I), when a three-judge bench of the supreme court delivered an opposite judgement with the interpretation of Section 24 of 2013 Act.
The facts of that case were that the Indore development Authority wanted to construct ring roads and highways for connectivity in the outskirts of the city for which they wanted to acquire some land, however the land was already disputed since the possession of the lands was with the encroachers and not landowners.
The authority however still went ahead with the land acquisition proceedings and the compensation award was declared subsequently but due to dispute between encroachers and landowners, the owners did not take the compensation.
Following this the authority then deposited the amount with the Land acquisition collector and then moved on with the land acquisition process completion but the landowners objected that the process was not valid since compensation amount has not been paid & it was also not deposited in court of law and hence as per section 24(2) of the 2013 act, the proceedings shall lapse.
The three Judge Bench comprising of Justice Arun Mishra, Justice A.K. Goel and Justice Shantanagoudar overruled the verdict given down in the Pune Municipal Corporation case by another three judgements and give a different opinion. They were opined that the compensation will made under section 24 of the act will be considered to be have been paid if the amount is deposit a government treasury and the same is not necessary to deposit the court of law. They also said that the Pune Case was per incuriam i.e. 'through lack of care' as a judgement.
Following this issue again arose, when conflicts about interpretation of section 24 arose and eventually this conflict was referred to a 5-judge bench of the Supreme Court for solving the issue. However, before the bench could deal with the question in detail, issues were raised with regards to the fact that Justice Arun Mishra was a part of the bench even though he had already authored the IDA Case I which will in turn hamper the current proceedings due to biasness on the same issue.
After this, the bench had heard the arguments about this and eventually decided that the presence of Justice Arun Mishra will not create any bias since it's normal practice that Judges even when in previous case decided the question, overrules his judgement in larger bench cases, and review petitions. It was also held that the judiciary aims at not only settling a case permanently but settling it correctly.
Main Issue:
The Hon'ble court in its judgement first clarified the scope of section 24 of act of 2013. They laid down that the section 24 contains a non-obstante clause, i.e. it prevails over all the sections of the act of 2013. Section 24(1)(a) states if the land acquisition proceedings were started as per act of 1894 but award has not been completed, then the provisions of act of 2013 would apply for award determination but such proceedings do not lapse. Section 24(1)(b) states that when in such proceedings award has been made, then such proceedings shall continue as per the provisions of the act of 1894 and those pending proceedings shall be concluded accordingly.
They said that section 24(2) is an exception to the above clause since it states "When an award under section 11 of Act of 1894 has been made before five years or more since the origination of the act of 2013, but still the physical custody of the land has not yet been taken or the reimbursement has not yet been paid then such proposal will now be governed as per the new act of 2013".
This particular provision was in question and the judges decided accordingly:
The court also held that the purpose of section 24(2) and section 31 collectively is that sufficient fund should be set aside to be given to landowners and hence if the compensation is set aside with the Collector or in the treasury or in court, then no lapse in proceedings would occur and it would be deemed that compensation has been paid.
The court thereby clarified the scope of section 24 of the act of 2013 and also settled the issues about the interpretation and laid down that section 24 cannot be used for arising new cases on the concluded proceedings and revoking settled disputes or question legality of previous proceedings to invalidate the whole process.
My Analysis:
The judgment of the five-judge bench in this case had been a welcome step as it is a detailed analysis of section 24 in its scope and applicability. It clearly clarified the meaning of the provisions in question, particularly section 24(2). The judgment firstly settled the issue by holding that this provision is made up of twin conditions i.e. possession and compensation both
need to be not be present for the proceedings to lapse. The judgement clarified that in case if one of the steps have been satisfied i.e. if either possession has been taken place or the compensation has been paid, then in such scenario the proceedings shall not lapse.
The subsection 24(2) acts as a penal provision and makes the proceedings lapse in cases where neither the possession of land has been taken and nor the compensation has been paid. This provision is penal in the sense that it acts as a penalty to the authorities in case they delay in the land acquisition process and here if after the award has been made 5 years or before the new act of 2013 but the steps required have not been completed then the proceedings will lapse.
This in turn will make the authorities work again from scratch if they want to acquire the land as they would then be required to start the proceedings afresh under the new provisions. The judgement in this regard gave a final interpretation to be followed and thus set up uniform practice of land acquisition process.
This case also finally settled the issue about when the compensation is deemed to be paid other than the deposit to landowners and the courts in case when landowners do not consent to receive such amount or if there is lack of competent people or if there is dispute with regard to title of the land for receiving the compensation or about the apportionment of the compensation.
The court also held that the purpose of section 24(2) and section 31 collectively is that sufficient fund should be set aside to be given to landowners and hence if the compensation is set aside with the Collector or in the treasury or in court, then no lapse in proceedings would occur and it would be deemed that compensation has been paid and therefore deposit of the amount to treasuries doesn't lead to lapse in the proceedings.
The section 24 and particularly the subsection 24(2) focus on the aspect of time, which is of utmost importance here. It is only because of the lag in time of the steps to be followed, that the proceedings shall lapse and fresh process needs to be initiated.
The court had also used this judgement to establish that the objective of the new act and the section 24 was not to revoke the already settled proceedings of the period prior to the new act and create double cases.
This in turn helped the establishing the retrospective limit of the section and solved majority of the proceedings, which were ongoing due to the fact that they were restarted in the first place due to wrong interpretation of the section 24.
Therefore, in my opinion this judgment helped in setting up a wholesome explanation of the section 24 of the act of 2013 and has settled all issues about its interpretation.
Conclusion
The Constitution of India guarantees the right to obtain, hold or dispose of property subject to rational limitations by the State in interest of general public. This reasonable restriction allowed the administration to acquire land for public resolutions and the practice existed even before the Independence era. The land acquisition process was governed under the Land Acquisition Act, 1894. This act was however based on colonial interests and was opposed to the general welfare of the public, which led to exploitation, by the government's hands.
To tackle the issues, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act of 2013 was enacted to replace the old act. The new act aimed to enhance the land acquisition process in favour of landowners, make process more transparent and provide safeguards to them.
The section 24of the act of 2013 in particular was drafted to help the new act establish itself quickly. However, when issues arose about the interpretation, after series of judgements eventually the five-judge bench of Supreme Court settled the dispute.
The issue about the interpretation of section 24 and its scope took a decade to settle but, in the end, it clarifies that the aim of section 24 is not to reopen settled proceedings or provide opportunities for belated questions but only to provide opportunity to those cases where 5 years or more have passed in the process of land acquisition possession has not been taken, and compensation has not been deposited. The section aims to tackle the lack of time management by the authorities and default on their part.
The final five judge bench judgment therefore set up the stare decisis i.e. the settled principle of law which ought not to be disturbed. This will now help in maintain the status quo and consistency in the cases which were earlier not there due to different interpretation of the section.
Therefore, to conclude, I would say that the case of Indore Development Authority Vs Manohar Lal is now the landmark judgment whose ratio decidendi settles the interpretation of section 24 of the new act.
Bibliography
However due to the rapid rise in globalisation, modernization and urbanisation this proportion of land holding is changing rapidly and for this changes and developments to be undertaken new spaces are required due to which the majority held private lands which were earlier being used for agriculture are now being transferred for commercial and industrial use.
The industrialisation and infrastructural development projects such as building of streets, highways, railways, housing and other community purposes makes it necessary for the government to acquire land compulsorily by way of paying compensation to the land owners. Since the British era the legal framework for compulsory land acquisition of privately held land was governed by the Land Acquisition Act Of 1894.
However various challenges with regard to provisions of this act arose particularly when land acquisition was needed for establishing big industrial units on the cost of the farmers land. There were various issues in The Land Acquisition Act 1894 since it made government's acquisition of land possible without adequate compensation and employment opportunities for the displaced people.
The issue with regards to possession being taken of the acquired land even before the compensation award has been declared or payment has been given to the land owners. Although the act was biased towards the corporate and upper class interests which made the implementation of law less humane and uprooted the farmers from their only habitat.
It was due to these issues and non-satisfaction with provisions of existing Land Acquisition Act which led to the enactment of another act. The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act Of 2013 was ratified with an intent for regulation of land acquisition, it laid down the process and directions for reimbursement reintegration and relocation of the affected persons.
The objective is to safeguard the affected people, people whose lands are projected to be attained and their families in land acquisition, provide for a transparent process of the acquisition proceedings while ensuring just and fair compensation and make suitable requirements for such people for their restoration and relocation.
The new act, The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (further referred as Act of 2013) therefore replaced the Land Acquisition Act 1894. This however raised many new issues such as that what will happen to the ongoing land acquisition proceedings after the new act comes into force, will they continue as per old act or will they lapse?
In order to address these queries section 24 was inserted in the Act of 2013 which lays down the cases when Land acquisition process under Act of 1894 shall be deemed to have lapsed. However, this section had different interpretations granted by different courts and eventually issues arose with regards to the understanding of provision of section 24 In the landmark cases of Pune Municipal Corporation vs Harakchand Misirimal Solanki case 2014 and Indore Development Authority vs Manohar Lal.
This paper is an attempt is made to analyse the provisions of section 24 with the help of the landmark judgements and understand its interpretation.
Understanding Section 24 Of The Act
The erstwhile Land Acquisition Act Of 1894 had existed in India for more than a century and had governed the land acquisition process for majority of the development projects & infrastructural plans for both the public and private sector. However, after the enactment of the new act of 2013, there was a situation of apprehension with regards to the ongoing proceedings till 31 December 2013 before the new act came into force on 1st January 2014.
To solve this issue, section 24 was inserted in the act of 2013, which is defined below
- Notwithstanding anything contained in this Act, in any case of land
acquisition proceedings initiated under the Land Acquisition Act, 1894:
- 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
- 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.
- 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:
This definition if simplified in plain words would be read as follows:
- When an award under section 11 of the Land Acquisition Act of 1894 has not been declared, then those land acquisition proceedings will from then onwards be covered under the new act, that is the compensation to be calculated will be as per the provisions of the new act of 2013.
- When an award under section 11 of the Land Acquisition Act of 1894 has been made five years or more since the inauguration of the act of 2013, but even then the physical control of the land has not yet been taken or the compensation has not yet been paid then such proposal will now be governed as per the new act of 2013.
- When an award has been declared and made but even then the compensation for majority of the land holders is not yet deposited in the account of the beneficiaries then all such notified land holders will be entitled to the compensation as per the calculation given under the new out of 2013.
The section 24 of the act is a retrospective clause which aims to give clarification about the ongoing land acquisition proceedings under the old act which are/was currently at different stages of the process. The section 24 was given a wide interpretation by different state governments who had made their own guidelines and instructions for the same.
Few such interpretations us declared by the different governments at state-level are:
- Government of Orissa:
They declared that all the proceedings under the old act will continue till the process reaches the provisions given in section 7 of the old Land Acquisition act but, from the stage of compensation determination and award declaration the provisions of the Act of 2013 will apply. If in the proceedings, the award has already been declared then the payment of compensation will be governed as per the old act.
The proceedings as per section 24 (2) of the new act will break after five years have passed prior to the new act and the requiring authority will have the choice to initiate new land acquisition proceedings as per the new provisions of the act.
- Government of Karnataka:
They declared that for considering whether acquisition proceedings which were initiated under the act of 1894 will be continued on lapsed, will be decided on the basis of the provisions as per the section 24, 103 and 114(2) Of the new act of 2013 which will be read along with section 6 of the General Clauses Act of 1897 which states the effect of repeal , i.e. whenever any new act comes into force and enactment made earlier gets repealed then until a different intention is initiated the repeal of old act will not resuscitate whatsoever was not in force or which existed when the rescind took place
It will not disturb the preceding procedure of the act so as to repeal or reinstate whatsoever done under it or affect any right or liability which has been sustained or acquired as per previous enactment or affect any penalty or punishment given in respect of offences in the previous enactments or affect any proceedings in reverence of any right, liability or penalty and such proceedings shall be sustained as if the new act has not been approved.
On a basic appraisal of the above-mentioned section 24, it comes across as a simple provision explaining the retrospective effect of the requirements of the new act of 2013 and the significances of the ongoing proceedings which are at different stages of the land acquisition process. However, this section particularly came into the limelight in the Pune municipal corporation case where the Supreme Court had to decide on the applicability of the retrospective effect of this section and its provisions.
The Supreme Court's judgement in this case was again questioned in the case of Indore development Authority case, where the bench gave contradictory order in comparison to the Pune judgement. After this the issue was referred to a five-judge bench which finally led to the settlement of the issues but still raised some more new questions about the applicability of section 24.
The Relevant Section Of The Land Acquisition Act, 1894
A Section 31 in The Land Acquisition Act, 1894
31 Payment of compensation or deposit of same in Court
- On making an award under section 11, the Collector shall tender payment
of the compensation awarded by him to the persons interested entitled
thereto according to the award, and shall pay it to them unless prevented by
some one or more of the contingencies mentioned in the next sub-section.
- If they shall not consent to receive it, or if there be no person
competent to alienate the land, or if there be any dispute as to the title
to receive the compensation or as to the apportionment of it, the Collector
shall deposit the amount of the compensation in the Court to which a
reference under section 18 would be submitted: Provided that any person
admitted to be interested may receive such payment under protest as to the
sufficiency of the amount: Provided also that no person who has received the
amount otherwise than under protest shall be entitled to make any
application under section 18: Provided also that nothing herein contained
shall affect the liability of any person, who may receive the whole or any
part of any compensation awarded under this Act, to pay the same to the
person lawfully entitled thereto.
- Notwithstanding anything in this section, the Collector may, with the
sanction of 70 [appropriate Government] instead of awarding a money
compensation in respect of any land, make any arrangement with a person
having a limited interest in such land, either by the grant of other lands
in exchange, the remission of land revenue on other lands held under the
same title, or in such other way as may be equitable having regard to the
interest of the parties concerned.
- Nothing in the last foregoing sub-section shall be construed to
interfere with or limit the power of the Collector to enter into any
arrangement with any person interested in the land and competent to contract
1 in respect thereof. State Amendments Andhra Pradesh. In section 31:
- In sub-section (1), after the words and shall pay it to them insert the
words in a lump sum in a case where it does not exceed five hundred rupees
and in all others cases in such number of equal annual installments not exceeding
five as may be determined by the Collector;
- To sub-section (1) add the following provisos, namely:
Provided that where the compensation is sought to be paid in installments, the Collector shall pay installments of the amount awarded with interest thereon at six per cent per annum from the time of taking possession of the land until the last installment is paid:
Provided further that where possession of land is taken but the compensation awarded is not paid or deposited before the date of commencement of the Land Acquisition (Andhra Pradesh Amendment) Act, 1976, the provisions of this section shall apply in relation to the payment of compensation as if the acquisition proceedings have been started after the date of commencement of the said Act. [ Vide Andhra Pradesh Act 22 of 1976, sec. 3 (w.r.e.f. 12-9-1975)]. Himachal Pradesh. In section 31:
- after sub-section (3), insert the following sub-section, namely: 3(a).
Notwithstanding anything in this section, if the person interested in the
land is willing to accept the compensation in kind instead of money, the
Collector may further, with the sanction of the appropriate Government
instead of awarding a money compensation in respect of any land, give some
other land of equivalent value in exchange of the land acquired and thereby
pay the compensation awarded in whole or in part in accordance with the
market value of the land so given in exchange.;
- for sub-section (4) substitute the following sub-section, namely:
(4) Nothing in sub-sections (3) and (3A) shall be construed to interfere with or limit the power of the Collector to enter into any arrangement with any person interested in the land and competent to contract in respect thereof. [ Vide Himachal Pradesh Act 17 of 1986, sec. 3 (w.e.f. 22-7-1986)].
- after sub-section (3), insert the following sub-section, namely: 3(a).
Notwithstanding anything in this section, if the person interested in the
land is willing to accept the compensation in kind instead of money, the
Collector may further, with the sanction of the appropriate Government
instead of awarding a money compensation in respect of any land, give some
other land of equivalent value in exchange of the land acquired and thereby
pay the compensation awarded in whole or in part in accordance with the
market value of the land so given in exchange.;
- In sub-section (1), after the words and shall pay it to them insert the
words in a lump sum in a case where it does not exceed five hundred rupees
and in all others cases in such number of equal annual installments not exceeding
five as may be determined by the Collector;
Maharashtra Nagpur (City)
- In section 31, in sub-section (1), after the words the compensation and
in sub-section (2) after the words the amount of compensation the words and
costs if any shall be deemed to be inserted.
- In sub-section (2), in the concluding proviso, after the words any
compensation, the words or costs shall be deemed to inserted. [ Vide C.P. Act
XXXVI of 1836, sec. 61 and Sch., para 13 (w.e.f. 1-1-1937); Maharashtra (V.R.)
A.L.O., 1956]. Punjab : Haryana: Chandigarh. Same as that of MaharashtraNagpur
(City). [ Vide Punjab Act IV of 1922, sec. 59 and Sch., para. 13, Act 31 of
1966, sec. 88]. Uttar Pradesh.
- Same as that of MaharashtraNagpur (City). [ Vide Uttar Pradesh Act 11 of 1959, sec. 376 and Sch. II, para 13].
- For Uttar Pradesh Rules relating to grant of land under section 31 instead of compensation, see Uttar Pradesh Gazette, Pt. 1A, dated 17th June, 1967.
Pune Municipal Corporation Vs Harakchand Misirimal Solanki1
The Facts In Brief Of This Present Case Are:
On 6 August 2002 the Standing Committee for acquisition of land had approved the proposal given by the Municipal Commissioner of the Pune Municipal Corporation for the development of Forest Garden on a land measuring up to 43.94 acres. This proposal was thereafter sent to the Collector of Pune who then sanction the proposal and on 20 February 2003 advanced the said proposal to the "Special Land Acquisition Officer" of Pune for taking additional course of action.
After this as per the provisions of the said act notices were made and published in the Official Gazette and also served upon the landowners and interested people as per section 4, under section 6 and section 9 as per the act of 1894. Following this on 31 January 2008 the Officer declared the award as per section 11 of the 1894 act.
However, the land owners defied the procurement proceedings before the Bombay High Court in total of "nine writ petitions" out of which seven were made after the award was declared and two were filed before the declaration of the award.
The ground for challenging the procurement proceedings and the validity of the award Included various points:
- Absenteeism of the resolution by the general body of the corporation.
- Non-compliance with the requirements of section 5 and section 7 of Act of 1894.
- The lapse of access proceedings under section 11 A.
Following this the High Court gave directions for restoration of the position of land owners. However, the main issue which arose in this present case was, whether the land procurement proceedings under section 11 of act of 1894 had lapsed as per section 24 of the 2013 act or not.
Main Issue:
- The relevant question in the present case was that whether as per section 24(2) of the Act of 2013, the land acquisition proceedings initiated under the old act have lapsed or not?
- The other question arose about finding out the gist of the expression "compensation has not been paid"?
Arguments By The Landowners:
The land owners contended that by the enactment of the act of 2013, section 24 (2) provides the provision that the land acquisition proceedings will be lapsed when an award under section 11 of the old act is made for five years or more preceding to the start of the new act and when no compensation has been paid to the owners or no amount of compensation has been deposited in The Court by the Acquisition Officer the proceedings will be lapsed. They contended that in this present case the award was made by the government prior to 2009 and therefore it falls under the ambit of the provisions of section 24.
Arguments Of The Corporation:
The corporation on the other hand contended that the award that was declared by the Acquisition Officer was done so on 31 January 2008 as per the terms and provisions of the 1894 act and the land owners on the same day were informed about the quantum of compensation they were to receive. Following this, notice was also given to the landowners for their presence in the Special Land Acquisition Officer's Office for receiving the amount of compensation.
But they did not receive that and neither any request came from their side for a reference to the district court under section 18. Therefore, the compensation amount of around Rs.27,00,00,000 was thereafter deposited in the government treasury. It was therefore contended by the corporation that they have not committed any default and therefore the acquisition proceedings shall not be lapsed.
According to them the transfer of the amount to the government treasury is sufficient for negation of the provisions of section 24, i.e. the land owners shall not be able to claim to retake the land by stating that that they have not received a compensation.
The Decision Of The Supreme Court:
The Supreme Court in its judgement stated that the section 24 commences with a non-obstinate part i.e. it gives an overriding effect to all other requirements of act of 2013. The particular section 24(2) provides for two contingencies, which if either of them is satisfied will lead to lapse of the proceedings under the old act. These two events are that "if the physical position of the land has not been taken yet" or "the compensation has not been paid", in a situation when the award has been declared five years or more preceding to the instigation of the new act.
The Supreme Court interpreted the clause "compensation has not been paid" by understanding the section 31 of the 1894 act which dealt with the imbursement of compensation and mandates the collector to make payment of the compensation and if they are prevented in doing so then they have to deposit the set an amount in the court.
The Honourable court stated that after an award has been made under section 11 by the government then the compensation so awarded shall be tendered to the persons entitled to it. If they do not agree to obtain such amount or if there is lack of capable people or if there is dispute with regard to title of the land for receiving the compensation or about the apportionment of the compensation then the collector shall 'credit the said amount to the court'.
The Supreme Court laid down that after interpreting the section 24 of 2013 act with a reading on the basis of section 31 of the 1894, the expression "compensation has not been paid" should not be given a literal construction but instead should be interpreted liberally because due to that the procedure and process of depositing the compensation as per section 31 of the 1894 in case of happening of any contingency would also be then regarded as the compensation has been paid when such amount has been deposited in the court.
The Supreme Court said that it is an established rule that when a authority is given to do a certain thing in certain way then that thing must be done in that way or should not be done at all. Hence the Supreme Court on the basis of the facts in this present case stated that the award was made on 31 January 2008 and following which notices were given to the land owners for receiving the reimbursement and since they did not come forward to receive the said amount, it was thereafter placed in the state's treasury.
The question is whether the depositing of the amount of reimbursement in the state's treasury is equal to the process when amount is to be paid to the land owners? And for this the Supreme Court answered in negative and said that the credit of amount of reimbursement in the govt.'s treasury is of no use and the obligation to pay the interest also gets paused till the sum is not placed in the court.
Therefore, the Supreme Court stated that on the basis of the facts it gets clarified that the grant with respect to the ongoing land acquisition proceedings had been made by the Acquisition Officer for a period of more than five years preceding to the origination of the new act of 2013. It is established that the reimbursement which was awarded was neither paid to the land owners interested and not it was placed in the court.
Instead the deposit of compensation was made in the state revenue account which is not comparable to the compensation paid to the land owners. Therefore, the Supreme Court held that the land acquisition proceedings shall be considered to have lapsed as per section 24 (2) of the act of 2013. The Supreme Court therefore said that it was not required to discuss the case on merits and the appeal failed and the matter was dismissed with no order as to the costs.
My Analysis:
In this landmark case of Pune municipal corporation, the Supreme Court had by its decision implied that section 24 of the act of 2013 is valid in its retrospective effect and this also clarifies the doubt about the legality of the clause in positive. The above-mentioned judgement acted as an instructive explanation on the concept of applicability of section 24(2) with regards to the expression when "compensation will be deemed to be paid" and laid down the scenarios when compensation if not paid directly to the landowners would still be considered deemed to be paid if deposited in the court of law.
This case came across as a landmark judgement in clarifying the scope of section 24 to some extent and to increase the ambit of applicability of the new act of 2013. However, despite being a landmark judgement in regards to the requirements of section 24 and the new act of 2013, still it does not appear that this judgement is an end point to the dispute.
In this particular case, the land acquisition proceedings were at the stage of award declaration and compensation had to be paid and therefore the issue with respect to this situation was dealt under the section24(2) provisions; but still this judgement doesn't clarify the position of law in cases when the land acquisition proceedings are at different stages of completion process and this is why this present case is a situation specific judgement and not an overall review of section 24 of the act of 2013 as a whole.
This lacuna in interpretation of section 24 gives way to various other cases which can arise in subsequent proceedings. This case served as "ration decidendi" in various other land acquisition proceedings, where the land owners were able to rely on this precedent and overturn their proceedings in the pending matters. This judgement acted an accelerator in increasing the applicability of the new act and lapsing of the ongoing proceedings another old act.
The rule of law which came forward in this decision was that when any land acquisition proceedings is ongoing and for that an award has been declared and compensation has to be made but it is not so made within five years or more preceding to the inauguration of the new act, or in cases when contingencies occur and compensation needs to be deposited in court of law which is not done, then in such cases the land acquisition proceedings shall lapse and whether the land was acquired, without the compensation or not, will not be considered in this current scenario.
In this case due to the contingencies, the compensation could not be paid directly to the landowners and instead it was deposited in the government's own treasury which according to the state was enough to negate the contentions of section 24, i.e. to say even if the compensation was not paid directly to the land owners it was set aside in the government's treasury.
However, the Supreme Court had a different view in the scenario and they held that the state is always mandated to pay the land owner the money whenever any award is declared and it is only in the special circumstances or contingencies as per section 31 of the old act, that the government could deposit the said amount of compensation in the court. Therefore, transfer of compensation to government on treasury is not equivalent to the deposits to be made in the court of law and hence in this particular scenario the Supreme Court dismissed the appeal.
Hence this case became a landmark judgement and stare decisis, which ought not to be disturbed for the proper functioning of the judicial system and to give a consistent position with regards to these provisions of law.
However issues arose with the same provision when in the case of Indore development authority , the similar three judge bench took a diversion from the judgement of Pune municipal corporation and held that when the land owner has not taken the compensation after the award declaration but the payment has been made to the government treasury, then it becomes sufficient to counter the section 24 of the act of 2013 and it is not necessary that the said amount needs to be deposit in the court of law.
Since both these judgements gave a contradictory view and had the same strength of the bench for deciding the matter, this issue was referred to a five- judge bench of the Hon'ble Supreme Court for finally settling down the question on law.
Case Analysis Of
Indore Development Authority v/s Manohar Lal 2
Background Of The Case:
After the precedent set in the Pune Municipal Corporation case11, questions arose on the said judgement in other disputes. Particularly in case of Yogesh Enema v. State of M. P, when Division Bench of the Supreme Court questioned the accuracy of the Court's former verdict in Sree Balaji Nagar Residential Assn. case who had used the precedent set in the Pune Municipal Corporation case. The division bench had then moved on to refer the case to a larger Bench for reconsideration.
Following this a controversy again arose when in the case of Indore Development Authority v. Shailendra 2 (hereinafter referred to as IDA Case I), when a three-judge bench of the supreme court delivered an opposite judgement with the interpretation of Section 24 of 2013 Act.
The facts of that case were that the Indore development Authority wanted to construct ring roads and highways for connectivity in the outskirts of the city for which they wanted to acquire some land, however the land was already disputed since the possession of the lands was with the encroachers and not landowners.
The authority however still went ahead with the land acquisition proceedings and the compensation award was declared subsequently but due to dispute between encroachers and landowners, the owners did not take the compensation.
Following this the authority then deposited the amount with the Land acquisition collector and then moved on with the land acquisition process completion but the landowners objected that the process was not valid since compensation amount has not been paid & it was also not deposited in court of law and hence as per section 24(2) of the 2013 act, the proceedings shall lapse.
The three Judge Bench comprising of Justice Arun Mishra, Justice A.K. Goel and Justice Shantanagoudar overruled the verdict given down in the Pune Municipal Corporation case by another three judgements and give a different opinion. They were opined that the compensation will made under section 24 of the act will be considered to be have been paid if the amount is deposit a government treasury and the same is not necessary to deposit the court of law. They also said that the Pune Case was per incuriam i.e. 'through lack of care' as a judgement.
Following this issue again arose, when conflicts about interpretation of section 24 arose and eventually this conflict was referred to a 5-judge bench of the Supreme Court for solving the issue. However, before the bench could deal with the question in detail, issues were raised with regards to the fact that Justice Arun Mishra was a part of the bench even though he had already authored the IDA Case I which will in turn hamper the current proceedings due to biasness on the same issue.
After this, the bench had heard the arguments about this and eventually decided that the presence of Justice Arun Mishra will not create any bias since it's normal practice that Judges even when in previous case decided the question, overrules his judgement in larger bench cases, and review petitions. It was also held that the judiciary aims at not only settling a case permanently but settling it correctly.
Main Issue:
- The clarification of section 24 of the Act of 2013.
- Whether non-deposit of reimbursement in court under section 31(2) of the Act of 1894 results into lapse of acquisition under section 24(2) of the Act of 2013?
The Hon'ble court in its judgement first clarified the scope of section 24 of act of 2013. They laid down that the section 24 contains a non-obstante clause, i.e. it prevails over all the sections of the act of 2013. Section 24(1)(a) states if the land acquisition proceedings were started as per act of 1894 but award has not been completed, then the provisions of act of 2013 would apply for award determination but such proceedings do not lapse. Section 24(1)(b) states that when in such proceedings award has been made, then such proceedings shall continue as per the provisions of the act of 1894 and those pending proceedings shall be concluded accordingly.
They said that section 24(2) is an exception to the above clause since it states "When an award under section 11 of Act of 1894 has been made before five years or more since the origination of the act of 2013, but still the physical custody of the land has not yet been taken or the reimbursement has not yet been paid then such proposal will now be governed as per the new act of 2013".
This particular provision was in question and the judges decided accordingly:
- The first issue bout this sub-section was whether the word "or" used
between the clause of possession not been taken and compensation not been
paid, has to be read as the word "or" or as "and"? The court held that the
word "or" has to be read as "AND".
The provision is made up of two negatives, i.e. when neither possession of land has been taken nor the compensation has been paid, then land acquisition proceedings shall lapse. If either of them has occurred then proceedings shall continue as per the provisions. The court followed rules of Interpretation and said that when two negatives in a sentence is connected to each other by 'or', then it should be constructed as 'and' conjunctively.
- The issue whether the word paid includes only paid to landowners or the
court of law? Or other interpretations exist? The section has the clause
that the proceedings shall lapse in case the compensation has not been
"paid" which as per section 24 means paid to landowners and when read along
with the contingencies of section 31 include court of law. However, whether
it can be paid in government treasury was questioned.
The court also held that the purpose of section 24(2) and section 31 collectively is that sufficient fund should be set aside to be given to landowners and hence if the compensation is set aside with the Collector or in the treasury or in court, then no lapse in proceedings would occur and it would be deemed that compensation has been paid.
The court thereby clarified the scope of section 24 of the act of 2013 and also settled the issues about the interpretation and laid down that section 24 cannot be used for arising new cases on the concluded proceedings and revoking settled disputes or question legality of previous proceedings to invalidate the whole process.
My Analysis:
The judgment of the five-judge bench in this case had been a welcome step as it is a detailed analysis of section 24 in its scope and applicability. It clearly clarified the meaning of the provisions in question, particularly section 24(2). The judgment firstly settled the issue by holding that this provision is made up of twin conditions i.e. possession and compensation both
need to be not be present for the proceedings to lapse. The judgement clarified that in case if one of the steps have been satisfied i.e. if either possession has been taken place or the compensation has been paid, then in such scenario the proceedings shall not lapse.
The subsection 24(2) acts as a penal provision and makes the proceedings lapse in cases where neither the possession of land has been taken and nor the compensation has been paid. This provision is penal in the sense that it acts as a penalty to the authorities in case they delay in the land acquisition process and here if after the award has been made 5 years or before the new act of 2013 but the steps required have not been completed then the proceedings will lapse.
This in turn will make the authorities work again from scratch if they want to acquire the land as they would then be required to start the proceedings afresh under the new provisions. The judgement in this regard gave a final interpretation to be followed and thus set up uniform practice of land acquisition process.
This case also finally settled the issue about when the compensation is deemed to be paid other than the deposit to landowners and the courts in case when landowners do not consent to receive such amount or if there is lack of competent people or if there is dispute with regard to title of the land for receiving the compensation or about the apportionment of the compensation.
The court also held that the purpose of section 24(2) and section 31 collectively is that sufficient fund should be set aside to be given to landowners and hence if the compensation is set aside with the Collector or in the treasury or in court, then no lapse in proceedings would occur and it would be deemed that compensation has been paid and therefore deposit of the amount to treasuries doesn't lead to lapse in the proceedings.
The section 24 and particularly the subsection 24(2) focus on the aspect of time, which is of utmost importance here. It is only because of the lag in time of the steps to be followed, that the proceedings shall lapse and fresh process needs to be initiated.
The court had also used this judgement to establish that the objective of the new act and the section 24 was not to revoke the already settled proceedings of the period prior to the new act and create double cases.
This in turn helped the establishing the retrospective limit of the section and solved majority of the proceedings, which were ongoing due to the fact that they were restarted in the first place due to wrong interpretation of the section 24.
Therefore, in my opinion this judgment helped in setting up a wholesome explanation of the section 24 of the act of 2013 and has settled all issues about its interpretation.
Conclusion
The Constitution of India guarantees the right to obtain, hold or dispose of property subject to rational limitations by the State in interest of general public. This reasonable restriction allowed the administration to acquire land for public resolutions and the practice existed even before the Independence era. The land acquisition process was governed under the Land Acquisition Act, 1894. This act was however based on colonial interests and was opposed to the general welfare of the public, which led to exploitation, by the government's hands.
To tackle the issues, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act of 2013 was enacted to replace the old act. The new act aimed to enhance the land acquisition process in favour of landowners, make process more transparent and provide safeguards to them.
The section 24of the act of 2013 in particular was drafted to help the new act establish itself quickly. However, when issues arose about the interpretation, after series of judgements eventually the five-judge bench of Supreme Court settled the dispute.
The issue about the interpretation of section 24 and its scope took a decade to settle but, in the end, it clarifies that the aim of section 24 is not to reopen settled proceedings or provide opportunities for belated questions but only to provide opportunity to those cases where 5 years or more have passed in the process of land acquisition possession has not been taken, and compensation has not been deposited. The section aims to tackle the lack of time management by the authorities and default on their part.
The final five judge bench judgment therefore set up the stare decisis i.e. the settled principle of law which ought not to be disturbed. This will now help in maintain the status quo and consistency in the cases which were earlier not there due to different interpretation of the section.
Therefore, to conclude, I would say that the case of Indore Development Authority Vs Manohar Lal is now the landmark judgment whose ratio decidendi settles the interpretation of section 24 of the new act.
Bibliography
- https://indiankanoon.org/doc/185065833/
- https://indiankanoon.org/doc/49625991/
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