"If compensation not paid to owner, land acquisition not valid", says Supreme Court

In alandmark judgment delivered by the Supreme Court in Pune Municipal Corporation & Anr. v. Harakchand Misirimal Solanki & Ors., it has been held that the acquisition would be deemed to have lapsed and would be covered under the 2013 law entitling the landowners to higher compensation, if compensation for land acquired under the 1894 Act has not been paid to the land owner or deposited with a competent court and retained in the treasury.

It has been ruled by the Supreme Court that payments overdue or delayed to landowners will attract higher compensations, and would make such acquisitions void.However, the only requirement is that such an award of compensation should be five years or more prior to the enactment of The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which was notified on Jan 1, 2014.

In these 18 appeals, by special leave, it was argued on behalf of the respondents-landowners that in view of Section 24(2) of The Right to 
Fair Compensation and Transparency in Land Acquisition, Rehabilitation andResettlement Act, 2013 which has come into effect
on 01.01.2014, the subject land acquisition proceedings initiated under the Land Acquisition Act, 1894 have lapsed. The
question for decision relates to true meaning of the expression: 
"compensation has not been paid" occurring in Section 24(2) of the 2013
Act.

A Supreme Court bench of Justice R.M.Lodha, Justice Madan B. Lokur and Justice Kurian Joseph held that the deposit of compensation amount in the government treasury has no purpose and cannot be held to be equal to compensation paid to the landowners/persons interested. It further stated that under section 24(2) (of The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013), land acquisition proceedings initiated under the 1894 (Land Acquisition) Act by legal fiction, are held to have lapsed where award has been made five years or more prior to the commencement of 2013 Act and possession of the land is not taken or compensation has not been paid.

This ruling was delivered by the court while attending the question of the true meaning of the expression: "compensation has not been paid" occurring in Section 24(2) of the 2013 Act. It has been held by the apex court that the 1894 Land Acquisition Act has to be strictly followed, as it is an expropriatory legislation. Part V (sections 31-34) of the 1894 Act prescribes the procedure, mode and manner for payment of compensation and the collector, with regard to the payment of compensation, can only act in the manner so provided. While dismissing the plea by Pune Municipal Corporation challenging the Bombay High Court verdict by which it has quashed the acquisition of 43.94 acres for development of a Forest Garden, the apex court said that it is a settled proposition of law that where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all and other methods of implementation are essentiallyprohibited.

Notably, on Jan 31, 2008, award for the compensation for acquiring these lands was made and notices were issued to the landowners to receive the compensation but since they did not receive the compensation, the amount of rupees 27 crore was deposited in the government treasury. Answering its own question, the court had asked that can the deposit of the amount of compensation in the government treasury be said to be equal to the amount of compensation paid to the landowners/persons interested?