Should Land Acquisition Proceedings Lapse If Landowners Refuse To Accept Compensation? SC Refers Question To Larger Bench [Read Judgment]

The Supreme Court, on Thursday, referred to a larger Bench the question of applicability of Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

The Court was hearing an Appeal filed by the Indore Development Authority (IDA) in the case concerning the land acquisition proceedings pertaining to the land acquired for the purpose of constructing Link Road on the outskirts of Indore city. The IDA had deposited the compensation with the Land Acquisition Collector. The landowners had, however, refused to accept the amount.

The High Court had then ruled that the proceedings had lapsed in view of Section 24 (2) of the 2013 Act. As per Section 24(2), land acquisition proceedings initiated under the Land Acquisition Act, 1894 lapse where the 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. IDA had now approached the Apex Court challenging this decision.

It had submitted that the acquisition was, in fact, complete as the amount had been deposited with the Land Acquisition Collector. It had contended that it was the landowners who had refused to accept the compensation and in that case, the IDA cannot be blamed.

The IDA had further pointed out that in case the landowners do not receive the amount, the Collector was required to deposit the same in the Reference Court, as prescribed by Section 31(2) of the 1894 Act. It submitted that even though this hasn't been done in the present case, the remedy would not be lapse of proceedings but would be payment of higher interest under Section 34 of the 1894 Act.

"It was also urged that the object of such deposit is to prevent unnecessary prolongation of the proceedings and accumulation of Collector’s liability for interest. When a party willfully refuses to receive payment by depositing the money in the court, the liability for interest will cease. It was also urged that section 32 does not intend to give the advantage of one’s own act or the act of the court.

It was also urged that this Court is also bound to prevent the abuse of process of law. The cases which have been concluded are being revived. In spite of not accepting the compensation deliberately and statements are made in the court that they do not want to receive the compensation at any cost and they are agitating the matter time and again after having lost the matters and when proceedings are kept pending by interim orders by filing successive petitions, the provisions of section 24 cannot be invoked by such landowners," the Court observed.

The Bench comprising Justice Arun Mishra and Justice Amitava Roy then noted that a reference as to applicability of the provision has already been made in the case of Yogesh Neema & Ors. v. State of M.P. & Ors..

It further opined that the decision in the case of Pune Municipal Corporation & Anr. v. Harakchand Misirimal Solanki & Ors. did not consider several issues while deciding that the acquisition would be deemed to have lapsed if the compensation for the land acquired under the 1894 Act has not been paid to the landowner or deposited with a competent Court.

The Court, thereafter, directed, "There is already a reference made as to the applicability of section 24 in SLP [C] No.10742/2008 -- Yogesh Neema & Ors. v. State of M.P. & Ors. vide order dated 12.1.2016. There are several other issues arising which have been mentioned above but have not been considered in Pune Municipal Corpn. (supra). Thus, here is a case where the matter should be considered by a larger Bench. Let the matter be placed before Hon’ble the Chief Justice of India for appropriate orders."

Read the Judgment Here