Purchaser Has No Right To Claim Lapsing Of Land Acquisition Proceedings Under Sec 24 RFCTLARR Act : Supreme Court

Click Here To Read/DownloadThe Supreme Court, on May 6, held that a person who purchased a land after it vested with the State under land acquisition proceedings has no right to claim lapsing of the proceedings invoking Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

"The purchaser has no right to claim lapsing of acquisition proceedings in view of the recent larger Bench judgment of this Court reported as Shiv Kumar & Anr. v. Union of India & Ors wherein the judgment rendered by two-Judge Bench in Manav Dharam Trust was not found to be a good law. Hence, the purchaser has no right to claim a declaration sought for", the Court observed in the case Delhi Development Authority v. Godfrey Phillips (I) Ltd. And Ors.

A Bench comprising Justices Hemant Gupta and V. Ramasubramanian allowed appeal filed by Delhi Development Authority (DDA) assailing the order of the Delhi High Court which had allowed writ petition seeking declaration that the acquisition proceedings under that lapsed Land Acquisition Act, 1894 had lapsed under Section 24 of the Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The High Court had directed the subsequent purchaser of the land to refund the compensation paid to the land owner by DDA in terms of the judgment of the High Court in Balbir Singh v. Union of India And Ors, whereby acquisition was struck down and directions were issued to owners to payback the compensation amount.

Noting that Balbir Singh v. Union of India And Ors was not affirmed in a later judgment of the Apex Court in Abhey Ram And Ors. v. Union of India, the Supreme Court was of the opinion that when the original land owner does not object to the acquisition proceedings under Section 5A of the Land Acquisition Act, 1894, the purchaser cannot seek the benefit of the order of Balbir Singh, which was not available even to the original land owner.

Legal Background

For the planned development of Delhi, the intention to acquire land was published vide notification dated 05.11.21980. A similar notification was published on 25.11.1980. Consequently, declarations under Section 6 of the Land Acquisition Act, 1894 ("Act") were published on 27.05.1985, 06.06.1985, 07.06.1985 and 26.02.1986 and subsequently, 20.05.1987 onwards the awards were announced.

Writ Petition was filed before Delhi High Court challenging the notification dated 20.05.1987 on the ground it had been published after a period of more than three years of the notification under Section 4 of the Act on 25.11.1980. It was dismissed by the High Court. The Special Leave Petition against the same was withdrawn on 12.09.1989.

In another set of petitions before the High Court the validity of the declaration under Section 6 of the Act was challenged on the ground that the acquisitions proceedings had lapsed in view of the time limit stipulated by the statute for publication of notification under Section 6. This question was dealt with by the Full Bench of the High Court in Balak Ram Gupta v. Union of India, which excluded the period during which acquisition proceedings were stayed and held the notification was within the time limit. The Division Bench of the High Court in B.R. Gupta v. Union of India And Ors. (Balak Ram-II) quashed the notification issued under Section 6, primarily, on the ground of non-adherence to the principles of natural justice. Another set of Writ petitions were filed assailing the action of the Delhi Administration to take possession even when the notification was quashed.

In Balbir Singh v. Union of India And Ors., the High Court held the action to be unsustainable in law and the benefit of the judgment was extended to all landowners. The Union Government's review was subsequently dismissed. The challenge to the same reached the Apex Court in Delhi Development Authority v. Sudan Singh. Largely dismissing the SLP, it held that the benefit of Balak Ram-II would not extend to land in Saidul Azab.

Publication of notification dated 07.06.1985 was also challenged for exceeding the statutory time limit. The High Court dismissed the writ petition. In an appeal titled Abhey Ram And Ors. v. Union of India, the Apex Court was urged to examine whether the benefit of quashing the declaration should be extended to the writ petitioners in the present round of litigation. The Court decided in the negative. In Delhi Administration v. Gurdip Singh Uban And Ors, the Apex Court noted that the three-Judge Bench judgment in Abhey Ram is binding in preference to the judgment of the two Judges in Sudan Singh.

Factual Background

On 25.09.1990 the original land owners entered an agreement to seek land to the Godfrey Phillips (purchaser). The said agreement mentioned that the Land Acquisition Collector had taken possession and paid compensation to the owners. Later, in terms of the judgment of the Delhi High Court in Balbir Singh, the compensation was to be returned and the land was claimed to be released. Vide sale deeds dated 30.08.1991 and 27.02.1991, the land was purchased. The purchaser filed a writ petition before the High Court, which was dismissed by the Division Bench of the High Court on 18.11.2005 on the ground that the vendors, who were the original land owners, had accepted the acquisition proceedings by not objecting to it. The SLP challenging the same was dismissed by the Apex Court on 08.02.2010. Another writ petition was filed after the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (2013 Act) came into force seeking declaration that the acquisition had lapsed under Section 24. The High Court held the acquisition proceedings to have lapsed.

Contentions raised by the appellant

The Counsel appearing on behalf of Delhi Development Authority submitted that the purchaser had no claim right to claim lapse of acquisition proceedings. It was further argued that in view of the judgment of the 3-judge bench of the Apex Court in Abhey Ram which held that the law was not correctly laid down in Sudan Singh, the decision of High Court in Balbir Singh directing landowners to deposit compensation is not a binding precedent.

Contentions raised by the respondent

Placing reliance on Government (NCT of Delhi) v,. Manav Dharam Trust And Anr., Senior Advocate, Mr. Kapil Sibal appearing on behalf of Godfrey Philips (I) Ltd. averred that the purchaser also has a right to claim lapsing of the acquisition proceedings. He submitted that in case of some lands the compensation was not paid by the authorities and in case of some, the compensation so paid was returned by the original owners and the purchaser, therefore it can be construed that compensation was not paid in law.

Analysis by the Supreme Court

The Court referred to the judgment in Indore Development Authority v. Manoharlal And Ors. which laid down the twin test of possession not taken and compensation not paid to declare acquisition proceedings had lapsed. The said conditions, it held, had not been met in the present case. It was noted that under Section 16 of the Act, immediately after taking possession title unconditionally vests in Government.

In Chairman and Managing Director, Tamil Nadu Housing Board And Anr. v. S. Saraswathy And Ors., it was held that Section 6 declarations cannot be said to have been quashed in entirety until and unless the Court specifies the same. It also noted that the Apex Court in State of Haryana And Anr. v. Devander Sagar And Ors. bestows the duty on the landowner to challenge the acquisition proceedings prior to the pronouncement of the award. Pertinently, the Court observed that the original land owner had filed the writ petition in Ishwar Chand Gupta v. Union of India before the High Court, which was dismissed and the SLP against the same was consciously withdrawn after the order to return compensation was passed in Balbir Singh. It held that the Balak Ram II judgment setting aside the Section 6 notification was a judgment in personam and not in rem. It was held that judgment of Balbir Singh does not confer right on the land owners who had not disputed the acquisition proceedings under Section 5A of the Act.

"Since the original land owner never filed any objections under Section 5-A of the Act, the purchaser cannot seek the relief which was not available even to the original land owner."

Moreover, it was stated that the purchaser was aware that the original owner had not disputed the acquisition proceedings. Considering the fact that the order to deposit the compensation in Balbir Singh though affirmed in Sudan Singh, was not approved in Abey Ram, it held that no right accrued to the original land owner or the purchaser. The purchaser had purchased the property after the possession was vested in the State. Merely because DDA has not been able to utilize the land it cannot be inferred that the purchaser continues to be in possession. In view of the judgment in Shiv Kumar And Anr v. Union of India And Ors., the purchaser would not have the entitlement to claim lapsing of the acquisition proceedings.

Case Name: Delhi Development Authority v. Godfrey Phillips (I) Ltd. And Ors.

Citation: 2022 LiveLaw (SC) 476

Case No. and Date: Civil Appeal No. 3073 of 2022 | 6 May 2022

Corum: Justices Hemant Gupta and V. Ramasubramanian

Click Here To Read/Download Judgment 

Headnotes

Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013; Section 24 - Two conditions to be established for acquisition proceedings to lapse - possession not taken and/or compensation not paid - immediately upon taking possession land vested in Government. [Paragraph 29]

Refund of compensation would not amount to the acquisition being lapsed - Balbir Singh v. Union of India And Ors - acquisition was struck down and directions were issued to owners to payback the compensation amount - was affirmed by Delhi Development Authority v. Sudan Singh - three-judge Bench in Abhey Ram And Ors. v. Union of India took a contrary view. [Paragraph 36]

Land acquisition -Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 -  Shiv Kumar & Anr. v. Union of India & Ors. - The purchaser has no right to claim lapsing of acquisition proceedings. [Paragraph 43] - Since the original land owner never filed any objections under Section 5-A of the Act, the purchaser cannot seek the relief which was not available even to the original land owner. [Paragraph 37]