Section 24(1) RFCTLARR Act Can't Be Invoked If Award Under 1894 Act Couldn't Be Passed Due To Interim Orders Obtained By Land Owners: Supreme Court

The Supreme Court held that landowners who obtained interim orders due to which awards could not be passed under the Land Acquisition Act 1894 could not invoke Section 24(1) of RFCTLARR Act to claim higher compensation.

In a case where on the date of commencement of Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, no award has been declared under Section 11 of the Act, 1894, due to the pendency of any proceedings and/or the interim stay granted by the Court, such landowners shall not be entitled to the compensation under Section 24(1) of the Act, 2013, the Court held.

The bench comprising Justices M R Shah and B V Nagarathna observed that such landowners shall be entitled to the compensation only under the Land Acquisition Act, 1894.

Background

In this case, Allahabad High Court, allowing writ petitions filed by certain land owners, directed the Development Authorities to pay the compensation to the original landowners as per the 2013 Act on the ground that on the date on which the Act, 2013 came into force, no award under Section 11 of the Land Acquisition Act, 1894  was declared with respect to the lands acquired.

Contentions

One of the contentions raised in the appeal filed by the Development Authorities was that, once the award could not be declared because of the pendency of the writ petition and/or the interim stay granted by the High Court, landowners cannot be permitted to take the benefit of compensation under the Act, 2013. It was contended that there was no inaction on the part of the Land Acquisition Officer and/or Authority in not declaring the award under Section 11 of the Act, 1894. On the other hand, the land owners- respondents contended that the moment it is found that no award has been declared under Section 11 of the Act, 1894 at the time of commencement of Act, 2013, the landowner shall be straightaway entitled to the compensation under Section 24(1) of the Act, 2013.

Issue

The issue framed by the Apex Court reads as follows: Whether in a case where an award under Section 11 of the Land Acquisition Act, 1894 could not be declared by the Authority due to the pendency of the writ petition and/or the interim stay granted by the High Court, which was filed by the landowners and consequently as on the date on which the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (Act, 2013) came into force, there was no award declared under Section 11 of the Act, 1894, the original landowners shall be entitled to compensation determined under sub-section (1) of Section 24 of the Act, 2013?

Section 24 RFCTLARR

The provisions states that notwithstanding anything contained in the Act, 2013 in any case of land acquisition proceedings initiated under the Land Acquisition Act, 1894, - a) Where no award under Section 11 of the Act, 1894 has been made, all provisions of the Act, 2013 relating to the determination of compensation shall apply; or b) Where an award under Section 11 has been made, such proceedings shall continue under the provisions of the Act, 1894 as if the said Act has not been repealed.

Necessary to dwell into the reasons as to why no award has been made

The court examined the implication of the words "where no award under Section 11 of Act, 1894 has been made and made the following observations:

"We find that the expression "where no award under Section 11 of the said Land Acquisition Act has been made" has to be read contextually and not by way of a plain reading. This is because a land owner who has an interim order of stay of further proceedings pursuant to the declaration made under Section 6 of the Act, 1894 issued by a Court of law and has thereby restrained the Collector/Land Acquisition Officer from making an award cannot thereafter by contending that as on 01.01.2014, no award has been made by the acquiring authority seek benefit under the provisions of the Act, 2013 by receiving a higher compensation."

Thus, it is necessary to dwell into the reasons as to why no award has been made. As discussed aforesaid, if there is an order of restraint on the Collector or on the acquiring authority and as a result of which, the Collector or the Land Acquisition Officer is not in a position to make an award for reasons beyond his control and in compliance of the interim order granted by a court of law at the instance of the land owner or any other person who may have questioned the acquisition, the period during which the interim order has operated has to be reckoned and if on the date of enforcement of Act, 2013 i.e., 01.01.2014, no award has been made owing to the operation of such an interim order granted by a Court in favour of the land owner, then the provisions of the 2013, Act cannot straightaway be made applicable in the determination of the compensation. This is because, but for the operation of the interim order, the award could have been made under the provisions of the Act, 1894 until 31.12.2013 and then provisions of Act, 1894 would have applied as 22 per clause (b) of sub-section 1 of Section 24. But on the other hand, owing to the operation of the interim order granted by a Court in favour of land owner, the award would not have been made as on 01.01.2014 when the Act, 2013 was enforced.

In our view in such a situation the acquiring authority cannot be burdened with the determination of compensation under the provisions of the Act, 2013. In other words, the land owner cannot, on the one hand, assail the acquisition and seek interim orders restraining the authorities from proceeding further in the acquisition, and on the other hand, contend that since no award has been made under Section 11 of Act, 1894 on 01.01.2014, the provisions of the Act, 2013 should be made applicable in determining the compensation.

The bench then referred to the Constitution Bench judgment in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129,and summarized it as follows:

(i) The time of five years is provided to the authorities to take action, not to sleep over the matter;

(ii) Only in cases of lethargy or inaction and default on the part of the authorities and for no other reason lapse of acquisition can occur;

(iii) Lapse of acquisition takes place only in case of default by the authorities acquiring the land, not caused by any other reason or order of the court;

(iv) The additional compensation @ 12% provided under Section 69 of the Act, 2013 has been excluded from the period acquisition proceedings have been held up on account of the interim injunction order of any court;

(v) If it was not possible for the acquiring authorities, for any reason not attributable to them or the Government, to take requisite steps, the period has to be excluded; 

(vi) In case the authorities are prevented by the court's order, obviously, as per the interpretation of the provisions such period has to be excluded;

(vii) The intent of the Act, 2013 is not to benefit landowners only. The provisions of Section 24 by itself do not intend to confer benefits on litigating parties as such, while as per Section 114 of the Act, 2013 and Section 6 of the General Clauses Act the case has to be litigated as per the provisions of the Act, 1894.

(viii) It is not the intendment of the Act, 2013 that those who have assailed the acquisition process should get benefits of higher compensation as contemplated under Section 24;

(ix) It is not intended by the provisions that in case, the persons, who have litigated and have obtained interim orders from the Civil Courts by filing suits or from the High Court under Article 226 of the Constitution should have the benefits of the provisions of the Act, 2013 except to the extent specifically provided under the Act, 2013;

(x) In cases where some landowners have chosen to take recourse to litigation and have obtained interim orders restraining taking of possession or orders of status quo, as a matter of practical reality it is not possible for the authorities or the Government to take possession or to make payment of compensation to the landowners. In several instances, such interim orders also have impeded the making of an award;

(xi) However, so far as awards are concerned, the period provided for making of awards under the Act, 2013 (sic 1894 Act) could be excluded by virtue of Explanation to Section 11-A, which provided that in computing the period of two years, the period during which any action or proceeding to be taken in pursuance of the declaration is stayed by an order of a court shall be excluded;

(xii) The litigation initiated by the landowners has to be decided on its own merits and the benefits of Section 24(2) should not be available to the litigants in a straightjacket manner. In case there is no interim order, they can get the benefits they are entitled to, not otherwise. Delays and dilatory tactics and sometimes wholly frivolous pleas cannot result in benefitting the landowners under sub-section (1) of Section 24 of the Act, 2013;

(xiii) Any type of order passed by this Court would inhibit action on the part of the authorities to proceed further, when a challenge to acquisition is pending;

(xiv) Interim order of stay granted in one of the matters of the landowners would cause a complete restraint on the authorities to proceed further to issue declaration;

(xv) When the authorities are disabled from performing duties due to impossibility, it would be a sufficient excuse for them to save them from rigour of provisions of Section 24. A litigant may have a good or a bad cause, be right or wrong. But he cannot be permitted to take advantage of a situation created by him by way of an interim order passed in his favour by the Court at his instance. Although provision of Section 24 does not discriminate between landowners, who are litigants or non-litigants and treat them differently with respect to the same acquisition, it is necessary to view all of them from the stand point of the intention of the Parliament. Otherwise, anomalous results may occur and provisions may become discriminatory in itself; (xvi) The law does not expect the performance of the impossible;

(xvii) An act of the court shall prejudice no man;

(xviii) A party prevented from doing an act by certain circumstances beyond his control can do so at the first subsequent opportunity;

(xix) When there is a disability to perform a part of the law, such a charge has to be excused. When performance of the formalities prescribed by a statute is rendered impossible by circumstances over which the persons concerned have no control, it has to be taken as a valid excuse;

(xx) The Court can under its inherent jurisdiction ex debito justitiae has a duty to mitigate the damage suffered by the defendants by the act of the Court;

(xxi) No person can suffer from the act of Court and an unfair advantage of the interim order must be neutralised;

(xxii) No party can be permitted to take shelter under the cover of Court's order to put the other party in a disadvantageous position;

(xxiii) If one has enjoyed under the Court's cover, that period cannot be included towards inaction of the authorities to take requisite steps under Section 24 as the State authorities would have acted and passed an award determining compensation but for the Court's order.

The court observed that these observations would be aptly applicable while interpreting and considering Section 24(1) of the Act, 2013:

"15. In the case of Indore Development Authority (supra), even this Court applied the principle of restitution. It is observed that the principle of restitution is founded on the ideal of doing complete justice at the end of litigation, and parties have to be placed in the same position but for the litigation and interim order, if any, passed in the matter. Applying the principle of restitution, it is further observed that no party could take advantage of a litigation. It is further observed and held that the principle of restitution is a statutory recognition of the rule of justice, equity and fair play. The court has inherent jurisdiction to order restitution so as to do complete justice. This is also on the principle that an unsuccessful litigant who had the benefit of an interim order in his favour cannot encash or take advantage of the same on the enforcement of the Act, 2013 by initially stalling the acquisition process and later seeking a higher compensation under the provisions of Act, 2013. We say so for the reason that if at the instance of a landowner, who has challenged the acquisition, an interim order has been passed by a Court is successful then the proceeding of acquisition or the acquisition notification would be quashed. Then there would be no occasion to determine any compensation. But on the other hand, if a landowner, who has the benefit of an interim order in his favour whilst a challenge is made to the acquisition, is unsuccessful, he cannot then contend that he must be paid compensation under the provision of the Act, 2013 on its enforcement, whereas a landowner, who did not have the benefit of any interim order is paid compensation determined under the provisions of 70 the Act, 1894, which is lesser than what would be computed under the Act, 2013.", the bench observed.

Case details

Faizabad-Ayodhya Development Authority vs Dr. Rajesh Kumar Pandey | 2022 LiveLaw (SC) 504 | CA 2915 OF 2022 | 20 May 2022

Coram: Justice MR Shah and BV Nagarathna

Headnotes

Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 ; Section 24(1) - Land Acquisition Act, 1894 ; Section 11 - In a case where on the date of commencement of RFCTLARR Act, no award has been declared under Section 11 of the Act, 1894, due to the pendency of any proceedings and/or the interim stay granted by the Court, such landowners shall not be entitled to the compensation under Section 24(1) of 2013 Act and they shall be entitled to the compensation only under the 1894 Act - The landowners cannot be permitted to take advantage of the interim order obtained by them due to which the Authority could not declare the award under Section 11 of the Act, 1894 and thereafter contend that in that view of the matter, he/they shall be paid the compensation under Section 24(1) of the Act, 2013, under which a higher compensation will be available to them on determination of the compensation under the Act, 2013. (Para 16-17)

Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 ; Section 24 - Observations made in Indore Development Authority Vs. Manoharlal and Ors., (2020) 8 SCC 129 summarized - These observations would be aptly applicable while interpreting and considering Section 24(1) of the 2013 Act. (Para 12-14)

Principle of Restitution - An unsuccessful litigant who had the benefit of an interim order in his favour cannot encash or take advantage of the same - Restitutionary jurisdiction is inherent in every court, to neutralise the advantage of litigation. (Para 15 - 16)