When Does Land Acquisition Proceedings Start Under 1894 Act For The Purposes Of Section 24(1) RFCTLARR Act? Supreme Court To Consider

Section 24 is titled 'Land acquisition process under Act No 1 of 1894 shall be deemed to have lapsed in certain cases'. On Tuesday, Solicitor General Tushar Mehta told the Court that the land acquisition proceedings can be said to have been "initiated" for the purpose of section 24(1)(a) of the new Act if the notification under section 4 of 1894 Act was issued prior to the commencement of the 2013 Act; and hence, in such cases where section 4 notification is issued and no award is made, then the acquisition would not be deemed to have lapsed and only in the procedure of fixation of compensation, the new Act will apply as per the dictum of section 24(1)(a).

Section 4 of the 1894 Act read as follows- Whenever it appears to the appropriate government that land in any locality is needed or is likely to be needed for any public purpose or for a company a notification to that effect shall be published in the Official Gazette and in two daily newspapers circulating in that locality of which at least one shall be in the regional language and the Collector shall cause public notice of the substance of such notification to be given at convenient places in the said locality. Thereupon it shall be lawful for any officer, either generally or specially authorised by such government in this behalf, and for his servants and workmen, to enter upon and survey and take levels of any land in such locality; etc.

Section 5 provided for payment of damages. Section 5A stated that Any person interested in any land which has been notified under Section 4 as being needed or likely to be needed for a public purpose or for a Company may, within thirty days from the date of the publication of the notification, object to the acquisition of the land or of any land in the locality, as the case may be. It further provided that every objection under sub-section (1) shall be made to the Collector in writing, and the Collector shall give the objector an opportunity of being heard and shall, after hearing all such objections and after making such further inquiry, if any, as he thinks necessary, make a report in respect of the land which has been notified under Section 4.

Section 6 of the 1894 Act provided that when the appropriate government is satisfied, after considering the report, if any, made under Section 5-A, that any particular land is needed for a public purpose, or for a Company, a declaration shall be made to that effect under the signature of a Secretary to such government or of some officer duly authorised to certify its orders.

The bench of Justices A. M. Khanwilkar, A. S. Oka and C. T. Ravikumar was hearing SLPs against a 2017 decision of the Punjab and Haryana High Court where it was held that it cannot be said that the acquisition proceedings had been initiated as contemplated by Section 24 (1) of the New 2013 Act as the notification under section 4 of the old 1894 act had been issued before the coming into effect of the New 2013 Act from 01.01.2014.

"Section 24 of the New 2013 Act relates to land acquisition process under the Old 1894 Act to be deemed to have lapsed in certain cases. The said heading of Section 24 is for providing of lapse of proceedings under the Old 1894 Act in certain cases. Sub-section (1) (a) thereof mentions that notwithstanding anything contained in the New 2013 Act, in any case of land acquisition proceedings initiated under the Old 1894 Act, where no award under section 11 of the old 1894 act had been made, then all provisions of the new 2013 act relating to the determination of compensation are to apply. Therefore, for the applicability of the provisions of clause (a) of sub-section (1) of Section 24 of the New 2013 Act are that the proceedings under the Old 1894 Act must have been initiated. It is only then that where no award under section 11 of the old 1894 act had been made, then, the provisions of the new 2013 act for determining the payment of compensation are to apply. Initiation of proceedings under the Old 1894 Act is a sine qua non for the applicability of the New 2013 Act for the purpose of determining the payment of compensation. With the mere issuance of notification under section 4 of the old 1894 act on 28.10.2013 before the New 2013 Act came into force from 01.01.2014, it cannot be said that the land acquisition proceedings had been initiated and consequently the Award having not been passed, the provisions relating to the determination of compensation in terms of the New 2013 Act were to apply. In fact, it is the declaration under section 6 of the old 1894 act which has an element of firmness of the proposed acquisition being finalised that it can be said that the acquisition proceedings had been initiated. What was a mere proposal under Section 4, it was said, becomes the subject-matter of a definite proceeding for acquisition under the Old 1894 Act. The declaration under Section 6 having been issued on 27.10.2014 after the New 2013 Act had come into effect would clearly spell out that the land acquisition proceedings had not been initiated under the Old 1894 Act before the New 2013 Act came into force. In the circumstances, the provisions of Section 24 (1) of the New 2013 Act would not apply and the acquisition proceedings being conducted under the Old 1894 Act shall be deemed to have lapsed", the High Court had concluded.

On Tuesday, SG Tushar Mehta began to submit, "Section 24 of the Act (of 2013) was introduced as a transitory provision, it was not supposed to be used perennially. Essentially, the demarcating line is the award- pre-award and post-award. Since the section 24(1) starts with the expression 'Notwithstanding anything contained in this Act, in any case of land acquisition proceedings initiated under the Land Acquisition Act, 1894...", the word which is to be examined is 'initiated'; 'initiated; under the old Act. Now 24(1)(a) says 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. So the proceedings will not lapse but the new law regarding fixing compensation will apply. Then (1)(b) says 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...Now 24(2) makes an exception in case of public projects which were ongoing when the new Act came into force and seeks to also protect the interest of the landowner. So subsection (1) has an exception in (2). (1) says if no award is declared, then you declare the award as per method of fixation of compensation under the new Act. If the award is declared, then it proceeds under the old Act. The exception is that if the award is made 5 years or more prior to the commencement of the new Act, but possession is not taken or the compensation has not been paid, the said proceedings shall be said to have lapsed and the appropriate government if it so chooses shall initiate proceedings of such land acquisition afresh in accordance with the provisions of the new Act. The Proviso to (2) says where an award has been made and compensation in respect of a majority of land holdings has not been deposited in the account of the beneficiaries, then, all beneficiaries specified in the notification for acquisition under section 4 of the said Land Acquisition Act, shall be entitled to compensation in accordance with the provisions of this Act"

"Subsection (1) takes care of the interest of those public projects which were ongoing, that we will not permit lapsing, subject to the conditions stipulated, so that the entire time schedule does not go one year back or two years back. When can the proceedings be said to have been initiated- the main question is this. Your Lordships will have to define 'initiate'- whether it is section 4 stage or section 6 stage…Subsection (2) protects the right of the land holder. If there is a delay on the part of the acquiring authority, either for taking over possession or for making the payment, and five-year period has lapsed, then the proceedings will lapse and you will have to initiate afresh…", he continued.

"Initially, section 24 was in a different format. NHAI, all state governments, all stakeholders were invited for reformation in the section 24. They had apprehension as to what would happen to ongoing projects. Thereafter the matter goes to Lok Sabha. It goes to Rajya Sabha. Changes are made in both houses. Post Rajya Sabha, it goes to Lok Sabha again. Eventually, there is a clear application of mind by the legislature to balance the rights of the public projects which are in hundreds and involving thousands of crores in such a way that minimum lapsing take place. That intention can be fulfilled only when Your Lordships are pleased to accept the submission that section 4 is the trigger point. If section 4 notification is issued and no award is made, then in the procedure of fixation of compensation, the new Act will apply. In my submission, the initiation point has to be section 4 only", he averred.

"The purpose of the new Act was to expand the scope of public projects and give more power to acquiring body to acquire the land for public purpose while taking care of the interest of the landowners. The intent, in 2013 when it was introduced, was the development of the country. It is evident from the definition of 'Public purpose' in section 2(za) of the new act", he advanced.

"Public purpose definition is now expanded under the new act. The intention of the legislature in section 24 would become clear that the intent in the transitory provision is that minimum number of public projects are stalled and have to start afresh. The purpose of the legislature in the new act is to ensure that section 4 onwards things may have happened, it is not putting the clock back, delaying the public projects", told the SG.

"Look at the history as to how section 24 came to be in the present form. Initially, the 2011 bill which is the precursor to 2013 Act provided for the lapsing of the acquisition at the first instance (section 24, as it was in the 2011 Bill, provided that where a notification under section 4 of the Land Acquisition Act, 1894 was issued before the commencement of this Act but the award under section 11 thereof has not been made before such commencement, the process shall be deemed to have lapsed and the appropriate Government shall initiate the process for acquisition of land afresh in accordance with the provisions of this Act),,,the Ministry of Urban Development itself raise some apprehensions before the Parliament. It was felt that land acquisition proceedings once initiated under the old act may be deemed to be allowed to be continued under the corresponding clauses of the LARR bill instead of getting lapsed. It was felt that that would be detrimental for important infrastructural projects and lead to deleterious time and cost escalation…Then there was a middle way suggested that don't direct that the proceedings will lapse but that they will continue from the same stage which existed on 1.1.2014 but then the new dispensation for determination of compensation, rehabilitation and resettlement will apply. An amendment to this effect was made in the 2011 Bill on March 5, 2013 (The amendments provide that: (a) where no award has made under the 1894 Act, then all the provisions of the Bill relating to compensation and R&R shall be made applicable to the acquisition)…", continued the SG.

"Section 24 in its present form is a result of the legislative wisdom to keep the provision open ended and not restricted with a view to not unsettle the past transactions based on unrealistic and unnecessary requirements and thereby to adversely affect the progress of numerous ongoing public projects and infrastructure projects throughout the country", he urged.

Next, the SG indicated that the state of Haryana has amended section 24 with the result that in section 24 of the principal Act, after sub-section (1), the following Explanation shall be inserted, namely:- "Explanation.-For the purpose of this sub-section, a land acquisition proceeding shall be deemed to have been initiated under the Land Acquisition Act, 1894 where notification under section 4 of the said Act has been published in any form under sub-section (1) of the said section"

Referring to the Punjab and Haryana High Court judgment, the SG advanced, "To say that section 4 is merely a ministerial act may not be the correct interpretation of the provision. As a landowner, can I not challenge ? I can. And then the government will have to satisfy that in view of the material before us, this project is required for public purpose and the purpose is a public purpose"

Justice Khanwilkar: "The entire logic of the Punjab and Haryana High Court seems to be that section 4 is only in the nature of a preliminary enquiry and therefore, a ministerial act…"

SG: "The impugned judgment says there is no application of mind at that stage. But in section 4, you apply your mind, take a decision, come to a conclusion and then it enables you to enter into a survey. It is not just for the purpose of survey"

Justice Khanwilkar: "On the contrary, section 4 notification can then be set aside on that ground that there is no application of mind"

The SG then relied on a conflicting opinion of the Bombay High Court in its decision of December, 2021 where the High Court ruled that the land acquisition proceeding stands initiated on issuance of preliminary notification under Section 4 of the Act for the purposes of Section 24 of the New Act. "Having relook to the provisions of Section 4(1), 5-A, 6, 8, 9 and 11 of the Old Act, it reveals that the process of land acquisition commences from issuance of notification under Section 4(1) under which the Government first time expresses its desire to acquire a land in the locality. It was followed by a survey, which was permitted in terms of Section 4(2) of the Act. Since it is a compulsory acquisition, objections are called and heard in terms of Section 5-A. The Collector used to decide the objections as well as send report to the appropriate Government. Upon which, the Government expresses its definite intention to acquire particular land by way of declaration under Section 6 of the Act. As such the whole process begins from Section 4 notification and would culminate in passing award in terms of Section 11 of the Old Act. Notably, the notification under Section 4(1), is a mandatory initial step of the process. In several decisions, it has been held that requirement of giving public notice in terms of Section 4, is a mandatory step and on its non-compliance, would vitiate the proceedings. These mandatory steps cannot be kept out of the whole process. In other words, unless the first step contemplated under Section 4 is complied, the matter cannot be proceeded. Next step of calling and entertaining objections under Section 5-A, also assumes significance since the same is also a statutory requirement failing which proceeding would vitiate…The mandatory nature of requirement of preliminary notification under Section 4 and calling objections under Section 5-Aconveys that these are essential steps, which must be followed before issuance of declaration under Section 6 of the Act. It means that the process commences from the preliminary notification under Section 4 of the Act and on its mandatory compliance coupled with procedure under Section 5-A, the stage of declaration under Section 6 would come. Therefore, in our view publication of preliminary notification under Section 4 is the first or initial step, from which the entire process begins. The plain reading of the scheme indicates that declaration of Section 6 is an interregnum step of the process which comes later on earlier mandatory compliance. Therefore, it cannot be said that the process stood initiated only on declaration under Section 6 by ignoring earlier essential steps. In other word, when once the earlier steps are held to be mandatory the next step shall have to be construed as the further step in the process meaning thereby it does not amount to initiation of land acquisition proceedings", the Bombay High Court has held.

Background

In its impugned judgment, the conclusions of the Punjab and Haryana High Court are as follows-

(a) The proceedings in pursuance of notification under section 4 of the old 1894 act are limited only for purposes of conducting a preliminary inquiry for carrying out the survey and suitability of the land proposed to be acquired. Besides, apprise the landowners of the appropriate Governments intention to acquire the land so that they can file objections, if any and also hear the objections. (b) For the purpose of payment of compensation, the date of notification under section 4 of the old 1894 act is to be taken for the purpose of fixing the rate to be paid as after publication of a notification the land prices freeze and there are no further transactions, besides, if there are sales at the said stage, these are mostly distressed sales. Therefore, even though the date of notification under section 4 of the old 1894 act is taken as the date for the determination of the rate of compensation but nevertheless is not to be taken as the date of initiation of proceedings under the Old 1894 Act. The proceedings for acquisition of land can be said to be initiated only after due application of mind which is the stage of declaration under Section 6 of the Old 1894 Act. (c) The Legislature by Section 24 (1) of the New 2013 Act has provided for the land acquisition process deemed to have lapsed in certain cases under the Old 1894 Act. It is provided that notwithstanding anything contained in the New 2013 Act in any case the land acquisition proceedings initiated under the Old 1894 Act where no award under Section 11 thereof had been made, then all the provisions of the new 2013 act relating to determination of compensation are to apply. The applicability of the provisions of the new 2013 act for payment of compensation would only be if proceedings under the Old 1894 Act had been initiated before 01.01.2014 which is the appointed day for the enforcement of the New 2013 Act. (d) The applicability of Section 114 of the New 2013 Act which deals with repeal and savings is clear to the extent it envisages that the Old 1894 Act shall stand repealed. The effect of Sub Section (2) is that save as otherwise provided in the New 2013 Act, the repeal under Sub Section (1) shall not be held to prejudice or effect the general application of Section 6 of the 1897 GC Act. Repeal is not a matter of mere form but is of substance depending on the intention of the Legislature. If the intention indicated either expressly or by necessary implication in the New 2013 Act was to abrogate or wipe off the Old 1894 Act wholly or in part then it would be a case of total or pro tanto repeal. The repeal in respect of the Old 1894 Act is total insofar as Sub Section (1) of Section 114 of the New 2013 Act provides;however, by Sub Section (2) it does not prejudice or affect the general application of Section 6 of the 1897 GC Act. (e) The New 2013 Act provides for several contemporary, progressive and socially beneficial legislative measures breaking away from the confines of the past archaic law and provides mechanisms for determination of social impact and public purpose which is not there in the Old 1894 Act. The New 2013 Act is to be leaned towards providing for the beneficial provisions of legislation to the landowners whose land is sought to be acquired so that they get the benefits of the new legislative dispensation. (f) The notification issued under section 4 of the old 1894 act before the appointed day i.e. 01.01.2014 under the New 2013 Act would continue to remain operative in terms of Section 6 and Section 24 of the 1897 GC Act only if the proceedings under the Old 1894 Act have been initiated before 01.01.2014 which would be that there has been due application of mind followed by declaration under Section 6 of the Old 1894 Act. (g) A notification published under section 4 of the old 1894 act in the official Gazette but in the newspaper later after the commencement of the New 2013 Act on 01.01.2014 would not be sustainable in law as the last dates of such publication and the giving of such public notice is to be taken as the date of the publication of the notification. It is only on the publication of the last of the notification that it can be said that there was notice to the affected parties so as to enable them to file objections. (h) The hearing of objections under Section 5-A and the publication of notification under section 6 of the old 1894 act would not be permissible after its repeal and after commencement of the New 2013 Act from 01.01.2014 as the proceedings cannot be said to have been initiated under the Old 1894 Act in case the declaration under Section 6 thereof had not been issued and it is only when the declaration is issued that the land acquisition process can be said to have been initiated. In other words, in case a declaration in terms of Section 6 of the Old 1894 Act is not notified before 01.01.2014, the land acquisition proceedings cannot be said to have been initiated and therefore, would lapse by virtue of Section 24 (1) of the New 2013 Act.