RFCTLARR Act - Owner Cannot Pray For Lapse Of Land Acquisition After Refusing To Accept Compensation : Supreme Court

The Supreme Court has held once the land owner refuses to accept the compensation offered by the Land Acquiring Body, thereafter the land owner cannot to pray for lapse of acquisition on the ground that the compensation has not been paid.

The Bench comprising of Justice M.R. Shah and Justice Manoj Misra, while adjudicating an appeal filed in State of Gujarat & Ors. v Jayantibhai Ishwarbhai Patel, has reiterated that a land acquisition would deem to lapse under Section 24(2) of the Land Acquisition Act, 2013, if there is a lapse on the part of the Acquiring Body/beneficiary in not taking the possession as well as not paying the compensation. Twin conditions must satisfy.

BACKGROUND FACTS

Mr. Jayantibhai Ishwarbhai Patel (“Land Owner/Respondent”) was the owner of the land situated in Vadodara, Gujarat (“Land”). The Land was proposed to be acquired, alongwith adjacent agricultural lands, under Land Acquisition Act, 1894 (“Act, 1894”) for re-settlement of Narmada Project oustees. A Consent Award was passed on 11.06.1993 and followed by orders to pay 90% and 10% compensation to the Land Owner.

However, the Land Owner refused to accept compensation and requested release of his Land from the acquisition. On 07.03.1995 the Assistant Commissioner passed an order, recording that the order for payment of 90% and 10% of the compensation have been passed but the Land Owner did not accept compensation and has applied for cancellation of acquisition.

The Land Owner continued to be in possession of the Land till 2009 and carried on cultivation. Subsequently on 21.01.2009, the Assistant Commissioner cancelled the order dated 07.03.1995 and restored the order for 90% and 10% amount of compensation. It was observed that the acquisition of the land was complete and the same vests in Sardar Sarovar Rehabilitation Agency; and once an order for compensation is passed, it is mandatory to make the payment of the same. On 05.04.2010 the Special Land Acquisition Officer issued a notice to the Land Owner to accept the compensation.

In place of accepting compensation, the Land Owner filed a writ petition before the High Court, seeking setting aside of the Consent Award dated 11.06.1993. The Land Owner argued that his withdrawal of consent was accepted by the Special Land Acquisition Officer and neither compensation was paid nor was the possession taken away. Therefore, the authority cannot implement the Award dated 11.06.1993 after 15 years by insisting on payment of compensation.

In the meanwhile, the Act, 1894 was replaced with Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (“Act, 2013”). At the strength of Section 24(2) of the Act, 2013, the Land Owner contended that the acquisition proceedings are deemed to have lapsed under Section 24(2) of the Act, 2013.

The Single Judge of High Court set aside the order dated 05.04.2010 while observing that such order could not have been passed after 15 years of accepting the Land Owner’s request to cancel the acquisition. Thereafter, the Division Bench of the High Court held that the land acquisition is deemed to have lapsed under Section 24(2) of the Act, 2013 since neither compensation is paid nor possession is taken from the Land Owner. Accordingly, the Division Bench set aside the land acquisition award dated 11.06.1993 qua the Land owned by the Land Owner. A review petition was filed but the same was dismissed.

The State of Gujarat filed an appeal before the Supreme Court against the order of Division Bench of High Court and the dismissal of Review Petition.

SUPREME COURT VERDICT

Possession taken over by drawing of panchnama is legally permissible

The Bench observed that pursuant to the Consent Award, the Land Owner refused to accept the compensation and insisted on withdrawal of acquisition. The State of Gujarat submitted before High Court that the possession of the Land was taken by drawing spot panchnama at the time of passing of the Consent Award. However, the High Court disbelieved the contention and observed that the Land Owner continued to be in possession of Land and also cultivated the same.

The Bench placed reliance on the judgment in Indore Development Authority v Manoharlal and Ors., (2020) 8 SCC 129, wherein it was held that taking over the possession of land by drawing panchnama is a legally permissible mode. It was further held in the case, that acquisition would only lapse under Section 24(2) of the Act, 2013 if the Acquiring Body fails to pay the compensation and does not take over the possession of the land.

Twin requirements: Land acquisition to lapse only when acquiring body fails to pay compensation as well as does not take possession

The Bench observed that for a deemed lapse of acquisition under Section 24(2) of the Act, 2013, there shall be a lapse by the Acquiring Body/beneficiary in not taking the possession as well as not paying the compensation. Twin conditions must satisfy. However, in the Land Owner’s case none of these conditions are satisfied.

On refusal to accept compensation, land owner can’t pray for lapse of acquisition on the ground of non-payment of compensation

While holding that there was no lapse on the part of Acquiring Authority, the Bench observed that it was the Land Owner who refused to accept the compensation. Further, the possession was taken through drawing of panchnama but physical possession could not be taken by Authority due to Land Owner’s reluctance. In this backdrop, the Bench also confirmed that the High Court could not have set aside the Consent Award dated 11.06.1993 and must have considered the conduct of the Land Owner. The Bench observed as under:

“Once the land owner refuses to accept the amount of compensation offered by the Acquiring Body, thereafter it will not be open for the original land owner to pray for lapse of acquisition on the ground that the compensation has not been paid.”

It was held that the Division Bench of the High Court materially erred in declaring that the acquisition is deemed to have lapsed under Section 24(2) of the Act, 2013. Accordingly, the High Court’s order in appeal as well as review has been set aside.

Case Title: State of Gujarat & Ors. v Jayantibhai Ishwarbhai Patel

Citation: 2023 LiveLaw (SC) 247

Land Acquisition - Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013-  Section 24(2) - Once the land owner refuses to accept the amount of compensation offered by the Acquiring Body, thereafter it will not be open for the original land owner to pray for lapse of acquisition on the ground that the compensation has not been paid -Followed Indore Development Authority v Manoharlal and Ors., (2020) 8 SCC 129

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