2016 (9) TMI 1586 - SC - Indian Laws

Correct construction of Section 24(2) of The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 - acquisition proceedings had lapsed - as possession had not been taken and as compensation had neither been tendered nor paid to the Petitioner, the requisite conditions of Section 24(2) of The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 would be met - HELD THAT - We are directly concerned with Section 11 under which enquiry and award are to be made by the Collector, Section 12 which states that the Collector is to give immediate notice of his award to persons interested who are not present personally when the award is made; Section 16 which deals with the taking of possession and vesting of land; and Sections 31 and 34 which deal with payment of compensation. On facts, it is clear that neither tender, that is offer to the original claimant nor payment has been made in the manner provided by Section 31 read with Standing Order No. 28 of 1909. In the present case, as has been admitted in the affidavit filed in this Court, the DDA was not ready with compensation payable on the day the award was pronounced, but only handed over such compensation to the Land Acquisition Collector five years after the award was pronounced, that is, in 2002. The Land Acquisition Collector, in its turn, did nothing whatsoever to offer the said sum or pay it to the original owners. On the contrary, by moving an application on the eve of the coming into force of the 2013 Act, and by depositing the said amount of compensation paid to it in the year 2002 only on 30th December, 2013, it is clear that the aforesaid mandatory provision and procedure were not followed by the authorities. The present original land owners' lands were notified for acquisition on 24th October, 1961, of which possession was taken four decades later, in 2000; after which the land owners have yet to see the colour of the paltry amount of compensation offered which has neither been tendered nor paid to them. In the facts disclosed by this case, there could not be stronger facts to hold such acquisition non est in accordance with the object sought to be achieved by Section 24(2) of the 2013 Act. It is important to note that a notice of award Under Section 12(2) to persons interested can only be issued after money is received by the Land Acquisition Collector, and that the said Collector shall not take possession of land unless and until compensation amount is received by him. Further, actual payment to land owners must be made latest within a period of 60 days. It is high time that the State realizes that persons whose property is expropriated need to be paid immediately so as to rehabilitate themselves. Also, it cannot be forgotten that the amount usually offered by way of an award of a Land Acquisition Collector under the 1894 Act is way below the real market value, which is only awarded and paid years later. The physical possession of the land can be said to have been taken on the facts of the present case - appeal dismissed.

Summary

Issues Involved:
1. Correct construction of Section 24(2) of The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
2. Whether the acquisition proceedings initiated under the Land Acquisition Act, 1894, had lapsed.
3. The applicability of the Pune Municipal Corporation v. H.M. Solanki judgment.
4. The impact of Standing Order No. 28 of 1909 on the payment of compensation.
5. The legal consequences of non-payment or non-tendering of compensation.
6. The effect of possession taken by the State on the lapse of acquisition proceedings.
7. The role of subsequent purchasers in the context of compensation disputes.

Detailed Analysis:

1. Correct Construction of Section 24(2) of the 2013 Act:
The Supreme Court revisited the interpretation of Section 24(2) of the 2013 Act, emphasizing that the provision is designed to protect landowners from prolonged acquisition processes without compensation. The section stipulates that if an award has been made five years or more before the commencement of the 2013 Act and either physical possession has not been taken or compensation has not been paid, the acquisition proceedings shall be deemed to have lapsed.

2. Whether the Acquisition Proceedings Had Lapsed:
The Court examined the facts, noting that the award was made on 12th December 1997, possession was taken on 27th January 2000, and compensation was deposited only in 2002. The original landholders argued that as compensation had neither been tendered nor paid, the acquisition proceedings had lapsed under Section 24(2). The High Court of Delhi agreed, declaring the proceedings lapsed, which was upheld by the Supreme Court.

3. Applicability of Pune Municipal Corporation Judgment:
The Court reaffirmed the applicability of the Pune Municipal Corporation judgment, which held that compensation must be paid or deposited in the court to prevent the lapse of acquisition proceedings. The Court rejected the argument that deposit in the treasury was sufficient, emphasizing that compensation must be made available to the landowners as per Section 31 of the Land Acquisition Act.

4. Impact of Standing Order No. 28 of 1909:
The appellants argued that Standing Order No. 28, which allows for compensation deposit in the treasury, should apply. However, the Court clarified that this order complements Section 31 and does not replace the requirement to deposit compensation in court if the landowners are not present to receive it. The Court concluded that the Standing Order did not alter the statutory requirements under Section 31.

5. Legal Consequences of Non-Payment or Non-Tendering of Compensation:
The Court underscored that the statutory scheme mandates the Collector to tender payment of compensation at the time of the award. Failure to do so, and not depositing the compensation in court as required under Section 31(2), results in the acquisition proceedings lapsing under Section 24(2) of the 2013 Act.

6. Effect of Possession Taken by the State:
The appellants contended that since possession was taken in 2000, the acquisition proceedings could not lapse. The Court, however, held that both conditions—possession and payment of compensation—must be fulfilled. Since compensation was not paid or tendered, the proceedings lapsed despite possession being taken.

7. Role of Subsequent Purchasers:
The appellants argued that the presence of subsequent purchasers created a dilemma regarding who should receive compensation. The Court dismissed this argument, noting that the compensation was to be paid to the original owners as per the award. The subsequent sale did not affect the obligation to pay or tender compensation to the original landowners.

Conclusion:
The Supreme Court upheld the High Court's decision, confirming that the acquisition proceedings had lapsed due to non-payment of compensation. The appeals were dismissed, reinforcing the principles established in the Pune Municipal Corporation case and emphasizing the need for timely compensation to landowners in land acquisition cases.