In legislation of 2013,

Section 24.  Land  acquisition  process  under  Act  No.  1  of  1894  shall  be  deemed  to  have  lapsed  in certain  cases.– (1)  Notwithstanding  anything  contained  in  this  Act,  in  any  case  of  land  acquisition proceedings initiated under  the Land Acquisition Act, 1894,— (a)  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;  or (b)  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 shall  continue under  the  provisions  of  the  said Land Acquisition Act,  as  if  the said Act  has not  been repealed.

 (2)  Notwithstanding  anything  contained  in  sub-section  (1),  in  case  of  land  acquisition  proceedings initiated  under  the  Land  Acquisition  Act,  1894  (1  of  1894),  where  an  award  under  the  said  section  11 has  been  made  five  years  or  more  prior  to  the  commencement  of  this  Act  but  the  physical  possession of  the  land  has  not  been  taken  or  the  compensation  has  not  been  paid  the  said  proceedings  shall  be deemed  to  have  lapsed  and  the  appropriate  Government,  if  it  so  chooses,  shall  initiate  the  proceedings of  such land acquisition afresh in accordance  with the  provisions of  this Act:

Provided  that  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.

Section 24(2) states that in case of land acquisition proceedings, if a developer fail to take possession of land acquired under the old laws for five years, or if compensation is not paid to the owner, the land acquisition process would lapse. The process would then have to be re-initiated under LAAR, which would allow the owner to get better compensation.

In 2014, a three judge bench of the apex court in the Pune Municipal Corporation Vs. Harakchand Misirimal Solanki 2014, held that if compensation has been deposited in the bank accounts of the land owners or with the court. It was categorically clarified that money in the government treasury will not be treated as a payment to a land owner. The acquisition proceeding initiated under the 1894 Act before five years before 2013, would lapse if the land in question was not taken control of, or if compensation was not paid to displaced farmers. The judgement delivered by the bench came as a relief for the land owners.

The controversy arose on 08.02.2018 when three judge bench by a majority of 2:1 judgement in Indore Development Authority  Vs.  Shailendra 2018, the court held that land acquisitions could not lapse due to a land-owner’s refusal to accept it, this amount to a discharge of the obligations under section 31(1) of the Land Acquisition Act, 1894. They held the previous judgement i.e., Pune Municipal Corporation Vs. harakchand Misrimal Solanki 2014, to be “per incuriam”.

Some days later, another 3 judges bench comprises of Justice M.B. Lokur, Kurian Joseph and Deepak Gupta stayed the operation of the Indore Development Authority judgment. This bench directed the high courts across the country to not decide any case on the basis of the new ruling, and requested apex court judges to defer hearing and not pass any orders in other cases pending before the Supreme Court.

Following the eruption of the controversy,  the CJI Dipak Misra to constitute a larger bench to settle the controversy. One of these benches was presided over by Justice Arun Mishra and another was led by Justice A.K. Goel — both part of the bench that decided the 2018 Indore Development Authoritycase.

Initially, the case was supposed to be heard by a five-judge bench comprising CJI Ranjan Gogoi and Justice’s N.V. Ramana, D.Y. Chandrachud, Deepak Gupta, and Sanjiv Khanna. However, this bench was unable to assemble after the first week of April.

The interpretation given by the Constitution Bench of the Supreme Court on Section 24 in Indore Development Authority v. Manoharlal is a narrow view.  The judgment closed all windows as it held on the following six counts:- 

1.      The word “or” used between possession or compensation in Section 24(2) will be read as “and”, in other words, the acquisition will only lapse in case possession has not been taken and compensation has not been paid.
2.     The proviso that in case compensation for the majority of land holdings has not been paid will only be read in a situation where there is no lapsing as per Section 24(2); therefore, it cannot be read with Section 24(1).
3.     The word “paid” shall include a deposit of compensation made in a court or treasury.
4.     The mode of taking possession under the 1894 Act and as contemplated under Section 24(2) shall be by drawing of inquest report/memorandum.
5.     The period of subsistence of interim orders passed by the court has to be excluded in the computation of five years as per Section 24(2).
6.     Section 24 applies to a proceeding pending on the date of enforcement of the Act of 2013 i.e. 1-1-2014. It does not revive stale and time-barred claims and does not reopen concluded proceedings nor allow landowners to question the legality of the mode of taking possession to reopen proceedings or mode of deposit of compensation in the treasury.

Conclusion :-

•       Section 24 looked like it brought life to the rights of those whose land was compulsorily acquired by the Government, but the land has not been put to use for the purpose it was acquired or achieve the object of acquisition but, the interpretation is otherwise.
•       Section 24 also sought to undo the wrong in payment of compensation since some persons were deprived of the payment, but the fact that it has been held that payment in treasury will be considered as “paid” has closed the door for the same.
•       So, in essence, the interpretation is that even if one of the conditions, that is, taking over of possession “or” the payment of compensation is fulfilled then the benefit of Section 24(2) will not accrue to a person, the word “or” used in Section 24(2) has to be read as “and”.

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