CASES-1) Pune Municipal Corp. & Anr vs. Harakchand Misirimal Solanki & ..Ors. on 24

January, 2014

The Pune Municipal Corporation’s decision to expedite the transition from the Land Acquisition Act, 1894 to the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 is a shot in the arm for supporters of the new act. The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (“LARR13”) came into force from January 2014 repealing the erstwhile Land Acquisition Act, 1894 (“LA1894”). The LARR13 received a decidedly mixed reaction while applauded for its stated intention of correcting the injustices of the LA1894, there were multiple areas of uncertainties at the time the LARR13 had been released as a draft. One of the areas of the uncertainties is the operation of Section 24(2) of the LARR13. The said provision states that fresh proceedings for land acquisition shall have to be carried out under LARR13 supplanting the proceedings under the LA1894, in case no physical possession of land has been taken or if compensation has not been paid five years after an award has been made under Section 11 of the LA1894. Effectively, this provision makes the applicability of the LARR13 retrospective in that respect and the ambiguity arose as to how the said provision would work in praxis.

ISSUE BEFORE THE COURT-

Was that whether in view of Section 24(2) of 2013 Act, the land acquisition proceedings initiated under the Land Acquisition Act, 1894 lapsed by virtue thereof more so because the award under Section 11 of the 1894 Act was made more than five years prior to the commencement of 2013 Act and neither any compensation was paid to the owners nor the amount of compensation was deposited in the Court by the Special Land Acquisition Officer.1

COURT PROCEEDINGS-

It was argued on behalf of the respondents-landowners that in view of Section 24(2) of The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 which has come into effecton 01.01.2014, the subject land acquisition proceedings initiated under the Land Acquisition Act, 1894 have lapsed. Thequestion for decision relates to true meaning of the expression: “compensation has not

1 http://www.tcl-india.net/node/178, visited on 5 March 2016

been paid” occurring in Section 24(2) of the 2013Act. A Supreme Court bench of Justice R.M.Lodha, Justice Madan B. Lokur and Justice Kurian Joseph held that the deposit of compensation amount in the government treasury has no purpose and cannot be held to be equal to compensation paid to the landowners/persons interested. It further stated that under section 24(2) (of The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013), land acquisition proceedings initiated under the 1894 (Land Acquisition) Act by legal fiction, are held to have lapsed where award has been made five years or more prior to the commencement of 2013 Act and possession of the land is not taken or compensation has not been paid.

COURT’S DECISION-

It has been held by the apex court that the 1894 Land Acquisition Act has to be strictly followed, as it is an expropriatory legislation. Part V (sections 31-34) of the 1894 Act prescribes the procedure, mode and manner for payment of compensation and the collector, with regard to the payment of compensation, can only act in the manner so provided.2 

While dismissing the plea by Pune Municipal Corporation challenging the Bombay High Court verdict by which it has quashed the acquisition of 43.94 acres for development of a Forest Garden, the apex court said that it is a settled proposition of law that where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all and other methods of implementation are essentially prohibited. Notably, on Jan 31, 2008, award for the compensation for acquiring these lands was made and notices were issued to the landowners to receive the compensation but since they did not receive the compensation, the amount of rupees 27 crore was deposited in the government treasury. Answering its own question, the court had asked that can the deposit of the amount of compensation in the government treasury be said to be equal to the amount of compensation paid to the landowners/persons interested. FACTORS ON WHICH THE SC’S JUDGEMENT WAS BASED ON-

(A) Section 31(2) provides a collector with only two alternatives – to pay the compensation to the landowners or to deposit the same in court. The fact that neither was carried out by the Collector in the instant case meant that the compensation had not been “paid” for the purposes of Section 24(2) of the LARR13; and

(B)  The LA1894 was an expropriatory legislation and all procedures under the said Act had to be complied with strictly. Since compensation had not been deposited into court strictly as per Section 31(2), the same implied that the procedure under the

2 http://www.livelaw.in/compensation-paid-owner-land-acquisition-valid-says-supreme-court, visited on 5 March 2016

LA1894 had not been complied with and the deposit of the amounts in the government treasury was to no avail. In this regard, the SC noted its two precedents wherein it had been held that deposit of the compensation amounts to the state’s revenue account does not imply that the state is absolved of the liability to pay interest for delayed compensation under Section 34 of the LA1894.