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NEW DELHI: In a major relief to governments and official agencies, the Supreme Court has cleared the air over validity of land acquisition that was initiated but could not be completed in the stipulated five-year period. The court ruled the process will be deemed lapsed only if the possession of land is not complete and no compensation been paid.

The SC further clarified that delay caused due to an interim order passed by a court has to be excluded from the computation of five years. The ruling will help speed up land acquisition and reduce litigation.

A five-judge Constitution bench of Justices Arun Mishra , Indira Banerjee , Vineet Saran , M R Shah and S Ravindra Bhat brought to an end the controversy over the land acquisition law arising from contradictory verdicts of two benches of the apex court on interpretation of Section 24(2) of the Right to Fair Compensation and Transparency in the Land Acquisition Act.

The issue was whether farmers who had refused to accept compensation for land acquired from them could be deemed to have been compensated if the government had deposited the money with the treasury or a court.

A Constitution bench was set up to interpret the section which says that in case of land acquisition proceedings initiated under the Land Acquisition Act, 1894, where an award has been made five years or more prior to the commencement of the 2013 Act, but physical possession of the land has not been taken or the compensation not paid — the said proceedings shall be deemed to have lapsed. The appropriate government, if it so chooses, shall initiate the proceedings of such land acquisition afresh.

Enumerating the provision, the bench said, “The word ‘or’ used in Section 24(2) between possession and compensation has to be read as ‘nor’ or as ‘and’. The deemed lapse of land acquisition proceedings under the Section 24(2) of the Act of 2013 takes place where due to inaction of authorities for five years or more prior to commencement of the said Act, possession of land has not been taken nor has compensation been paid. In other words, in case possession has been taken but compensation not paid, then there is no lapse. Similarly, there is no lapse if compensation has been paid but possession not taken.”

The court said Section 24(2) deals with inaction on the part of the authorities, not delay as a result of dilatory tactics and conduct of landowners. It said the word “paid” used in Section 24(2) cannot be said to include within its ken “deposit”. It brushed aside the plea of the farmers that land acquisition be invalidated if compensation amount is deposited in the treasury instead of court.

Observing that farmers should not be allowed to take advantage of litigation initiated by them against acquisition, the bench said time lapsed in court proceedings be excluded from the five-year limitation period. It said they cannot be allowed to take advantage of delaying tactics.

“...when the landowner does not accept the amount, but seeks a 202 reference for higher compensation, there can be no question of such individual stating that he was not paid the amount (he was determined to be entitled to by the collector),” it said.

