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Updated: Mar 06, 2020 09:11 IST

The Supreme Court will pronounce its judgement on Friday regarding the issues concerning grant of compensation and lapse of proceedings under Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.

The judgement will be pronounced by a Constitution bench of five judges - justices Arun Mishra, Indira Banerjee, Vineet Saran, MR Shah and Ravindra Bhat.

The judgement will impact various land acquisitions made by different governments under the earlier law, that is Land Acquisition Act, 1894. The matter before the court has an interesting background.

But what exactly is the provision and the controversy before the court?

The Law

What the 1894 law said: Section 31 of the 1894 Act provided for payment of compensation or deposit of the same in the court. This provision required that the Collector should tender payment of compensation to the persons interested who are entitled to compensation. Section 18 provided for reference to court if land owner has any objection to the award of compensation.

If due to happening of any contingency contemplated in Section 31(2), the compensation has not been paid, the Collector should deposit the amount of compensation in the court to which the reference can be made.

The changes in 2013 act: The 2013 law has put in place an entirely new regime for compulsory acquisition of land and provided for new scheme for compensation, rehabilitation and resettlement to the affected families whose land has been acquired or proposed to be acquired or affected by such acquisition.

Section 24 of the 2013 act provides for various scenarios where land acquisition proceedings were initiated under the earlier land acquisition act of 1894 but was not completed.

As per Section 24(1)(a), in case land acquisition proceedings were initiated under the 1894 act but the award has not been passed, then compensation has to be determined under the 2013 Act. Section 24(1)(b) provides that where an award under Section 11 of the 1894 act has been made, then such proceedings shall continue under the provisions of the 1894 act.

However, the all important provision with respect to the current case is sub-section (2) of section 24. This provision provides for the lapse of proceedings initiated under the earlier act, that is 1894 Act, under two circumstances:

First, if the award under 1894 act was made five years or more prior to the commencement of 2013 act but the physical possession of the land was not yet taken by the government.

Secondly, if the award was made five years or more prior to the commencement of the 2013 act but the compensation has not been paid.

Moreover, the section also stated in case of compensation with respect to a majority of landholdings has not been deposited in the account of the beneficiaries, then, all beneficiaries (the land owners) shall be entitled to compensation in accordance with the provisions of the new 2013 act.

Background

In 2014, a three-judge bench of the Supreme Court comprising justices RM Lodha, Madan Lokur and Kurian Joseph - in the Pune Municipal Corporation judgement - held that even if the award of compensation has been made under the 1894 act, unless the compensation is paid to the land owners or deposited before the court, the land acquisition will lapse as provided in Section 24(2) of 2013 act. Deposit of compensation amount in the government treasury will not be sufficient to discharge the obligation, the court said.

In December 2017, a two-judge bench of the Supreme Court, however, took a different view. Since, the Pune Municipal Corporation judgement was by a three-judge bench, the matter was sent to a larger bench.

The larger bench of three judges comprising justices Arun Mishra, AK Goel and Mohan M Shantanagoudar in February 2018 gave a comprehensive judgement in which it took a view opposite to the Pune Municipal Corporation judgement.

It held that non-deposit of compensation in court under section 31(2) of the 1894 act will not result in a lapse of acquisition under Section 24(2) of the act of 2013. Due to the failure of deposit in court, the only consequence at the most in appropriate cases may be of a higher rate of interest on compensation and not lapse of acquisition.

Once the amount of compensation has been unconditionally tendered and it is refused by land owners, that would amount to payment and the obligation under Section 31 of 1894 act and Section 24(2) of 2013 act would be discharged. The court held that it is not open to the person who has refused to accept compensation, to argue that since it has not been deposited in court, acquisition has lapsed. Claimants/land owners after refusal, cannot take advantage of their own wrong and seek protection under the provisions of Section 24(2), the court ruled.

Controversy

This judgement also led to a big controversy because it held the earlier Pune Municipal Corporation order to be per incuriam, that is, a judgement delivered ignoring the law.

As per the established legal principles, if a bench disagrees with the judgement of another bench of equal strength, it should be referred to a larger bench which was not adhered to in this matter.

In fact, immediately after the judgement was delivered, similar matters incidentally came up before a bench comprising justices Madan Lokur and Kurian Joseph who were on the bench which had delivered the Pune Municipal Corporation judgement. They took strong objection to the Indore Development Authority judgement.

Justice Dipak Misra, who was then the Chief Justice of India, formed a Constitution bench to settle the issue.

Issues

Some of the key issues which the court is likely to loook at today are the following:

* What is the meaning of the expression ‘paid’/‘tender’ in Section 24 of the act of 2013 and Section 31 of the act of 1894?

* Whether non-deposit of compensation in court results in lapse of acquisition?

* What are the consequences of non-deposit in court especially when compensation has been tendered and refused by land owners?

* Whether such land owners after refusal can take advantage of their wrong/conduct?