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Would Land acquisition proceedings lapse if owners refuse to accept compensation under Section 24(2) of the Land Acquisition Act, 2013? – Referred to Larger Bench

The bench of Justices Arun Mishra and Amitava Roy referred the question whether Land acquisition proceedings would lapse if owners refuse to accept compensation under Section 24(2) of the Land Acquisition Act, 2013 for consideration of a larger bench. The question was referred in view of similar matters already referred to a larger bench i.e Yogesh Neema & Ors. v. State of M.P. & Ors

The Indore Development Authority decided to acquire land for the purpose of constructing Ring Road and Link Road on the outskirts of Indore city in 1995. The ring road was fully constructed and land was acquired for the purpose of constructing Link Road, for joining the major road to the Ring Road. Possession of the land was with the encroachers and not the landowners and the compensation was deposited by the IDA with the Land Acquisition Collector. However, the land owners even though were informed of the same refused to collect it. The prayer for acquisition of land was made on 06.02.1991 and compensation was deposited with the Land Acquisition Collector on 02.03.1994. Notifications under Section 4 was issued on 23.12.1994. Section 17(1) was also invoked and enquiry under section 5A was dispensed with. Declaration under Section 6 was published on 17.3.1995 under the Land Acquisition Act, 1894. Respondent No.1 – owner filed objections before the Land Acquisition Officer claiming compensation of Rs.32,50,000/- and Award was passed by the LAO on 14.3.1997 and the sum awarded to respondent No.1 was Rs.7,90,813/-.

A writ petition was filed seeking for quashing of the proceedings which was allowed holding that the scheme had lapsed on the expiry of three years and that the enquiry under Section 5A was illegally dispensed with. A Letters Patent Appeal was preferred before the Division Bench which ordered status quo but later dismissed the appeal as being not maintainable. The Supreme Court later remitted the matter to the High Court to file writ appeal under the provisions of the Madhya Pradesh Uchcha Nyayalaya (Khand Nyaypeeth Ko Appeal) Adhiniyam, 2005 wherein the High Court again ordered status quo. The respondent – owner filed an objection under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The High Court by the impugned order held that the proceedings had lapsed in view of the decisions of the Apex Court in Pune Municipal Corporation & Anr. v. Harakchand Misirimal Solanki & Anr. (2014) 3 SCC 183 and Shree Balaji Nagar Residential Association v. State of Tamil Nadu (2015) 3 SCC 353.

Senior Counsel, P.S. Patwalia, appearing for the IDA argued that the proceedings had not lapsed and that compensation was offered but was not accepted by the respondents. It was argued that Section 24(2) would apply to a case where compensation has not been tendered to the landowners and has not been deposited with the Land Acquisition Collector for payment. The provisions of section 24 would not be applicable in case there is refusal to accept the compensation and there was litigation by the landowner or on his behalf by successor-in-interest, to quash the land acquisition proceedings in such a case for their own wrong and for non-acceptance of compensation, it could not be claimed by such incumbents when they have themselves obtained interim orders from the court or where the proceedings have been illegally quashed by the High Court and an appeal etc. is pending to invoke the benefit of the provisions of section 24 of the Act of 2013. It was urged that the expression used ‘compensation has not been paid’ in section 24(2) does not relate to deposit of the amount as envisaged under section 31(2) of the Act of 1894. The proviso to sub-section (2) of section 24 uses the expression “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”. It was also submitted that section 24 in fact is attracted to a case where there is deliberate failure on the part of the acquisitioning authority not only to tender the amount but also where no arrangement has been made and the amount has not been deposited with the Land Acquisition Collector, and the land has been acquired. It was urged that in case landowners do not consent to receive the amount, the Collector was required to deposit it in the Reference Court as provided in section 31(2) but failure to make the deposit has been culled out in the Act itself as provided in section 34 and that proceedings would not lapse.

It was also submitted by that in case of failure to deposit the amount before the Reference Court where the “reference would be submitted”, the only consequence to follow would be higher rate of interest as per the amended provision of section 34. A failure to deposit the amount in the Reference Court entails the consequence of attraction of section 34. Thus, the proceedings would not lapse under the Act of 1894. When it was so contemplated that under the Act of 1894 the provisions of section 24 cannot be assigned that meaning which would invalidate the proceedings owing to the procedural lapse of deposit of the amount in the court where the reference would be submitted.

It was also urged that section 31 of the Act clearly shows that consequence of non-compliance of sub-section (1) or sub-section (2) thereof is not that of the acquisition proceedings becoming invalid and reliance was placed on Hissar Improvement Trust vs. Rukmani Devi and Anr. (1990) (Supp) SCC 806. Reliance was also placed placed on Shri Kishan Das & Ors. v. State of U.P. & Ors. AIR 1996 SC 274, wherein the Apex held that the liability to pay the interest arises when possession of the acquired land was taken and the amount was not deposited under section 31.

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