2015 (11) TMI 1903 - HC - Indian Laws

Land acquisition proceedings lapse when compensation unpaid and possession not taken within five years under Section 24

The MP HC disposed of appeals challenging land acquisition notifications under Sections 4 and 6 of the Land Acquisition Act, 1894. Following SC precedents ... Challenge to land acquisition proceedings under the Land Acquisition Act - challenge to Notification under Section 4 and 6 of the Land Acquisition Act, 1894 - HELD THAT:- The manner of payment of compensation is contemplated under Section 31 of the Old Act and eventuality any receipt of compensation warrants the Collector to deposit the amount with the Court where the reference can be subjected. Both these aforesaid provisions, particularly the provisions of Section 24 has been interpreted by the Apex Court in the case of Pune Municipal Corporation & another [2014 (1) TMI 1643 - SUPREME COURT] and after considering various aspects of the matter, held that if the physical possession of the land has not been taken by the acquisition authority then the award has been passed and if compensation has not been paid to the landowners or has not been deposited by the appropriate forum then the proceedings initiated under the Old Act is deemed to have been lapsed. Similar is the view taken by the Apex Court in the case of SHARMA AGRO INDUSTRIES VERSUS STATE OF HARYANA [2014 (11) TMI 1290 - SUPREME COURT], wherein also the principles laid down in the case of Pune Municipal Corporation etc., has been considered and principle reiterated. It is, therefore, clear from these judgments and interpretation of Section 24 of the New Act and implication of Section 31 of the Act of 1894 that if after passing of the award and five years prior to coming into force of New Act, amount is not paid in accordance to the requirement of law, the entire proceedings lapsed. If aforesaid principle is applied in the present case, it is found that award in question was passed on 27.11.1992 in W.A.Nos.799/06, 514/06 and 772/06 and in W.A. No.250/08 and W.A. No.323/08 the award for acquired lands was passed on 16/04/2004 and from the averments made by the Indore Development Authority in their reply filed, it is only indicated that the amount of compensation has been deposited with the competent authority and in view of the interim relief granted by the learned writ court as well as by the Division Bench of the Appellate Court, the possession has not been taken over from the present appellants. In this case, even though the reply filed by the Indore Development Authority indicates that neither possession is taken over by them nor compensation has been paid to the beneficiaries, in accordance with the requirement of Section 31 of the Old Act. As held by the Apex Court, mere deposit of the amount in the Government Treasury or with the Revenue Department is not sufficient, it has to be paid to the beneficiaries or deposit in the Court where reference under Section 18 is normally filed - the documents overwhelming available on record to demonstrate that inspite of award having been more than five years prior to coming into force of the New Act, the award of compensation has not been paid to the beneficiaries as required under law nor possession of the land in question has been taken over from the owners and, therefore, in the light of legal principles laid down by the Apex Court as referred, entire proceedings lapsed. Appeal disposed off. Issues Involved:1. Challenge to land acquisition proceedings under the Land Acquisition Act, 1894.2. Applicability of Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (New Act).3. Whether compensation was paid or possession taken within the stipulated time under the Old Act.4. Interpretation of legal provisions regarding lapsing of acquisition proceedings.Detailed Analysis:1. Challenge to Land Acquisition Proceedings:The appellants challenged the notifications under Sections 4 and 6 of the Land Acquisition Act, 1894, and a scheme framed under the Madhya Pradesh Gram Tatha Nagar Nivesh Adhiniyam, 1973. The land in question was acquired for various development schemes, including residential and commercial colonies and a physiotherapy center. The appellants contended that the acquisition proceedings were illegal and unsustainable based on the law laid down by the Apex Court.2. Applicability of Section 24(2) of the New Act:The appellants argued that under Section 24(2) of the New Act, the acquisition proceedings should be deemed to have lapsed as the award was passed more than five years ago, and neither possession was taken nor compensation paid. They asserted that the proceedings initiated in 1989 and concluded with an award in 1992 should be void under the New Act, which came into force on January 1, 2014.3. Payment of Compensation and Possession:The appellants claimed that compensation was neither paid to them nor deposited in the beneficiaries' accounts, and possession of the land was not taken. The respondents argued that the compensation was deposited in the Government Treasury, but the court held that such a deposit does not equate to payment to the landowners. The Apex Court's precedent in Pune Municipal Corporation & Another v. Harakchand Misirimal Solanki & Others was cited, establishing that mere deposit in the treasury does not suffice, and compensation must be deposited in court if not directly paid to the landowners.4. Interpretation of Legal Provisions:The court analyzed Section 24 of the New Act, which provides that if an award under the Old Act was made five years or more before the New Act's commencement and either possession was not taken or compensation was not paid, the acquisition proceedings lapse. The court emphasized that the legal fiction created by Section 24(2) would apply, leading to the lapsing of the proceedings if the stipulated conditions were met. The court further noted that the proviso to Section 24(2) does not apply where compensation for a majority of land holdings has not been deposited in the beneficiaries' accounts.Conclusion:The court concluded that the acquisition proceedings had lapsed because neither possession was taken nor compensation paid as required by law. The writ appeals were allowed, and the impugned judgment was quashed. The court declared the acquisition proceedings void, allowing the respondents to initiate fresh proceedings under the New Act if necessary. No costs were awarded.