Lapse of Land Acquisition: Legal Analysis

Vide aforesaid order, the Writ Petition filed by the Respondent no.1 invoking Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (hereinafter referred to as “ the 2013 Act ”) was allowed and it was opined that acquisition in question has lapsed. The High Court found that one of the conditions laid down in Section 24(2) of the 2013 Act having not been complied with regarding payment of compensation to the Respondent no.1, the acquisition has lapsed.

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The learned counsel for the appellant submitted that in view of the Constitution Bench judgment of this Court in Indore Development Authority v. Learned counsel for the appellant further submitted that the Respondent no.1 herself had filed application on 06.05.2009 before the Land Acquisition Collector for release of compensation. The Constitution Bench of this Court in Indore Development Authority’s case (supra) has opined that satisfaction of either of the conditions namely taking possession of the acquired land or payment of compensation to the landowners would be sufficient to save the acquisition from being lapsed in terms of Section 24(2) of the 2013 Act.

The deemed lapse of land acquisition proceedings under Section 24(2) of the 2013 Act takes place where due to inaction of authorities for five years or more prior to commencement of the said Act, the possession of land has not been taken nor compensation has been paid. The consequence of non- deposit is provided in the proviso to Section 24(2)

in case it has not been deposited with respect to majority of landholdings then all beneficiaries (landowners) as on the date of notification for land acquisition under Section 4 of the 1894 Act shall be entitled to compensation in accordance with the provisions of the 2013 Act. Once award has been passed on taking possession under Section 16 of the 1894 Act, the land vests in State there is no divesting provided under Section 24(2) of the 2013 Act, as once possession has been taken there is no lapse under Section 24(2).

It does not revive stale and time-barred claims and does not reopen concluded proceedings nor allow landowners to question the legality of mode of taking possession to reopen proceedings or mode of deposit of compensation in the treasury instead of court to invalidate acquisition.”

It is the admitted case of Respondent no.1 that she was not the recorded owner of the land at the time of issuance of Notification under Section 4 of 1894 Act or even at the time of the passing of the Award.

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Payment of compensation under the 1894 Act is provided for by Section 31 of the Act, which is to be after passing of the award under Section 11.

Section 31(1) enacts that the Collector has to tender payment of the compensation awarded by him to the persons interested entitled thereto according to the award and shall pay such amount to a person interested in the land, unless he (the Collector) is prevented from doing so, for any of the three contingencies provided by sub-section (2).

when the amount of compensation is not paid or deposited on or before taking possession of the land, the Collector shall pay the amount awarded with interest thereon @ 9% p.a. Thus, once land has been vested in the State under Section 16, in case of failure to pay the compensation under Section 31(1) or to deposit under Section 31(2), compensation has to be paid along with interest, and due to non-compliance of Section 31, there is no lapse of acquisition.

the 1894 Act, means that the persons who are to be paid higher compensation are those who have been recorded as beneficiaries as on the date of notification under Section 4.

Even in a case when offer for payment has been made but not deposited, liability to pay amount along with interest subsist and if not deposited for majority of holding, for that adequate provisions have been given in the proviso also to Section 24(2). If after the process of acquisition is complete and land vest in the State free from all encumbrances with possession, any person retaining the land or any re-entry made by any person is nothing else but trespass on the State land.

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Section 16 of the Act of 1894 provided that possession of land may be taken by the State Government after passing of an award and thereupon land vest free from all encumbrances in the State Government. When the State Government acquires land and drawns up a memorandum of taking possession, that amounts to taking the physical possession of the land.

Thus, it is apparent that vesting is with possession and the statute has provided under Sections 16 and 17 of the Act of 1894 that once possession is taken, absolute vesting occurred.


Case Number: C.A. No.-002994-002994 / 2023

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