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Monday, October 19, 2015

whether the compulsory acquisition of the appellant’s land under the Land Acquisition Act, 1894 lapses in view of the provisions of Section 24(2) of The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (for short ‘the Act’). In our opinion, the question must be answered in the affirmative and it must be held that the compulsory acquisition of the appellant’s land has lapsed.=whether the appellant is in possession of the acquired land or whether the respondents are in possession of the acquired land. It is not necessary for us to go into this issue at all. This is for the reason that one of the requirements mentioned in Section 24(2) of the Act is that the compensation should have either been paid to the land owner or should have been deposited in the Reference Court. The admitted position is that the compensation of Rs. 35,52,528/- was neither paid to the appellant nor was it deposited in the Reference Court. It was admittedly deposited in the Government Treasury of the State. The deposit was, apart from anything else, made only after the Act came into force and was perhaps with a view to get over the provisions of Section 24(2) of the Act and the prayer made in I.A. No. 4. Unfortunately, even the deposit of the compensation amount in the Reference Court on 26th June, 2014 does not come to the aid of the appellant under any circumstances and cannot be taken as “deemed payment”. Taking into account all the facts of the appeal as well as the consistent view taken by this Court on several occasions, we have no hesitation in coming to the conclusion that acquisition proceedings in so far as the appellant is concerned lapsed with the enactment of the Act.

                                                                  REPORTABLE

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO. 8468 OF 2015
        (Arising out of Special Leave Petition (C) No. 28369 of 2012)


The Working Friends Coopertive House            .....Appellant
Building Society Ltd.
                                       Versus

The State of Punjab & Ors.                           …Respondents

                               J U D G M E N T

Madan B. Lokur, J.

Leave granted.
The question for consideration is whether the compulsory acquisition of  the
appellant’s land under the Land Acquisition Act, 1894 lapses in view of  the
provisions  of  Section  24(2)  of  The  Right  to  Fair  Compensation   and
Transparency in Land Acquisition, Rehabilitation and Resettlement Act,  2013
(for short ‘the Act’).  In our opinion, the question  must  be  answered  in
the affirmative and it must be held that the compulsory acquisition  of  the
appellant’s land has lapsed.
The Facts
3.     A notification was issued by the State Government under Section 4  of
the Land Acquisition Act, 1894 on 12th November, 1992 proposing  to  acquire
a large chunk of land.  This was followed by a notification under Section  6
of the Land Acquisition Act issued on 21st July, 1993.   Although,  a  large
chunk of land was  acquired  by  virtue  of  these  two  notifications,  the
appellant is concerned only with its land admeasuring about 14.90 acres.
4.      The  compulsory  acquisition  of  the  appellant’s   land   led   to
proceedings  for  adjudication  of  the  compensation  due  from  the  State
Government.  Accordingly, an  Award  was  passed  by  the  Land  Acquisition
Collector  on  22nd  February,  1995  and  the  compensation  determined  at
Rs.35,52,528/-.  For reasons that are not clear, the  compensation  was  not
tendered to the appellant but was deposited in the Treasury.  The  appellant
challenged the quantum of compensation in the Reference Court and when  that
was enhanced, the enhanced  compensation  was  deposited  in  the  Reference
Court.
5.     Feeling aggrieved by the  acquisition  of  its  land,  the  appellant
preferred C.W.P. No. 2996 of 1995 in  the  Punjab  and  Haryana  High  Court
wherein  the  above  two  notifications  were  challenged.   As  an  interim
measure, the High Court directed the maintenance of  status  quo  and  since
the appellant was in actual, physical, vacant  and  peaceful  possession  it
continued to remain so in view of the interim orders.
6.     The writ petition filed by the appellant was eventually dismissed  by
the High Court by the impugned judgment and order dated 24th April, 2012.
7.     The appellant has challenged the decision of the High Court  in  this
Court and during the pendency of this appeal,  Parliament  enacted  the  Act
which came into force with effect from 1st January, 2014.
Proceedings in this Court
8.     As a result of the coming into force of the Act, the appellant  moved
I.A. No. 4 of 2014 in this Court being an application for directions to  the
effect that the acquisition proceedings by which the  appellant’s  land  was
acquired  had  lapsed.   Reference  was  made  in  the  application  to  the
provisions of Section 24(2) of the Act as well as a decision of  this  Court
in Pune Municipal Corporation v. Harakchand Misirimal  Solanki.[1]   It  was
stated in the application that  the  appellant  was  in  possession  of  the
acquired land and that the  respondents  had  only  taken  paper  possession
thereof.  It was also  stated  that  the  compensation  for  the  compulsory
acquisition of the land was  deposited  in  the  Treasury  and  not  in  the
Reference Court and that the appellant has not  withdrawn  the  compensation
so awarded.  The  enhanced  compensation  was,  however,  deposited  in  the
Reference Court.
9.     A reply to I.A. No.4 of 2014 was filed by  respondent  no.  3  on  or
about 12th August, 2014 in the form of a counter affidavit.  It  was  stated
in the reply that the entire acquired  land  was  taken  over  by  the  Land
Acquisition Collector and handed over to  the  then  Estate  Officer,  Urban
Estates, Punjab.  The compensation of Rs.  35,52,528/-  was  deposited  with
the Treasury of the State  Government  and  subsequently  deposited  in  the
Reference Court by the  Land  Acquisition  Collector  on  26th  June,  2014.
However, the enhanced compensation of Rs.  2,91,77,074/-  was  deposited  in
the Reference Court.
10.    With regard to possession of the acquired land  it  was  stated  that
the respondents are in actual, physical possession of  the  land.   On  this
basis, it was contented that this appeal itself deserves dismissal.
11.    The respondents filed an additional  affidavit  in  response  to  the
application on or about 20th February, 2015.  In  the  additional  affidavit
it was reiterated that physical possession of the entire acquired  land  was
taken over from the land  owners  by  the  Land  Acquisition  Collector  and
handed over to the Estate Officer, Urban Estates, Punjab in  1995.   It  was
stated that the physical possession of the  acquiring  department  was  also
reflected in the revenue records.  It was stated that in the  reply  to  the
writ petition filed in the High Court it was pointed  out  as  early  as  on
28th March, 1995 that possession of the acquired land had  been  taken  over
by the respondents.
12.    With regard to the payment of compensation,  it  was  stated  in  the
additional  affidavit  that  the  compensation  due  to  the  appellant  was
deposited in the Government Treasury on 7th  July,  1995  and  the  enhanced
compensation was deposited in the Reference Court first  on  3rd  September,
2004 and thereafter on 24th February, 2012.  It was further stated that  the
original compensation awarded to the appellant,  that  is,  Rs.  35,52,528/-
was subsequently deposited in the Reference Court by  the  Land  Acquisition
Collector on 26th June, 2014 after the Act came into force.
Law on the subject
13.    The law on the subject is now no longer  res  integra.   The  leading
judgment in respect of Section 24(2)  of  the  Act  was  delivered  in  Pune
Municipal  Corporation.      It  was  concluded  in  paragraph  20  of   the
aforesaid decision, that the Award had been made  by  the  Land  Acquisition
Collector more than five years prior to the  commencement  of  the  Act  and
compensation had not been paid  to  the  landowners/persons  interested  nor
deposited in the Court.  It was held that the  deposit  of  compensation  in
the Government Treasury is of no avail.   Consequently, there was no  option
but to hold that the  land  acquisition  proceedings  were  deemed  to  have
lapsed under Section 24(2) of the Act. Paragraph 20 reads as follows:-
“From the above, it is clear that the award pertaining to the  subject  land
has been made by the Special Land Acquisition Officer more than  five  years
prior to the commencement of the 2013 Act.  It  is  also  admitted  position
that   compensation   so   awarded   has   neither   been   paid   to    the
landowners/persons interested nor deposited in the court.   The  deposit  of
compensation amount in the Government treasury is of no avail and cannot  be
held to  be  equivalent  to  compensation  paid  to  the  landowners/persons
interested.  We have, therefore, no hesitation in holding that  the  subject
land acquisition proceedings shall be deemed to have  lapsed  under  Section
24(2) of the 2013 Act.”

14.    Subsequently, this decision was followed in Union of  India  v.  Shiv
Raj.[2]  It was held, after examining the Objects and Reasons  for  the  Act
that since the possession of the  acquired  land  had  not  been  taken  and
compensation had been deposited with the Revenue Department,  it  could  not
be termed as “deemed payment” of the compensation as held in Pune  Municipal
Corporation.  Accordingly,  the appeals filed by the  Union  of  India  were
liable to be dismissed.  In this context, it may  be  noted  that  reference
was also made to two other decisions of this Court namely  Bharat  Kumar  v.
State of Haryana[3] and Bimla Devi v. State of Haryana[4] which were to  the
same effect.
15.    The issue again came  up  for  consideration  in  Sree  Balaji  Nagar
Residential Association v. State of Tamil Nadu[5] and the decision  rendered
in Pune Municipal Corporation and Shiv Raj  were followed.   In  that  case,
it was noted  that  there  is  a  lack  of  clarity  on  the  issue  whether
compensation  has  been  paid  for  majority  of  the  land  holding   under
acquisition, but there was no dispute that  possession  of  the  land  under
consideration had not been taken by the State or any  other  authority.   It
was also noted that more than five years had elapsed  since  the  making  of
the Award.  On this basis, it was held that Section 24(2)  of  the  Act  was
applicable and the land acquisition  proceedings  must  be  deemed  to  have
lapsed.
16.    Finally, in Karnail Kaur v. State of Punjab[6]  the  issue  was  once
again examined, this time  a  little  more  elaborately  but  there  was  no
deviation from any of the decisions rendered by this Court.  The  additional
submission made in this case on behalf of the State of Punjab and  negatived
by this Court, related to The Right to Fair  Compensation  and  Transparency
in Land Acquisition, Rehabilitation and Resettlement (Amendment)  Ordinance,
2014, whereby a second proviso was inserted in Section  24(2)  of  the  Act.
The Ordinance came into force with effect from 1st January, 2015 and it  was
held by this Court that the Ordinance had only prospective  effect  and  was
not  retrospective.   Therefore,  the  period  of  the  grant  of  stay   or
injunction by any Court from taking possession of the  acquired  land  would
not be excluded retrospectively for  computing  the  period  of  five  years
referred to in Section 24(2) of the Act.   This issue does not arise  in  so
far as the present appeal is  concerned  since  no  argument  based  on  the
Ordinance was raised and  in  any  case  the  Ordinance  has  since  lapsed.
However, we are  mentioning  this  only  to  highlight  the  fact  that  the
interpretation of Section 24(2) of the  Act  has  been  considered  by  this
Court from all possible angles.
17.     The  issue  of  retrospectivity  of  the  Ordinance  has  also  been
considered in Radiance Fincap (P) Ltd. v. Union of India,[7]  Arvind  Bansal
v. State of Haryana[8] and Rajiv Choudhrie HUF v. Union of India.[9]
18.    On the issue of retrospectivity, we may only mention the  view  taken
by a Constitution Bench of this Court  in  Commissioner  of  Income  Tax  v.
Vatika Township Pvt. Ltd.[10]  It was held in paragraph 29 or the Report  as
follows:-
“The  obvious  basis  of  the  principle  against  retrospectivity  is   the
principle of “fairness” which must be the basis of every legal rule  as  was
observed  in  L’Office  Cherifien  des  Phosphates  v.   Yamashita-Shinnihon
Steamship Co. Ltd. Thus,  legislations  which  modified  accrued  rights  or
which impose obligations or impose new duties or  attach  a  new  disability
have to be treated as prospective unless the legislative intent  is  clearly
to give the enactment a retrospective effect; unless the legislation is  for
purpose of supplying an obvious omission  in  a  former  legislation  or  to
explain a former legislation.  We need not note the cornucopia of  case  law
available on the subject because aforesaid legal  position  clearly  emerges
from the various decisions and this  legal  position  was  conceded  by  the
counsel for the parties.”

19.    Applying the law laid down by the  Constitution  Bench,  it  must  be
held that the appellant had an accrued right which  must  be  recognized  by
Section 24(2) of the Act.  The Ordinance which purported to take  away  such
an accrued right  would  have  to  be  treated  as  prospective  unless  the
legislative  intent  was  clearly  to  give  it  retrospective  effect.   As
mentioned above, this issue does not arise in the present case but is  being
mentioned only to buttress the  conclusion  arrived  at  by  this  Court  in
Karnail Kaur and subsequent decisions.
20.    In so far as the facts of the present appeal are concerned, there  is
considerable doubt whether the appellant is in possession  of  the  acquired
land or whether the respondents are in possession of the acquired land.   It
is not necessary for us to go into this issue  at  all.   This  is  for  the
reason that one of the requirements mentioned in Section 24(2)  of  the  Act
is that the compensation should have either been paid to the land  owner  or
should have been deposited in the Reference Court.   The  admitted  position
is that the  compensation  of  Rs.  35,52,528/-  was  neither  paid  to  the
appellant nor was it deposited in the Reference Court.   It  was  admittedly
deposited in the Government Treasury of the State.  The deposit  was,  apart
from anything else, made only after the Act came into force and was  perhaps
with a view to get over the provisions of Section 24(2) of the Act  and  the
prayer made  in  I.A.  No.  4.   Unfortunately,  even  the  deposit  of  the
compensation amount in the Reference Court on 26th June, 2014 does not  come
to the aid of the appellant under any circumstances and cannot be  taken  as
“deemed payment”.
21.    Taking into account all the facts  of  the  appeal  as  well  as  the
consistent view taken by  this  Court  on  several  occasions,  we  have  no
hesitation in coming to the conclusion that acquisition  proceedings  in  so
far as the appellant is concerned lapsed with the enactment of the Act.

22.    The judgment and order passed by the High Court is  consequently  set
aside and it is held that  the  acquisition  proceedings  initiated  by  the
notifications dated 12th November, 1992 and 21st July, 1993 followed by  the
Award dated 22nd February, 1995 have lapsed only in so far as the  appellant
is concerned.
23.    The appeal is allowed.

                                 .....…………………….J
                                                      (Madan B. Lokur)



New Delhi;                                 .....…………………….J
October 12, 2015                               (R.K. Agrawal)
-----------------------
[1]  (2014) 3 SCC 183
[2]  (2014) 6 SCC 564
[3]  (2014) 6 SCC 586
[4]  (2014) 6 SCC 583
[5]  (2015) 3 SCC 353
[6]  (2015) 3 SCC 206
[7]  MANU/SC/0064/2015
[8]  MANU/SC/0260/2015
[9]  MANU/SC/0261/2015
[10]    (2015) 1 SCC 1

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