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NON-REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.20982 OF 2017
(Arising out of S.L.P. (C) No.2131 of 2016
INDORE DEVELOPMENT AUTHORITY ..APPELLANT(S)
VERSUS
SHAILENDRA (DEAD)
THROUGH LRS. & ORS. ..RESPONDENT(S)
J U D G M E N T
ARUN MISHRA, J.
1. Leave granted.
2. The question arises whether by virtue of the
provisions contained in section 24 of the Right to Fair
Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act, 2013 (hereinafter
referred to as “the Act of 2013”), the proceedings
lapsed in the instant case.
3. The facts in short are that the Indore Development
Authority (for short, “the IDA”) established under
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section 38 of the Madhya Pradesh Nagar Tatha Gram Nivesh
Adhiniyam, 1973 (for short, “the Adhiniyam of 1973”)
prepared a Master Plan which came into force on
21.3.1995, formulated scheme Nos.124(A) and (B) under
section 50(1) of the Adhiniyam of 1973 and decided to
acquire land for the purpose of constructing Ring Road
and Link Road on the outskirts of Indore city. The ring
road has been fully constructed. The land was acquired
for the purpose of constructing Link Road, for joining
the major road to the Ring Road under Scheme 124(B).
Possession of the land is stated to be with the
encroachers and not with the landowners. The
compensation was deposited by the IDA with the Land
Acquisition Collector. The landowners were informed to
collect it but they had refused and did not receive the
compensation. The IDA published the schemes as per the
provisions of the Adhiniyam of 1973. On 6.2.1991, a
prayer was made to the Collector to acquire the land and
on 2.3.1994 compensation was deposited with the Land
Acquisition Collector. Notification under section 4 was
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issued on 23.12.1994. Section 17(1) was also invoked.
Enquiry under section 5A was dispensed with. Declaration
under section 6 was published on 17.3.1995 under the
Land Acquisition Act, 1894 (hereinafter referred to as
“the Act of 1894”). Respondent No.1 – owner filed
objections before the Land Acquisition Officer claiming
compensation of Rs.32,50,000/-. Award was passed by the
LAO on 14.3.1997 and the sum awarded to respondent No.1
was Rs.7,90,813/-. A belated W.P. No.1182 of 1997 was
filed for quashing the acquisition proceedings. It was
allowed on 28.8.1998 holding that the scheme lapsed on
expiry of three years. Enquiry under section 5A was
illegally dispensed with. Letters Patent Appeal No.480
of 1998 was preferred before the Division Bench and on
29.1.2000 an order of status quo was passed. The LPA was
dismissed as not maintainable. However this Court
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.
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On 4.4.2007 the High Court directed maintenance of
status quo.
4. The respondent filed an application raising the
ground under section 24(2) of the Act of 2013. It was
resisted by the IDA on the ground that the acquisition
had been completed and the amount has been deposited
with the Land Acquisition Collector. Construction is
almost complete. If it is not completed in the remaining
area, it will cause great hardship to the citizens and
widening of road was necessary for smooth flow of
traffic. The High Court by the impugned order dated
3.11.2014 held that the proceedings had lapsed in view
of the decisions of this 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.
5. Shri P.S. Patwalia, learned senior counsel urged
that there was no lapse of proceedings in the instant
case as compensation was offered but was not accepted by
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landowners. For their own refusal they cannot lay the
blame at the door of the IDA. The provisions of section
24 cannot come to the rescue of such incumbents. Even if
the compensation has not been deposited with the
Reference Court under section 31(2) of the Act of 1894
the effect would be of payment of higher interest under
section 34. The expression used in section 24 of the Act
of 2013 is ‘compensation has not been paid’. It is not
that that the expression used is that it has not been
deposited under section 31. It was further submitted
there was no lapse of the proceedings under the Act of
1894 in view of non-deposit under section 31. The only
liability was of higher interest of 9% for the first
year from the date of taking possession and thereafter
to pay the interest at 15%. When the consequence of
lapse of land acquisition proceedings was not provided
in the Act of 1894, in case of failure to deposit under
section 31(2), the provision of section 34 is attracted
regarding payment of interest. Thus it could not be said
that due to failure to deposit or in the case of
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refusal, proceedings would lapse. 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. In other words,
no arrangement has been made by the acquisitioning
authority or the beneficiary for payment of
compensation. 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. In the instant case award has been passed,
compensation has been deposited with the Land
Acquisition Collector for payment to landowners and they
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had declined to accept it. The stale claims are also
being agitated in this Court under the guise of section
24 whereas it does not protect such claims. It was also
submitted that when the High Court has illegally quashed
the notification and interim order was passed, the
benefit of section 24 cannot enure to the landowners in
such cases as the act of court cannot prejudice anybody.
6. It was contended on behalf of the landowners that
the impugned order is proper. It is in tune with Pune
Municipal Corporation (supra) and other decisions like
Shree Balaji (supra) etc. referred to therein, hence no
case for interference was made out.
Sections 31 and 34 of the Act of 1894 are extracted
hereunder :
“31. Payment of compensation or deposit of
same in Court. - (1) On making an award
under section 11, the Collector shall
tender payment of the compensation awarded
by him to the persons interested entitled
thereto according to the award and shall
pay it to them unless prevented by some
one or more of the contingencies mentioned
in the next sub-section.
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(2) If they shall not consent to receive
it, or if there be no person competent to
alienate the land, or if there be any
dispute as to the title to receive the
compensation or as to the apportionment of
it, the Collector shall deposit the amount
of the compensation in the Court to which
a reference under section 18 would be
submitted:
Provided that any person admitted to
be interested may receive such payment
under protest as to the sufficiency of the
amount:
Provided also that no person who has
received the amount otherwise than under
protest shall be entitled to make any
application under section 18:
Provided also that nothing herein
contained shall affect the liability of
any person, who may receive the whole or
any part of any compensation awarded under
this Act, to pay the same to the person
lawfully entitled thereto.
(3) Notwithstanding anything in this
section the Collector may, with the
sanction of [appropriate Government]
instead of awarding a money compensation
in respect of any land, make any
arrangement with a person having a limited
interest in such land, either by the grant
of other lands in exchange, the remission
of land-revenue on other lands held under
the same title, or in such other way as
may be equitable having regard to the
interests of the parties concerned.
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(4) Nothing in the last foregoing
sub-section shall be construed to
interfere with or limit the power of the
Collector to enter into any arrangement
with any person interested in the land and
competent to contract in respect thereof.
34. Payment of interest.-- When the amount
of such compensation is not paid or
deposited on or before taking possession
of the land, the Collector shall pay the
amount awarded with interest thereon at
the rate of [nine per centum] per annum
from the time of so taking possession
until it shall have been so paid or
deposited:
[Provided that if such compensation or any
part thereof is not paid or deposited
within a period of one year from the date
on which possession is taken, interest at
the rate of fifteen per centum per annum
shall be payable from the date or expiry
of the said period of one year on the
amount of compensation or part thereof
which has not been paid or deposited
before the date of such expiry.]”
7. Section 24 of the Act of 2013 is extracted
hereunder :
“24. Land acquisition process under Act
No. 1 of 1894 shall be deemed to have
lapsed in certain cases.–(1)
Notwithstanding anything contained in this
Act, in any case of land acquisition
proceedings initiated under the Land
Acquisition Act, 1894,—
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(a) where no award under section 11 of
the said Land Acquisition Act has been
made, then, all provisions of this Act
relating to the determination of
compensation shall apply; or
(b) where an award under said section
11 has been made, then such
proceedings shall continue under the
provisions of the said Land
Acquisition Act, as if the said Act
has not been repealed.
(2) Notwithstanding anything contained in
sub-section (1), in case of land
acquisition proceedings initiated under
the Land Acquisition Act, 1894 (1 of
1894), where an award under the said
section 11 has been made five years or
more prior to the commencement of this Act
but the physical possession of the land
has not been taken or the compensation has
not been paid the said proceedings shall
be deemed to have lapsed and the
appropriate Government, if it so chooses,
shall initiate the proceedings of such
land acquisition afresh in accordance with
the provisions of this Act:
Provided that 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, then, all beneficiaries
specified in the notification for
acquisition under section 4 of the said
Land Acquisition Act, shall be entitled to
compensation in accordance with the
provisions of this Act.”
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Provisions of section 12 of the Act of 1894 are
extracted hereunder :
“12. Award of Collector when to be final.
- (1) Such award shall be filed in the
Collector's office and shall, except as
hereinafter provided, be final and
conclusive evidence, as between the
Collector and the persons interested,
whether they have respectively appeared
before the Collector or not, of the true
area and value of the land, and the
appointment of the compensation among the
persons interested.
(2) The Collector shall give immediate
notice of his award to such of the persons
interested as are not present personally
or by their representatives when the award
is made.”
8. Shri Patwalia, learned senior counsel, 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
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beneficiaries”. Compensation in respect of a majority of
land holdings is not deposited in the account of
beneficiaries, is not applicable as it was not the case
set up and that the claim was not made under the proviso
to sub-section (2) of section 24. There is vast
difference between the provision of section 24(2) and
its proviso. The expressions payment and deposit are
used with different objectives. They have to be given
the proper meanings which aspect has not been considered
in any of the decisions relied upon by the High Court
including Pune Municipal Corporation (supra).
9. It was also submitted by learned senior counsel on
behalf of the IDA 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. The proviso has been added in
the year 1984 providing 15% interest payable from the
date of expiry of the said period of one year and for
the first year the rate of interest would be 9% per
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annum. The proceedings of acquisition would not lapse.
It is in order to save the liability to make payment of
higher interest that the provision of section 31 has
been enacted, and the rate of interest, as prescribed
under section 34, is higher than in any Government
security/FD with the bank. Thus the 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.
10. 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.
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Proviso to section 24(2) makes it clear that the amount
of compensation required to be deposited in the account
of beneficiaries (in case of failure to make the
deposit) with respect to majority of the land holdings,
all the beneficiaries would become entitled for higher
compensation under the new Act. In case amount has been
tendered/deposited with the Land Acquisition Collector
and has been deposited in the separate account of the
beneficiaries in the concerned Treasury as per the
provisions of the Finance Code/Rules of the concerned
State, that has to be treated as sufficient compliance
of the proviso to section 24(2) of the Act of 2013.
11. 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. Thus proceedings would not
lapse.
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12. 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. The Act
of 1894 never intended that the consequence of
non-compliance of said provision of the Act, proceedings
would become invalid. Reliance has been placed on Hissar
Improvement Trust vs. Rukmani Devi and Anr. (1990)
(Supp) SCC 806 in which this Court has laid down thus :
“5. It cannot be gainsaid that interest is
due and payable to the landowner in the
event of the compensation not being paid
or deposited in time in Court. Before
taking possession of the land, the
Collector has to pay or deposit the amount
awarded, as stated in Section 31, failing
which he is liable to pay interest as
provided in Section 34.
7. We make it clear that insofar as the
landowner is concerned, his right to be
compensated is enforceable against the
State. It is the liability of the
Collector in terms of the relevant
provisions to pay the amount awarded,
together with interest in the event of the
amount not being paid in time. The
liability of the appellant-Trust arising
under its agreement with the Government
for payment in respect of the property
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acquired is a matter on which we express
no view.”
13. Reliance has also been placed on Shri Kishan Das &
Ors. v. State of U.P. & Ors. AIR 1996 SC 274, wherein
this Court has observed 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. This Court took note of the delay caused by
the petitions filed by the claimants in the High Court
and this Court, and held that even payment of interest
under section 34 cannot be ordered. This Court has
observed in Shri Kishan Das (supra) thus :
“3. Shri S.B. Sanyal, learned senior
counsel for the appellants, contended that
the award was made on March 22, 1983
though the acquisition was made in
September 1976. Therefore, the appellants
should be compensated by payment of
interest @ 12 per cent per annum. In
support of his contention, he placed
reliance on the decision of this Court in
Ram Chand and Ors. v. Union of India and
Ors. (1994) 1 SCC 44 and in particular on
paragraph 16 of the judgment. It is seen
that in Ram Chander's case even after the
dismissal of the writ petitions by this
Court in Aflatoon v. Lt. Governor of Delhi
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[1975] 1 SCR 802, no action was taken by
the Land Acquisition Officer to pass the
award. Thus, till 1980-81 no award was
made in respect of any of the
acquisitions. Under these circumstances,
this Court had directed the Government to
pay interest @ 12 per cent on the amount
awarded to compensate the loss caused to
the appellants therein. In this case it is
seen that though the notification was
issued in September 1976, the writ
petitions came to be filed in the High
Court immediately thereafter in 1977 in
the High Court and obviously further
proceedings were stayed. Accordingly, the
Land Acquisition Officer delayed the
award. After the dismissal of the writ
petitions, the appellants came to this
Court and obtained status quo. Obviously,
the Land Acquisition Officer was not in a
position to pass the award immediately.
Thereafter it would appear that he passed
the award on March 22,1983. Section 34 of
the Act obligates the State to pay
interest from the date of taking
possession under the unamended Act @ 6 per
cent and after the Amendment Act 68 of
1984 at different rates mentioned therein.
The liability of the State to pay interest
ceases with the deposit made as per
Section 34 of the Act. Further liability
would arise only when the court on
reference under Section 18 enhances the
compensation under Section 28 of the Act.
Similarly, in an appeal under Section 54
of the Act if the appellate court further
increases the compensation, then again
similar obligation under Section 28
arises.
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4. In the light of the operation of the
respective provisions of Sections 34 and 28 of
the Act, it would be difficult to direct
payment of interest. In fact, Section 23(1-A)
is s set off for loss in cases of delayed
awards to compensate the person entitled to
receive compensation; otherwise a person who is
responsible for the delay in disposal of the
acquisition proceedings will be paid premium
for dilatory tactics. It is stated by the
learned Counsel for the respondents that the
amount of interest was also calculated and
total amount was deposited in the account of
the appellants by the Land Acquisition Officer
after passing the award, i.e., on November 15,
1976 in a sum of Rs.20,48,615. Under these
circumstances, the liability to pay interest
would arise when possession of the acquired
land was taken and the amount was not
deposited. In view of the fact that
compensation was deposited as soon as the award
was passed, we do not think that it is a case
for us to interfere at this stage.”
14. It was also urged that ordinarily when a reference
is submitted, the Collector should deposit the amount
of compensation into court, but the deposit of the
amount is not a condition precedent to the
entertainability of the reference as held in Jogesh
Chandra v. Yakub Ali, 29 IC 111.
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15. It was also urged that the payment is tendered by
issue of a notice on the party fixing the date on which
and the place where the payment would be made. The
notice is given along with the notice of award under
section 12(2) in which the date on which possession
would be taken is also mentioned.
16. It was also urged that there are Financial
Department’s orders in various States prevailing as
well as in certain States Civil Court Rules also
prevail which require the deposit of the Government
money in the Treasury after particular time necessarily
money goes to the treasury. Thus, a deposit in the
treasury in the landowner’s account cannot be said to
be illegal or impermissible as that is as per the
standing orders and it is a matter of procedure only
where the deposit is made. In case the deposit is made
in the treasury, liability would still remain to make
the payment of interest under section 34 of the Act of
1894. There are five methods of making payment: (i) by
direct payments; (ii) by order on treasury; (iii) by
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money order; (iv) by cheque; and (v) by deposit in a
treasury. They are governed by the rules contained in
the Civil Account Code and in the local instructions
issued by various Provincial Governments, which are
required to be scrupulously followed. For Punjab,
Financial Commissioner’s standing order No.28 paras 74
and 75 lay down such procedure. It was also urged that
in Damadilal v. Parashram, AIR 1976 SC 2229, it was
observed that payment by cheque is a valid tender.
17. It was also urged that when a reference is made to
a District Court and in case amount of compensation is
increased, the amount also is required to be deposited
as ordered by the court but it would not invalidate
acquisition proceedings. Reliance has been placed on
Viraraghava v. Krishnasami, ILR 6 Mad. 347 in which it
was observed that the money paid into the treasury is
to be considered as money or movable property impressed
with the trusts and obligations of the immovable
property which it represents. The rights of parties to
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the land, and to any mortgage on, or interest in it,
are transferred to the compensation money.
18. It was also urged that the object of such deposit
is to prevent unnecessary prolongation of the
proceedings and accumulation of Collector’s liability
for interest. When a party willfully refuses to receive
payment by depositing the money in the court, the
liability for interest will cease. It was also urged
that section 32 does not intend to give the advantage
of one’s own act or the act of the court.
19. It was also urged that this Court is also bound to
prevent the abuse of process of law. The cases which
have been concluded are being revived. In spite of not
accepting the compensation deliberately and statements
are made in the court that they do not want to receive
the compensation at any cost and they are agitating the
matter time and again after having lost the matters and
when proceedings are kept pending by interim orders by
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filing successive petitions, the provisions of section
24 cannot be invoked by such landowners.
20. There is already a reference made as to the
applicability of section 24 in SLP [C] No.10742/2008 --
Yogesh Neema & Ors. v. State of M.P. & Ors. vide order
dated 12.1.2016. There are several other issues arising
which have been mentioned above but have not been
considered in Pune Municipal Corpn. (supra). Thus, here
is a case where the matter should be considered by a
larger Bench. Let the matter be placed before Hon’ble
the Chief Justice of India for appropriate orders.
………………………………………………J.
(ARUN MISHRA)
………………………………………………J.
(AMITAVA ROY)
NEW DELHI;
DECEMBER 7, 2017.
