Land acquisition invalid if compensation not paid to owner, says Supreme Court

Jan 28, 2014, 10:49 IST | Agencies

The Supreme Court  announced on Tuesday that payments deferred or delayed to landowners will attract higher compensations, and would make such aquisitions void

New Delhi: In a significant judgment, the Supreme Court has held that if compensation for land acquired under the 1894 act has not been paid to the land owner or deposited with a competent court and retained in the treasury, then the acquisition would be deemed to have lapsed and would be covered under the 2013 law entitling the landowners to higher compensation.

The Supreme Court of India. File pic

However, the only rider is that such an award of compensation should be five years or more prior to the enactment of The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which was notified on Jan 1, 2014.

"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," said a bench of Justice R.M.Lodha, Justice Madan B. Lokur and Justice Kurian Joseph in their recent judgment.

"Under section 24(2) (of The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013), land acquisition proceedings initiated under the 1894 (Land Acquisition) Act by legal fiction, are deemed to have lapsed where award has been made five years or more prior to the commencement of 2013 act and possession of the land is not taken or compensation has not been paid," the court said.

The court's ruling came while addressing the question what is the "true meaning" of the expression: "compensation has not been paid" occurring in Section 24(2) of the 2013 act.

The court said that the 1894 Land Acquisition Act being "an expropriatory legislation has to be strictly followed. The procedure, mode and manner for payment of compensation are prescribed in Part V (sections 31-34) of the 1894 Act. The collector, with regard to the payment of compensation, can only act in the manner so provided".

"It is settled proposition of law that where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all. Other methods of performance are necessarily forbidden," the court said while dismissing the plea by Pune Municipal Corporation challenging the Bombay High Court verdict by which it has quashed the acquisition of 43.94 acres for development of a Forest Garden.

The award for the compensation for acquiring these lands was made Jan 31, 2008, and notices were issued to the landowners to receive the compensation but since they did not receive the compensation, the amount (Rs.27 crore) was deposited in the government treasury.

"Can it be said that deposit of the amount of compensation in the government treasury is equivalent to the amount of compensation paid to the landowners/persons interested? We do not think so," the court said answering its own poser.

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