1

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

2

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

3

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.

4

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

5

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

6

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

7

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.

8

(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.

9

(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,—

10

(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.”

11

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

12

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

13

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.

14

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.       

15

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

16

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

17

[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.

18

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.

19

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

20

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

21

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

22

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.