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REPORTABLE

IN THE SUPREME COURT OF INDIA  CIVIL APPELLATE JURISDICTION

CIVIL  APPEAL NO.             877                              OF 2014   (Arising out of SLP(C) No. 30283 of 2008)

Pune Municipal Corporation & Anr. … Appellants

   Versus

Harakchand Misirimal Solanki & Ors.      … Respondents

WITH

CIVIL  APPEAL NO.             878                 OF 2014   (Arising out of SLP(C) No. 30455 of 2008)

WITH

CIVIL  APPEAL NO.             879                 OF 2014   (Arising out of SLP(C) No. 30470 of 2008)

WITH

CIVIL  APPEAL NO.             880                 OF 2014   (Arising out of SLP(C) No. 30467 of 2008)

WITH

CIVIL  APPEAL NO.             881                 OF 2014   (Arising out of SLP(C) No. 30465 of 2008)

WITH

CIVIL  APPEAL NO.             882                 OF 2014   (Arising out of SLP(C) No. 30469 of 2008)

WITH

CIVIL  APPEAL NO.             883                 OF 2014   

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(Arising out of SLP(C) No. 30543 of 2008)

WITH

CIVIL  APPEAL NO.             884                 OF 2014   (Arising out of SLP(C) No. 30546 of 2008)

WITH

CIVIL  APPEAL NO.             885                 OF 2014   (Arising out of SLP(C) No. 30548 of 2008)

AND

CIVIL  APPEAL NOS.          886-894                   OF 2014   (Arising out of SLP(C) Nos. 15847-15855 of 2010)

JUDGMENT

R.M. LODHA, J.  

Delay  condoned  in  S.L.P.  (C)  Nos.15847-15855  of  2010.  

Leave granted.

2. In these 18 appeals, by special leave, it is argued on behalf of  

the respondents-landowners that in view of Section 24(2) of The Right to  

Fair  Compensation and Transparency in Land Acquisition, Rehabilitation  

and Resettlement Act,  2013 (for short,  ‘2013 Act’) which has come into  

effect  on  01.01.2014,  the  subject  land  acquisition  proceedings  initiated  

under the Land Acquisition Act, 1894 (for short, ‘1894 Act’) have lapsed.  

The  question  for  decision  relates  to  true  meaning  of  the  expression:  

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“compensation has not been paid” occurring in Section 24(2) of the 2013  

Act.   

3. It  may  not  be  necessary  at  all  to  go  into  the  legality  and  

correctness  of  the  impugned  judgment,  if  the  subject  land  acquisition  

proceedings are held to have lapsed.  We, therefore, deal with this aspect  

first.   

4. The  brief  facts  necessary  for  consideration  of  the  above  

question  are  these.  On  06.08.2002,  the  proposal  of  the  Municipal  

Commissioner, Pune Municipal Corporation (for short, “Corporation”) duly  

approved by the Standing Committee for acquisition of lands admeasuring  

43.94 acres for development of “Forest Garden” was sent to the Collector,  

Pune.  The Collector sanctioned the proposal and on 20.02.2003 forwarded  

the same to Special Land Acquisition Officer (15), Pune for further action.  

On  30.09.2004,  the  notification  under  Section  4  of  the  1894  Act  was  

published in the official  gazette.   Then notices under Section 4(1) were  

served  upon  the  landowners/interested  persons.  On  26.12.2005,  the  

declaration under Section 6 was published in the official  gazette and on  

02.02.2006, it was also published at the site and on the notice board of the  

Office of Talaltti.  Following the notices under Section 9, on 31.01.2008 the  

Special Land Acquisition Officer made the award under Section 11 of the  

1894 Act.  

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5. The landowners challenged the above acquisition proceedings  

before the Bombay High Court in 9 writ petitions.  Of them, 2 were filed  

before  making  award  and  7  after  the  award.   The  challenge  to  the  

acquisition proceedings and the validity of the award was laid  on diverse  

grounds including  (i)  absence of  resolution of  the General  Body  of  the  

Corporation; (ii) non-compliance with the provisions of Section 5A, (iii) non-

compliance with the provisions of Section 7, and (iv) lapsing of acquisition  

proceedings under Section 11A. The High Court on consideration of the  

arguments advanced before it by the parties has held that the acquisition  

proceedings for the development of “Forest Garden” could not be initiated  

by the Commissioner with the mere approval of the Standing Committee  

without resolution of the General Body of the Corporation.  The acquisition  

proceedings were also held bad in law for non-compliance of Section 7 and  

other  statutory  breaches.  Inter  alia,  the  High  Court  has  quashed  the  

acquisition proceedings and gave certain directions including restoration of  

possession.  

6. It  is  argued  on  behalf  of  the  landowners  that  by  virtue  of  

Section 24(2) of the 2013 Act, the subject acquisition shall be deemed to  

have been lapsed because the award under Section 11 of the 1894 Act is  

made more than five years prior to the commencement of 2013 Act and no  

compensation  has  been  paid  to  the  owners  nor  the  amount  of  

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compensation  has  been  deposited  in  the  court  by  the  Special  Land  

Acquisition Officer.   

7. On the other hand, on behalf of the Corporation and so also for  

the Collector, it  is argued that the award was made by the Special Land  

Acquisition Officer on 31.01.2008 strictly in terms of 1894 Act and on the  

very  day  the  landowners  were  informed  regarding  the  quantum  of  

compensation for their respective lands. Notices were also issued to the  

landowners to reach the office of the Special Land Acquisition Officer and  

receive the amount of compensation and since they neither received the  

compensation nor any request came from them to make reference to the  

District  Court  under  Section  18,  the  compensation  amounting  to  

Rs.27  crores  was  deposited  in  the  government  treasury.  It  is,  thus,  

submitted  that  there  was  no  default  on  the  part  of  the  Special  Land  

Acquisition  Officer  or  the  government  and,  hence,  the  acquisition  

proceedings have not lapsed.  Moreover, reliance is also placed on Section  

114 of the 2013 Act and it is argued that the concluded land acquisition  

proceedings are not at all affected by Section 24(2) and the only right that  

survives to the landowners is to receive compensation.

8. 2013 Act  puts in  place  entirely  new regime for  compulsory  

acquisition  of  land  and  provides  for  new  scheme  for  compensation,  

rehabilitation  and  resettlement  to  the  affected  families  whose  land  has  

been acquired or proposed to be acquired or affected by such acquisition.  

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9. To turn, now, to the meaning of the expression “compensation  

has not been paid” in Section 24(2) of the 2013 Act and its effect on the  

subject acquisition, it  is necessary to refer to Section 24 which reads as  

follows:  

“24. (1) Notwithstanding anything contained in this Act, in any case  of land acquisition proceedings initiated under the Land Acquisition   Act, 1894, -

(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, 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 holding 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.”

10. Insofar as sub-section (1) of Section 24 is concerned, it begins  

with non obstante clause.  By this, Parliament has given overriding effect to  

this provision over all other provisions of 2013 Act.  It is provided in clause  

(a) that where the land acquisition proceedings have been initiated under  

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the 1894 Act but no award under Section 11 is made, then the provisions of  

2013 Act shall apply relating to the determination of compensation. Clause  

(b)  of  Section  24(1)  makes  provision  that  where  land  acquisition  

proceedings have been initiated under the 1894 Act and award has been  

made under Section 11,  then such proceedings shall continue under the  

provisions of the 1894 Act as if that Act has not been repealed.  

11. Section  24(2)  also  begins  with  non  obstante clause.  This  

provision has overriding effect  over Section 24(1).  Section 24(2)  enacts  

that in relation to the land acquisition proceedings initiated under 1894 Act,  

where  an  award  has  been  made  five  years  or  more  prior  to  the  

commencement  of  the 2013 Act  and either  of  the two contingencies  is  

satisfied, viz; (i) physical possession of the land has not been taken or (ii)  

the compensation has not been paid, such acquisition proceedings shall be  

deemed to have lapsed. On the lapse of such acquisition proceedings,  if  

the appropriate government still chooses to acquire the land which was the  

subject matter of acquisition under the 1894 Act then it has to initiate the  

proceedings afresh under the  2013 Act. The proviso appended to Section  

24(2)  deals  with a situation where in respect  of  the acquisition initiated  

under the 1894 Act 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  the beneficiaries  specified in Section 4 notification  

become entitled to compensation under 2013 Act.  

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12. To find out the meaning of the expression, “compensation has  

not been paid”, it is necessary to have a look at Section 31 of the 1894 Act.  

The said Section, to the extent it is relevant, reads as follows:

“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.  

(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:

xxxx           xxxx              xxxx               xxxx”  

13. There is amendment in Maharashtra—Nagpur (City) in Section  

31 whereby in sub-section (1), after the words “compensation” and in sub-

section (2), after the words, “the amount of compensation”, the words “and  

costs if any” have been inserted.  

14. Section 31(1) of the 1894 Act enjoins upon the Collector,  on  

making an award under Section 11,  to tender payment of compensation to  

persons interested entitled thereto according to award.  It further mandates  

the Collector to make payment of compensation to them unless prevented  

by  one  of  the  contingencies  contemplated  in  sub-section  (2).  The  

contingencies contemplated in Section 31(2) are: (i) the persons interested  

entitled to compensation do not consent to receive it (ii) there is no person  

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competent to alienate the land and (iii)  there is dispute as to the title to  

receive compensation or as to the apportionment of it.  If due to any of the  

contingencies  contemplated  in Section 31(2),  the Collector  is  prevented  

from making payment of compensation to the persons interested who are  

entitled  to  compensation,  then the  Collector  is  required  to  deposit  the  

compensation in the court to which  reference under Section 18 may be  

made.  

15. Simply put, Section 31 of the 1894 Act makes provision for  

payment  of  compensation  or  deposit  of  the  same  in  the  court.   This  

provision  requires  that  the  Collector  should  tender  payment  of  

compensation  as  awarded  by  him  to  the  persons  interested  who  are  

entitled  to  compensation.   If  due  to  happening  of  any  contingency  as  

contemplated in Section 31(2), the compensation has not been paid, the  

Collector should deposit the amount of compensation in the court to which  

reference can be made under Section 18.    

16. The mandatory nature of the provision in Section 31(2) with  

regard to deposit of the compensation in the court is further fortified by the  

provisions contained in Sections 32, 33 and 34. As a matter of fact, Section  

33 gives power to the court, on an application by a person interested or  

claiming an interest in such money, to pass an order to invest the amount  

so deposited in such government or other approved securities and may  

direct  the  interest  or  other  proceeds  of  any  such  investment  to  be  

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accumulated and paid in such manner as it  may consider proper so that  

the parties interested therein may have the benefit therefrom as they might  

have had from the land in respect whereof such money shall  have been  

deposited or as near thereto as may be.  

17. While enacting Section 24(2), Parliament definitely had in its  

view Section 31 of the 1894 Act. From that one thing is clear that it did not  

intend to equate the word “paid”  to “offered” or “tendered”.    But at  the  

same time,  we do not  think that  by  use of  the word “paid”,  Parliament  

intended receipt of compensation by the landowners/persons interested. In  

our view, it is not appropriate to give a literal construction to the expression  

“paid” used in this sub-section (sub-section (2) of Section 24).  If a literal  

construction were to be given, then it would amount to ignoring procedure,  

mode and manner of deposit provided in Section 31(2) of the 1894 Act in  

the event of happening of any of the contingencies contemplated therein  

which  may  prevent  the   Collector  from  making  actual  payment  of  

compensation.   We  are of  the view,  therefore,  that  for  the purposes of  

Section  24(2),  the  compensation  shall  be  regarded  as  “paid”  if  the  

compensation  has  been  offered  to  the  person  interested  and  such  

compensation  has  been  deposited  in  the  court  where  reference  under  

Section  18  can  be  made  on  happening  of  any  of  the  contingencies  

contemplated under Section 31(2) of the 1894 Act.  In other words, the  

compensation  may  be  said  to  have been “paid”  within  the  meaning  of  

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Section  24(2)  when  the  Collector  (or  for  that  matter  Land  Acquisition  

Officer)  has  discharged  his  obligation  and  deposited  the  amount  of  

compensation in court and made that amount available to the interested  

person to be dealt with as provided in Sections 32 and 33.            

18. 1894 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 (classic statement of Lord Roche  

in  Nazir Ahmad1) 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.   

19. Now,  this  is  admitted  position  that  award  was  made  on  

31.01.2008.  Notices  were  issued  to  the  landowners  to  receive  the  

compensation and since they did not receive the compensation, the amount  

(Rs.27 crores) 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.  In a comparatively recent decision, this  

Court in Agnelo Santimano Fernandes2, relying upon the earlier decision in  

Prem  Nath  Kapur3, has held  that  the  deposit  of  the  amount  of  the  

1  Nazir Ahmad v. King Emperor; [A.I.R. 1936 Privy Council 253(2)]  2  Ivo Agnelo Santimano Fernandes and Others v. State of Goa and Another; [(2011) 11 SCC 506] 3  Prem Nath Kapur v. National Fertilizers Corpn. of India Ltd.; [(1996) 2 SCC 71]  

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compensation in the state’s revenue account is of no avail and the liability  

of the state to pay interest subsists till the amount has not been deposited  

in court.  

20. 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.  

21. The argument on behalf  of  the Corporation that  the subject  

land acquisition proceedings have been concluded in all respects under the  

1894 Act and that they are not affected at all in view of Section 114(2) of  

the 2013 Act, has no merit  at all,  and is noted to be rejected.  Section  

114(1) of the 2013 Act repeals 1894 Act.  Sub-section (2) of Section 114,  

however, makes Section 6 of the General  Clauses Act, 1897 applicable  

with regard to the effect of repeal but this is subject to the provisions in the  

2013 Act. Under Section 24(2) land acquisition proceedings initiated under  

the 1894 Act, by legal fiction, are deemed to have lapsed  where award has  

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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 legal  fiction  under  Section 24(2)  comes into  operation as  soon as  

conditions stated therein are satisfied.  The applicability of Section 6 of the  

General Clauses Act being subject to Section 24(2), there is no merit in the  

contention of the Corporation.       

22. In  view  of  the  foregoing  discussion,  it  is  not  necessary  to  

consider the correctness of the impugned judgment on merits.  

23.  The appeals fail and are dismissed with no order as to costs.

…..………………………….J. (R.M. Lodha)

…..………………………….J. (Madan B. Lokur)

…..………………………….J. (Kurian Joseph)

New Delhi, January 24, 2014.

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