Section 24 of Land Acquisition Act, 2013: An Interpretation

Synopsis: The following article will draw the attention of the reader towards the recent controversy in the interpretation of the section 24 of the Land Acquisition Act of 2013. The same has noticed a call for the recusal of one of the judges in the constitution bench which was dealing with the case herein.

The recent landmark judgement marked as a foremost step taken by the Judiciary towards the interpretation of the much controversial section 24 of the Land Acquisition Act, 2013. The case, Indore Development Authority v. Manoharlal & Ors was a landmark case where the Constitution bench overruled all precedents pertaining to the interpretation of Section 24 of the Land Acquisition Act, 2013. A five-judge bench led by Justice Arun Mishra decreed in its judgement in this case which had formerly seen two incongruous and contradictory judgements, in 2014 and 2018, where the major question was whether land acquired by the government would lapse and go into a hiatus if it fails to deposit the compensation within five years in the bank account of the landowners.

This consequently draws up to a proper elucidation of the section in question here. Section 24(2) states that in the case of land acquisition proceedings, if a developer or the government fails to take possession of land acquired under the old law for a period of five or more than five years, or if the compensation is not paid by the appropriate government to the original owner of the land, the process of land acquisition will stand lapsed. The procedure will then need to be re-initiated under LAAR, 2013 thereby allowing the owner to get fair compensation.

On one point the definition ofthis provision of the new land acquisition law of 2013 is a legal question. In another, it is a matter of potential judicial prejudice warranting a judge's removal from the proceedings which became a noticeable controversy for the Indian Judicial system. The explanation is that the hon’ble judge concerned that is Justice Arun Mishra, overruled a precedent that had been in good standing for four years and issued a new interpretation, but was then asked to lead a larger bench to give an authoritative judgment and answer the question about which of the two interpretations shall be considered correct.

According to Section 24(2), if the payment of compensation has been made five years before the new Act came into effect, the land acquisition made under the old law of 1894 will lapse, the reimbursement still not being paid. In these circumstances, the modus operandi under the new Act, which requires higher payments, would have to go over afresh and done with. There can be noted several instances in the past where the offer was rejected by farmers and other landowners, leading to delay in taking possession of the government. In the present controversy, the amount of compensation is deposited in the treasury of the Country. Where this is finished, the acquisition process is saved according to one of the interpretations.Then again, some maintain the other interpretation that this state of affairs would come under the new Act as the landowners have not earned compensation, and the lapsing provision of Section 24 should be duly extended.

When, by default interpretation, a long-term land acquisition process is closed under the old law and fresh acquisition proceedings are launched under the new one, the landowners will benefit, but higher compensation will have to be charged to project supporters. Hence, the clause in question has always been a topic of litigation.

In the case in 2014, The deposit of the compensation sum in the treasury of the government was deemed "unprofitable" because it was not equal to the "paying" fee. On the basis of this decision, subsequent cases were settled under the same principle: acquisition that took place earlier than five years before the new law began would expire if compensation payments were not paid to landowners or were deposited in court in cases where the owners declined to accept compensation.

This was the same question in the 2018 case as mentioned above; the constitutional bench had not acknowledged the opinion of the previous Bench. The plurality, consisting of the first two judges, ruled herein that the transaction would not expire merely because the amount of the settlement was not deposited in court but rather deposited in the treasury. It ruled that the earlier Bench neglected to take into account the previous custom of more than a century, in which the balance was deposited in the treasury.

There were some laws and orders not put before that Bench that permitted this operation. Further, a High Court quashed the land acquisition in another particular case in 2008. Since it was not a subsisting procedure, the question under section 24(2) did not arise at all whether the contract had lapsed due to non-payment of compensation or non-deposit in court. Justice Mishra and Justice Goel overruled the earlier judgment on these grounds and held that it was per incuriam, which is a decision passed in violation of the law and therefore incorrect. On the last point, Justice Shantanagoudar had however dissented.

Concluding, this controversy shall mean a major turn of events for the landowners and project proponents in a number of ways. A decision that old acquisitions expire for non-depositing payments would be more favourable to landowners and farmers because they are to obtain higher payments and incentives for rehabilitation and relocation. At the other hand, project supporters believe such an understanding would mean that anyone who wanted to take responsibility would take advantage of their own error only after it had been resolved and the money deposited in the government treasury. What lies ahead is that this controversy has led to a call for Justice Mishra’s recusal from this particular case. If the Bench refuses the plea for this recusal, the petitioners would have no alternative but to argue on merits the whole issue again. The ruling issued by the five-member Bench is expected to resolve the question well along. If a recusal happens, the query would go to a Bench that does not involve him.