Will non- acceptance of compensation by landowner amount to lapse of acquisition proceedings? Larger bench to decide

Supreme Court: The Bench of Arun Mishra and Amitava Roy, JJ asked CJI to form a larger bench to decide the question as to 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, a land acquisition proceeding can lapse if the landowners refuse to accept compensation. As per Section 24 of the 2013 Act, the land acquisition proceedings will be deemed to be lapsed if the ‘compensation has not been paid’.

The Court was hearing the matter where landowners had refused to accept the compensation deposited by Indore Development Authority (IDA) in lieu of the land acquired for the purpose of development of rings roads. The Madhya Pradesh High Court had held that the proceedings had lapsed in view of the decisions of this Court in Pune Municipal Corporation v. Harakchand Misirimal Solanki, (2014) 3 SCC 183 and Shree Balaji Nagar Residential Association v. State of Tamil Nadu, (2015) 3 SCC 353 on the ground that the compensation was not paid to the landowners and that the award was made 5 years or more prior to the commencement of the 2013 Act.

IDA, hence, appealed before the Supreme Court and said:

“there was no lapse of proceedings in the instant case as compensation was offered but was not accepted by landowners. For their own refusal they cannot lay the blame at the door of the IDA.”

It was argued before the Court that in spite of not accepting the compensation deliberately and statements are made in the court by the landowners 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 filing successive petitions, the provisions of section 24 of 2013 Act cannot be invoked by such landowners.

IDA also submitted before the Court that the object of the deposit under Section 31 of Land Acquisition Act, 1894 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.

Considering the fact that many issues relating to lapse of proceedings under Section 24 of 2013 Act were not considered by the 3-judge bench in in Pune Municipal Corporation case, the bench referred the matter to a larger bench. [Indore Development Authority v. Shailendra, 2017 SCC OnLine SC 1426, decided on 07.12.2017]

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