I.

Introduction
The Right to Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act, 2013 (“2013 Act”) was passed with a view to
address various inadequacies in the existing Land Acquisition Act, 1894 (“1894
Act”). The 2013 Act contains provisions for enhanced compensation as well as
rehabilitation and resettlement. The 2013 Act not only aims to safeguard the interests
of landowners, but, also other displaced and affected persons including tenants and
those whose main source of livelihood is dependent on the acquired land.
The 2013 Act came into force on 01-01-2014. Section 24 of the 2013 Act deals with
the lapsing of proceedings that had been initiated under the 1894 Act and were
pending as on 01-01-2014 in certain cases. Section 24 divides pending acquisitions as
on 01-01-2014, into three broad categories:
a. Where the award has not been passed.
b. Where the award has been passed within 5 years prior to 01-01-2014.
c. Where the award has been passed more than 5 years prior to 01-01-2014.
The proceedings in the first and second categories of cases do not lapse. For cases in
the first category, the acquisitions survive and compensations are to be determined as
per the 2013 Act and, for cases in the second category, the compensations continue to
be determined as per the 1894 Act. As far as cases in the third category are concerned,
where, the award has been passed more than 5 years prior to 01-01-2014, the
proceedings may lapse on the fulfillment of conditions, namely:
1. Physical possession of the land has not been taken; or
2. Compensation has not been paid.

As far as cases falling under the third category are concerned, certain interpretational
issues arose immediately after the enactment of the 2013 Act. One of the issues was
whether the satisfaction of both the aforesaid conditions was required for the
proceedings to lapse or whether even the satisfaction of any one of the aforesaid
conditions was sufficient for the proceedings to lapse. Another issue was, if the
landowners had refused to accept the compensation, whether the deposit of the
compensation in the treasury would amount to the compensation having been paid and
would save the acquisition.1

II. Analysis of Section 24 vis-à-vis 1894 Act

Since the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation
and Resettlement Act (LAAR) came into force in 2013, Section 24(2) of the Act has been
mired in controversy.
Section 24 envisages more than one scenario wherein proceedings initiated under the 1894
Act would be deemed to have lapsed. First off, it says that where no award under Section 11
of the 1894 Act was made, the provisions of the 2013 Act would apply vis-à-vis
compensation. It then deals with a situation where an award under Section 11 of the 1894 Act
was made but the award was made five years or more prior to the commencement of the 2013
Act. In these
1
https://www.lexology.com/library/detail.aspx?g=8b35b89b-c90a-44b3-9e10-dd7e244f36bc
situations, if (i) physical possession of the land had still not been taken, or (ii) compensation
had not been paid, land acquisition proceedings under the 1894 Act would lapse.
The difficulty that arose in the interpretation of Section 24 was with respect to the word
'paid'. Two different possibilities emerged as candidates for its meaning: (i) 'paid' could mean
that the amount was actually paid to the people whose land was acquired ("beneficiaries"); or
(ii) 'paid' could mean that the amount was tendered/offered by the State to the beneficiaries
who refused to receive it and subsequently, it was deposited into a court or government
treasury.
Nothing in the text of the statute suggests that the Legislature intended the meaning to be
along the lines of point (ii) above. In fact, a literal interpretation of the Section makes it
obvious that 'paid' means what we understand it to mean in a colloquial sense, namely, that it
was actually paid to a beneficiary. This observation is also buttressed by the proviso to
Section 24. The proviso says that when there are multiple beneficiaries, all of them shall be
entitled to compensation as per the 2013 Act if compensation in respect of a majority of the
land holders had not been deposited into their accounts. The fact that the Legislature
unambiguously used two different words, 'paid' and 'deposited', in the same section for
different purposes clearly means that the words are supposed to carry different meanings, a
conclusion that will be further elaborated upon below.
This position is also confirmed by reference to Section 31 of the 1894 Act. Section 31
provided for 'payment of compensation or deposit of same in court'. It stipulated that on
making an award under Section 11 of the 1894 Act, the collector had to tender payment to the
beneficiaries and pay it to them. This mandatory obligation could only be departed from if the
collector was prevented from executing the payment due to the beneficiaries' refusal to
receive the compensation, dispute as to land title or as to the apportionment of compensation.
In all these cases, the collector was obliged to deposit the compensation in court. Thus, the
1894 Act drew a very clear distinction between payment and deposit. Given that Section 24
of the 2013 Act refers to the 1894 Act, it can be said that the legislatures had notice of the
distinction under the 1894 Act and when they used the two terms in different contexts in
Section 24, they sought to carry forward the respective meanings accorded to the two terms in
Section 31 of the 1894 Act.
Although there is little need to resort to other tools of interpretation when the literal meaning
is clear, it is pertinent to observe that the 2013 Act is a welfare legislation. It had been
introduced to remedy the turmoil that the land holders had been through under the old law.
Therefore, a colloquial interpretation would also be in tune with these objectives of the 2013
Act.2
3. Case analysis
a. Pune Municipal Corporation v. Harakchand Misrilal Solanki ("Pune case")
1. Pune Municipal Corporation v. Harakchand Mishrimal Solanki & Anr.
Facts: On 6/8/2002, the proposal of the Municipal Commissioner, Pune Municipal
Corporation duly approved by the Standing Committee for the acquisition of lands

2
https://www.livelaw.in/columns/section-24-of-2013-land-acquisition-act-a-series-of-misplaced-interpretations-
154185
admeasuring 43.94 acres for development of “Forest Garden” was sent to the Collector,
Pune.
The Collector sanctioned the proposal and on 20/2/2003 forwarded the same to Special
Land Acquisition Officer, Pune for further Action. On 30/9/2004, the notification under
section 4 of the 1894 Act was published in the gazette. Serving of notices to land owners
and interested persons was done. On 26/12/2005, declaration under section 6 of 1894 Act
was published.
On 2/2/2006 it was also published at the site and on the notice board of the Office of
Talaltti. On 31/1/2008, the Special Land Acquisition Officer made the award under
Section 11 of the 1894 Act. Thus we see, initial notification in 2004, and final award in
2008. The acquisition proceedings challenged by the landowners before the Bombay HC
in 9 write petitions, of which 2 were filed before making award and 7 after the award.

Grounds of Challenge before HC: (a) Absence of resolution of the General Body of the
Corporation. (Standing Committee constituted under Municipal Corp Act, is the final
executive authority under the Act. The objection was that decision should have been
taken by entire General Body, and not just the Standing Committee)
(b) Non Compliance with the provisions of Section 5A.
(c) Non-Compliance with provisions of Section 7
(d) Lapsing of the acquisition proceedings under Section 11A. Section 11A says that if
award not passed in 2 years, then acquisition can be challenged before court of law.

HC held: (a) Acquisition proceedings for 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
(b) The acquisition proceedings were also held bad in law for non-compliance of Section
7 and other statutory breaches
(c) High Court quashed the acquisition proceedings and gave certain directions
including restoration of possession.

Contentions of Municipal Corp: (a) Award made by Special Land Acquisition Officer
on 31/1/2008, strictly in terms of 1894 Act.
(b) The landowners were informed regarding the quantum of compensation for their
respective lands immediately. Notices were also issued to the landowners to reach the
office of the Special Land Acquisition Officer and receive the amount of compensation.
Neither they came to receive the compensation, nor was there any request from them to
make reference to District Court, and thus compensation of Rs. 27 Crore was deposited
in the government treasury.
(c) No default on part of the Special Land Acquisition Officer or the government, and
hence the acquisition proceedings have not lapsed, and reliance was placed on Section
114 of the New Act of 2013.
Section 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.

Compensation not paid in cash. All interested parties are given notice to come
collect compensation at designated time and place. “Payment of Compensation”
does not entail that the Government will go and deliver the amount or deposit in
the bank, as there are normally large number of interested persons. And if no
one collects, then amount is deposited in the Court. This depositing of
compensation to the Court is deemed to be payment of compensation to the
interested persons by the authority.

Holding of SC: (a) As per provisions of Section 24(2) (New Act), the proceedings
under the old act have lapsed due to non-payment of compensation. The new Act
is silent about lapsing of acquisition, and hence the Court took a sympathetic
view favouring benefit of landowners, stating that in this case, proceedings have
lapsed as per the old Act, despite them having deposited the money in the
treasury. They stated that the amount has to be deposited with the Court and not
the treasury, as per the Old Act. (Section 31 mentioned above)
(b) The observation by the HC is correct and should not be interfered with.
(till here is GV notes)
In PuneMunicipal Corporation v. Harakchand Misirimal Solanki & Ors., decided on
24.01.2014, a Full Bench speaking through Lodha J. analyzed Section 24 of 2013 Act and
Section 31 of 1894 Act. The Court appreciated the distinction between payment and deposit
in Section 31 as explained by us above and held that, while enacting Section 24 of the 2013
Act, Parliament definitely had view of Section 31 which would mean that it did not intend to
equate the words 'paid' to 'offered' or 'tendered'. It refers to this distinction multiple times in
the judgment.

However, curiously, it did not accord a literal interpretation to Section 24 and concluded that
compensation shall be regarded as 'paid' for the purposes of Section 24 if it has been offered
to that person and has been deposited in court. It said that it was coming to this conclusion as
not doing so would amount to ignoring the procedure, mode and manner of deposit under
Section 31. However, it failed to elaborate its reasoning further which is where, in our
respectful view, the Court faltered. Thus, according to Pune Municipal Corporation, it will
not be considered as 'paid' if the compensation was paid into the government treasury instead
of the court, which is indeed what had happened in the facts of that case.
b. Indore Development Authority v. Manoharlal & Ors.
Facts: Indore Development Authority, which was established under Section 38 of the
MPNTGN Adhiniyam, 1973, prepared a Master Plan which came into force on
21/3/1995, and formulated scheme Nos. 124 (A) and (B) under Section 50(1) of the
Adhiniyam of 1973. They 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 now.
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 land was stated to be with
encroachers and not with the landowners.
The schemes published were as per the 1973 Adhiniyam. On 6/2/1991, a prayer was
made to the Collector to acquire the land and on 2/3/1994 the compensation was
deposited by the IDA with the Land Acquisition Collector. Notification was issued on
23/12/1994 under Section 4. Section 17(1) was also invoked (urgency provisions) and
enquiry under section 5A was also made. The Landowners were informed to collect, but
refused to do so as he believed the amount was very less. They claimed compensation of
Rs. 32,50,000 but received only Rs. 7,90,813.

A belated WP was filed for quashing the Acquisition proceedings. It was allowed on
28/8/1998, holding that the scheme lapsed on expiry of three years. Also held that
enquiry under Section 5A was illegally dispensed with. A Letters Patent Appeal was
preferred to the Division Bench, and on 29/1/2000, an order of status quo was passed.
The LPA was dismissed as not maintainable. On 4/4/2007, the HC directed maintenance
of status quo.
Application filed under Section 24(2) of 2013 Act. It was resisted by the IDA on the
ground that the acquisition had been completed and the amount deposited with the
Land Acquisition Collector. Construction was also almost complete. If it is not
completed in the remaining area, it would cause great hardship to the citizens and
widening of roads was necessary for smooth flow of traffic.

HC Held: The HC held, by order of 3/11/2014, that the proceedings had lapsed in view
of the decision in Pune Municipal Corporation and Shree Balaji Residential Assoication
v. State of Tamil Nadu.

Contention of IDA: (a) There was no lapse of proceedings in the instant case as
compensation was offered but not accepted by 5 landowners. For their own refusal,
blame cannot be put on IDA, and provision of section 24 cannot come to the rescue of
such landowners.
(b) 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.
(c) The expression used in Section 24 of the 2013 Act is “compensation has not been
paid”, and not that “it has not been deposited under Section 31”.
(d) There was no lapse of proceedings under Act of 1894 in view of the non-deposit
under Section 31, and the only liability is of higher interest of 9% for the first year from
the date of taking possession and thereafter to pay the interest at 15%.

Supreme Court Held: (a) The Acquisition proceedings do not lapse if the amount is
deposited in the Treasury and such fact is made known to the claimants by the
competent authority as required by law.
(b) Only interest is attracted, in case if the deposit is not made in Court.
(c) Did not agree with the Pune Municipal Corporation judgement. However, the bench
stated that the present judgement did not render the Pune Muncipal Corporation
Judgement per incuriam. The Judgement may have to be reconsidered by a larger
bench inasmuch as it was decided by a bench of three judges. (even this was 3 bench
judgement)
(d) Directed Registry to place the papers before the CJI for appropriate orders.

3. Indore Development Authority v. Manoharlal & Ors. Pertinent Issue/s:

1. Whether amount deposited to Treasury amounts to deposition of compensation
2. Whether both conditions under Section 24(2) need to be fulfilled (non payment of
consideration and failure to take possession), or whether either can be fulfilled for it to
be applicable.

Held: Issue 1
(a) Government’s obligation to pay compensation was complete when it tendered or
offered the compensation to the landowners.
(b) The Government was not obligated to deposit the compensation in Court on the
landowner’s refusal to accept the same.
(c) The deposit of compensation in the treasury instead of the Court caused no
prejudice to the landowner and that the consequence of non-deposit in Court was
limited to a higher rate of interest being payable as per Section 34 of the 1894 Act.
(d) The proceedings did not lapse if the compensation tendered was refused by the
landowner or reference was sought for a higher compensation

Issue 2
(a) Thus, the court had to decide whether the “or” in “the physical possession of the
land has not been taken or the compensation has not been paid” had to be interpreted
as disjunctive (or) or as conjunctive (and/nor). It held that when two negative conditions
are separated by an ‘or’, as per principles of statutory interpretation, they have to be
read as conjunctive, that is, and/nor.
(b) In light of this it was held that the “or” in Section 24(2) has to be read as “nor/and”.
This implied that if the award has been passed 5 years or more before 1/1/2014, and
neither physical possession was taken, nor compensation was paid, the proceedings
would laps. However, even if either of them was done, then the proceedings would be
saved. (Gv till here)
The most striking feature of IDA 2018 was that it did not consider the literal/colloquial
meaning of the word 'paid' at all. Instead, it went on to say that the word 'paid' could not
mean 'deposited in the account of a beneficiary' because the word 'deposit' had only been
used in the proviso to Section 24 and not in the main Section. It also laid emphasis on the fact
that the consequence of the proviso was not that the proceedings would lapse- it was only that
compensation would have to be paid as per the 2013 Act. However, it failed to notice that the
consequence in the proviso was different because it dealt with a scenario where there were
multiple land holders. For land acquisition to lapse and to be restarted could prove to be an
administrative nightmare in such scenarios.
In any case, it then went on to observe (without much reasoning) that even the word 'deposit'
in the proviso to Section 24(2) did not refer to 'deposit in court' but to a deposit made with a
land acquisition officer or with the treasury. Notably, this is not what the text of the proviso
says. However, the Court relied on this inference to say that, because of this, even the word
'paid' in Section 24(2) could not just refer to a 'deposit in court'. It eludes the authors of this
piece as to how such a jump could ever be made. Nevertheless, with this reasoning, the Court
then arrived at the conclusion that the word 'paid' necessarily had to mean 'tender'. Even if the
amount which had been tendered was refused, the obligation to pay was complete and hence,
the word 'paid' in Section 24(2) meant 'tender'. Although the Court seeks to base its
conclusion in Section 31 of the 1894 Act, it is inescapable that the Court effectively upends
the scheme of that Section. It culls out a meaning of 'paid' nowhere to be found in Section 31.
In IDA 2020, the Court took one step forward from its reasoning in IDA 2018. The Court
interpreted the word 'paid' but said that it would be unfair to hold it against the Collector that
the landowner refused to accept payment or that she was prevented from making a payment.
Section 31 of the 1894 Act was known to the Court. Even then, the Court did not consider
that the Collector could have deposited this money into court even if the land loser refused to
accept it. While this may have not been an interpretation in consonance with the text of the
provision, it certainly would have continued the position laid down post-Pune Municipal
Corporation and not upset the state of affairs. The Court seems to lay emphasis on the fact
that neither the 1894 Act nor the 2013 Act contain any provision that provides for lapse of
proceedings. Therefore, it said that even Section 24 could not provide for it. This reasoning,
in our view, thoroughly lacks merit. Just because no other provision in the two statutes
contemplated such a measure does not mean that Section 24 could not.
The Court also based its decision on the reasoning that, if a landowner has refused to accept
the compensation tendered, she cannot then take advantage of her own wrong. However, this
reasoning fails to appreciate the fact that the 2013 Act is a welfare legislation and Section
24(2) only deals with scenarios where an award of compensation had been made five years or
more prior to the enactment of the 2013 Act. Therefore, it only applies in cases where an
award had been made before January 1, 2009. The landowners did not refuse the
compensation because they expected the proceedings to lapse. Grossly unjustified
compensation offers have consistently been a major cause of the refusal to accept the offer.
The CPR Study showed that in cases that had travelled to the Supreme Court, litigants on an
average spent as many as 20 years just to receive their share of compensation. Out of 445
such cases between 1950 to 2016, 392 (a whopping 88%) saw an increase in the
compensation, with 10% cases seeing no change in compensation and a minor decrease in
compensation in a mere 7 cases. What is even more telling is the fact that the average
compensation awarded by the Supreme Court was about 6 times of the original award made
by the Collector. Naturally, the Supreme Court statistics only reveal the top of the pyramid
and the actual numbers of such cases pending before the High Courts and the Trial Courts
would be a lot more.
It is fair to assume that the Parliament would be privy to these trends when enacting a welfare
statute such as the 2013 Act. Section 24(2) is very evidently then designed to cater to that
section of society which has been passing through the corridors of several courts from a time
prior to January 1, 2009, at the very least only to receive their fair due. The State ought to
have been more proactive in pursuing acquisition and fair in the assessment and handover of
compensation, if it seriously wanted that parcel of land. Given the laxity of the State
apparatus, it was only fair that land holders be accorded the whole gamut of benefits under
the 2013 Act. This surmise as to legislative intent is also backed by numbers. The CPR Study
showed that in relation to the cases under Section 24 of the 2013 Act, almost 83% of them
were where no compensation whatsoever had been paid to the land losers and 11% of them
were cases where neither compensation was paid nor had any physical possession of the land
been taken. As mentioned earlier, being cognizant of the legislative intent, the Supreme Court
invalidated the acquisition proceedings in a whopping 95% of these cases and remitted 3.5%
to be decided by lower courts.
These numbers also underscore two further points. First, they show that even though the
position in Pune Municipal Corporation was untenable as a matter of interpretation, it was
still preferable to the position under Indore Development Authority. If 83% of the cases didn't
even have the compensation being actually paid or being deposited in court, the land owners
were left in a precarious position where they had no certainty either as to their land or to
compensation. With compensation deposited in court, the aggrieved can always litigate the
quantum with some assurance that the amount is available in court.
Second, IDA 2020 concluded that the word 'or' in Section 24(2) should be read as 'nor/and',
thereby requiring both compensation not being paid and possession of the land not having
been taken as preconditions for lapse. Section 24(2) is unambiguous in its wording that either
of these conditions must be satisfied. The Constitution Bench has committed a grave error of
law by interpreting a non-controversial point incorrectly. It seemed to rely on assumptions
such as: (i) Section 24 is a penal provision as it seeks to 'punish the acquiring authority for its
 lethargy in not taking physical possession nor paying the compensation'; and (ii) if 'two
negative conditions qualified by "or" is used, then "or" should be read as "nor" or "and"' in
case of absurdity'. Given that there is no absurdity, and that Section 24 is not a penal
provision by any stretch of imagination, relying on these assumptions and holding 'or' to
mean 'nor/and' is patently incorrect. As the data shows, only in 11% cases was neither
compensation paid nor had any physical possession of the land been taken.3

Useful link: https://www.scobserver.in/court-case/land-acquisition-case/land-acquisition-

plain-english-summary-of-judgment.
https://www.lawbulls.in/section-24-2-land-acquisition/.

http://lawjournals.stmjournals.in/index.php/njrel/article/view/558 (V good pdf)

Conclusion

Though the IDA- II judgment has put some crucial interpretational issues to rest, it might be
seen as an escape route for the Government, because acquisition proceedings initiated under
the 1894 Act can now be saved since the Government may have merely tendered or offered
compensation to the landowner.4
With this decision of the Constitution Bench, the most direct implication could potentially be
that land holders whose lands had been acquired even prior to January 1, 2009 may now, 11
years later, not only stand to lose their lands but also have to revive and pursue cases through
multiple courts just to receive a fair share of compensation. 5

1B.
Process Section Time limit
4(1) last
Social Impact Assessment 6 months
proviso
7(4) and
Appraisal of SIA by review committee 2 months
7(5)
Examination of land acquisition proposal
8 No time limit specified
and SIA by appropriate government
SIA expert group appraisal to 12 months but extendable by appropriate
14
Preliminary notification government
Preliminary notification to updating of land
11(5) 2 months
records
Preliminary notification to objections 15(1) 60 days
Preliminary notification to R&R survey 17(1) Time limit to be prescribed in Rules

3
https://www.livelaw.in/columns/section-24-of-2013-land-acquisition-act-a-series-of-misplaced-interpretations-
154185
4
https://www.lexology.com/library/detail.aspx?g=8b35b89b-c90a-44b3-9e10-dd7e244f36bc
5
https://www.livelaw.in/columns/section-24-of-2013-land-acquisition-act-a-series-of-misplaced-
interpretations-154185
Publication of declaration and summary
19(7) 12 months
of rehabilitation and resettlement
Time for compensation claims to be made 21(2) 30 days to 6 months
Declaration to Award 25 12 months
Correction of Award by Collector 33(1) 6 months
After ensuring compensation is paid (3 months) and
Award to Possession of land by collector  38(1)
monetary component of R&R paid (6 months).
Time for infrastructure entitlements under 38(1)
18 months after award
R&R proviso

Table 1: Comparison between the three Acts. (Might be useful)

Land Acquisition, Land Acquisition,
Rehabilitation and Rehabilitation and
Parameter Land Acquisition Act 1894
Resettlement Act, Resettlement Bill,
2013 2015
Several uses including
development and housing Exclusion of land for
projects, infrastructure etc., private hospitals and
Public Purpose No changes.
Inclusive of use by certain private educational
companies under certain institutions.
conditions.
5 categories mentioned
which are exempt from
Consent of 70% people the Act: 1) Defence 2)
for Public Private Affordable Housing 3)
Consent from No such clauses within the Partnerships; Consent Rural Infrastructure 4)
Affected People Act. of 80%  displaced Industrial Corridor 5)
people for acquisition of Infrastructure
private companies. Consent for other
projects remains the
same.
The above 5 categories
are exempt from this
Social Impact Has to be taken for
No Provision however, there are
Assessment every acquisition.
limits added on irrigated
land.
Intended use of land is Value specified in the
expressly prohibited in stamp duty and the
Market Value determining the market average of 50% Same as the 2013 Act.
value and is based only on recorded price in the
the current use of land. vicinity in sale of land
Two times the market
value in Urban areas;
Compensation Based on market value. Same as 2013 Act.
Four times the market
value in Rural areas.
Rehabilitation andNo provision R&R necessary for all R&R award for each
Resettlement affected families; affected family with a
Minimum R&R to be mandatory employment
provided to each family of at least one member
plus employment to the of the affected family.
 affected family.
Acquiring multi-crop last
is only the last resort. If
acquired under special
No limit on the above
Food Security No provision circumstances, the
mentioned 5 categories.
States have a duty to
cultivate an equal area
of land elsewhere.