THE RIGHT TO FAIR COMPENSATION AND TRANSPARENCY IN LAND

ACQUISITION, REHABILITATION AND RESETTLEMENT ACT, 2013

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,—

(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been repealed.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.

26. Determination of market value of land by Collector.–

(1) The Collector shall adopt the following criteria in assessing and determining the market
value of the land, namely:—

(a) the market value, if any, specified in the Indian Stamp Act, 1899 (2 of 1899) for the
registration of sale deeds or agreements to sell, as the case may be, in the area, where the land
is situated; or

(b) the average sale price for similar type of land situated in the nearest village or nearest
vicinity area; or
(c) consented amount of compensation as agreed upon under sub-section (2) of section 2 in
case of acquisition of lands for private companies or for public private partnership projects,
whichever is higher:

Provided that the date for determination of market value shall be the date on which the
notification has been issued under section 11.

Explanation 1.—The average sale price referred to in clause (b) shall be determined taking
into account the sale deeds or the agreements to sell registered for similar type of area in the
near village or near vicinity area during immediately preceding three years of the year in
which such acquisition of land is proposed to be made.

Explanation 2.—For determining the average sale price referred to in Explanation 1, one-half
of the total number of sale deeds or the agreements to sell in which the highest sale price has
been mentioned shall be taken into account.

Explanation 3.—While determining the market value under this section and the average sale
price referred to in Explanation 1 or Explanation 2, any price paid as compensation for land
acquired under the provisions of this Act on an earlier occasion in the district shall not be
taken into consideration.

Explanation 4.—While determining the market value under this section and the average sale
price referred to in Explanation 1 or Explanation 2, any price paid, which in the opinion of
the Collector is not indicative of actual prevailing market value may be discounted for the
purposes of calculating market value.

77. Payment of compensation or deposit of same in Authority.–

(1) On making an award under section 30, 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 by depositing the amount in their bank accounts unless
prevented by someone or more of the contingencies mentioned in sub-section (2).

(2) If the person entitled to compensation 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 Authority to which a reference under section 64 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 further that no person who has received the amount otherwise than under protest
shall be entitled to make any application under sub-section (1) of section 64:

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.
80. 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 cent. 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 cent. 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

 THE NATIONAL HIGHWAYS ACT, 1956

3G. Determination of amount payable as compensation.—

(1) Where any land is acquired under this Act, there shall be paid an amount which shall be
determined by an order of the competent authority.

(2) Where the right of user or any right in the nature of an easement on, any land is acquired
under this Act, there shall be paid an amount to the owner and any other person whose right
of enjoyment in that land has been affected in any manner whatsoever by reason of such
acquisition an amount calculated at ten per cent. of the amount determined under sub-section
(1), for that land.

(3) Before proceeding to determine the amount under sub-section (1) or sub-section (2), the
competent authority shall give a public notice published in two local newspapers, one of
which will be in a vernacular language inviting claims from all persons interested in the land
to be acquired
 (4) Such notice shall state the particulars of the land and shall require all persons interested in
such land to appear in person or by an agent or by a legal practitioner referred to in sub-
section (2) of section 3C, before the competent authority, at a time and place and to state the
nature of their respective interest in such land.

(5) If the amount determined by the competent authority under sub-section (1) or sub-section
(2) is not acceptable to either of the parties, the amount shall, on an application by either of
the parties, be determined by the arbitrator to be appointed by the Central Government.

(6) Subject to the provisions of this Act, the provisions of the Arbitration and Conciliation
Act, 1996 (26 of 1996) shall apply to every arbitration under this Act

(7) The competent authority or the arbitrator while determining the amount under sub-section
(1) or sub-section (5), as the case may be, shall take into consideration—

(a) the market value of the land on the date of publication of the notification under section
3A;

(b) the damage, if any, sustained by the person interested at the time of taking possession of
the land, by reason of the severing of such land from other land;

(c) the damage, if any, sustained by the person interested at the time of taking possession of
the land, by reason of the acquisition injuriously affecting his other immovable property in
any manner, or his earnings;

(d) if, in consequences of the acquisition of the land, the person interested is compelled to
change his residence or place of business, the reasonable expenses, if any, incidental to such
change.

CASE LAWS

 Aligarh Development Authority v. Megh Singh, (2016) 12 SCC 504.

Section 24 was intended to be a saviour to undo the wrong perpetrated at the government’s
hands in payment of compensation. To put in common parlance, it meant that the land that is
not utilised for the public purpose for which it was acquired, in case it is vacant for the last
few years, it will vest back in the original owner by lapsing of the acquisition proceedings or
if the Government has not paid the compensation then it will meet the same fate, in both these
situations it can be acquired afresh.
 “There is no question of ‘come and get’ the compensation while compulsorily acquiring the
land; the approach required under the law is ‘go and give’ ”

 Indore Development Authority and Ors. v. Manoharlal and Ors 2020 SCC OnLine SC 316.

ISSUE : Whether failures by the State to pay landowners compensation could lapse land
acquisition proceedings.

1. Primary issues pertained to the interpretation of “or” in Section 24(2). The provision states,
“where an award [under the LA Act] has been made five years or more prior to the
commencement of this [2013] 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”.
The issue was to decide if this “or” should be interpreted as an “and”. That is to say, can land
acquisition proceedings lapse if only one of the contingencies is met, or must both be met?
2. The second key issue pertained to the meanings of “paid” and “deposited” in Section 24(2).
Should “paid” be understood to mean “deposited”? In other words, does the duty to pay
compensation require the acquiring authority to deposit money in the landowner’s bank
account or in the relevant court? Alternatively, can the acquiring authority be relieved of its
obligation to pay, once it has tendered the appropriate compensation?
3. What conditions must the State fulfil to take "physical possession" of acquired land ?

DECISION OF COURT

1. Section 24(2) of the 2013 Act specifies when on-going land acquisition proceedings under
the LA Act can lapse. In particular, it applies to proceedings under the LA Act where an
award has been made at least five years prior to the commencement of the 2013 Act on 1
January 2014. Section 24(2) defines two conditions that can lead to a lapse: non-possession
by the State or non-payment to the landowner(s). The question before the Bench was whether
both or only one, of these conditions, has to be met to lapse proceedings.
This hinged on the correct interpretation of “or”. Assuming common parlance, the use of “or”
in the provision would imply that only one of the conditions has to be met to lapse an
acquisition. For example, if the State fails to pay the landowners, then the proceedings would
lapse. However, relying on Patel Chunibhai Dajibha, Justice Mishra held that “or” in this
context must be interpreted conjunctively. He observed that, as per G.P. Singh’s Principles of
Statutory Interpretation (14th Ed.), two negative conditions connected by an “or” in a statute,
must be construed as “cumulative”. In light of this, the Court held that the ‘or’ in Section
24(2) has to be read as ‘nor’/‘and’. This implies that if the award has been passed 5 years or
more before 01.01.2014, and neither physical possession was taken, nor compensation was
paid, the proceedings would lapse. However, even if either of them was done, then the
proceedings would be saved.

Section 24(2) states that land acquisition proceedings under the LA Act may lapse, if the
State fails to pay the beneficiary landowners: “where…the compensation has not been paid
the said proceedings shall be deemed to have lapsed”. However, the provision does not
specify precisely what such a payment entail. The counsels representing the interests of
landowners argued that payment requires either a completed payment to a landowner or a
deposit in the relevant courts (if the payment is disputed). Justice Mishra held that once the
State has tendered the compensation under Section 31(1) of the LA Act, its obligation to pay
is fulfilled. He referred to Black’s Law Dictionary, which defines the noun “tender” as an
“unconditional offer of money”. The Dictionary specifies that “the tender may save the
tendering partner from a penalty of non-payment”. Justice Mishra concluded that once the
State tenders the compensation, the land acquisition cannot lapse under Section 24(2). He
also clarified that in instances where a beneficiary has not received a payment, the State may
have to pay interest on the original compensation as per Sections 31 and 34 of the LA Act
(equivalent in 2013 Act: S.77 & 80).
Addressing the third that when can the State be found to have failed to take physical
possession of acquired land, it was held that the State must issue a memorandum in order to
take possession of the land. Justice Mishra clarified that there is no requirement on the State
to forcefully remove the previous landowners from the land in order to claim possession. He
held that once the State makes an award and issues a memorandum, the title no longer rests
with the landowner. At this stage, possession vests in the State as an “indefeasible right”, he
reasoned. Therefore, no representative of the State has to physically occupy the land.