Day 12 Arguments

Land Acquisition

November 28th 2019

Senior Advocates Shyam Divan, Dinesh Dwiwedi, Siddharth Luthra, Manoj Swaroop and Dhruv Mehta made their submissions today. While all of them primarily focused on the interpretational questions related to section 24 of the 2013 Land Acquisition Act, Sr. Adv. Luthra’s submissions were limited to addressing whether the bench in Indore Development Authority could have held Pune Municipal Corporation to be per incuriam (i.e, made without regard to the relevant law).


Sr.Adv. Divan sums up his submissions

Sr.Adv. Divan commenced his submissions for the day by answering certain questions posed to him by the Bench on the last date of hearing. He placed reliance on a number of legal maxims and rules of statutory interpretation to corroborate his argument that the expression “paid” appearing in section 24 cannot be taken to mean deposit in a treasury or court. In this regard, he emphasised that:


  1. Compensation should always err in the favour of the land owner;
  2. Order of a stay on the acquisition proceedings by a court cannot be held to be prejudicial to the State. Whenever the State expropriates someone’s property, the liability to ensure fair and timely compensation rests on the State. If not, courts are duty bound to keep the State at bay and ensure citizens’ rights under Article 300A.


Thereafter, Sr. Adv. Divan proceeded to enumerate various practical scenarios that may emerge in the context of Section 24 and how his interpretation of section 24 is in line with the purpose of the 2013 Act:


  1. If payment is not tendered in time and physical possession not taken, then the acquisition lapses and the State must undertake fresh acquisition;
  2. If possession is taken but the compensation not paid, i.e. in a way that is accessible to the persons interested, then the acquisition lapses and State must conduct the acquisition afresh;
  3. If there is a payment made and the Reference Court comes to the conclusion that the payment was in excess, the State may frame appropriate rules for refund of such amounts paid, provided that the same has been “paid” and not merely “deposited” in the treasury. Similarly, the State can pay the balance, in case the Reference Court determines that further payment is to be made.


It was then reiterated that reading the ‘or’ as ‘and’ in section 24(2), would render the provision and the proviso impractical. Further, he vehemently objected to the State’s suggestion of adding another proviso or removing the phrase ‘physical possession’ from section 24(2). He also opposed the State’s suggestion to read ‘shall’ in section 31 (Rehabilitation and Resettlement proceedings) as ‘may’. He argued a welfare State cannot attempt to dispense of its obligations towards its citizens.


He finally wished to place on record an inter-governmental correspondence highlighting the slipshod situation of payment of compensation in land acquisition cases across the country. The request was denied by the Bench.

Contrasting use of ‘deposited’ and ‘paid’

Senior Advocate Dinesh Dwivedi argued that the phrase ‘deposit the amount of compensation in court’ appearing in section 31 of the 1894 Land Acquisition Act cannot be equated to mean ‘paid’.


Following on from this, he argued that the legislature had intentionally avoided using the expression ‘deposited’ in section 24(2) and instead used the expression ‘paid’. Given that different words and phrases used in the same section/provision cannot be taken to mean the same, ‘tender payment’, ‘deposit’ and ‘paid’ each will have distinct meanings, submitted Sr. Adv. Dwiwedi. Further, he argued that the same word cannot be given different meanings in different parts of the Act. Therefore, it was submitted that ‘paid’ must be construed uniformly across the Act and must imply nothing less than an actual payment to the persons interested, not constructive.


At this juncture, the Bench asked why the State should be kept at a disadvantage when a litigious individual might take advantage and bind the State in litigation to procure interest. Sr. Adv. Dwivedi responded by saying that such individuals may be directed to accept the payment in protest, so that the issue of interest does not arise later, if it is not a valid claim.


Sr. Adv. Dwiwedi then went on to clarify the scope of Sections 31 to 33 of the 1894 Act. He submitted that the exceptions carved out in these provisions are exhaustive, and it is only upon the occurrence of such contingencies can an acquisition be deemed to lapse. His submissions sparked a debate amongst the Bench, who discussed his propositions at length amongst one another. In particular, the Bench discussed the situations when the persons interested cannot be found and wondered if in such circumstances, a deposit in the Reference Court can be treated as ‘paid’.


Lapsing of proceedings not dependent on development of land

Sr. Adv. Manoj Swaroop began addressing the Bench in the post lunch session. In a departure from the counsels who argued prior to him, he submitted that no matter the stage of acquisition, development or degree of payment, if the compensation is not fully paid and physical possession not taken, the acquisition must lapse and the land must revert to the land owners. He emphasised that whether or not development of said acquired land had commenced is not a metric for determining whether proceedings should lapse.


On the issue of the proviso to section 24(2), he argued that the proviso applied to the entire section. Nevertheless, he submitted that it cannot save an acquisition process from lapse. In this regard, he submitted that if in five years the State hasn’t been able to complete an acquisition, the acquisition proceedings will have to be started afresh.

Section 24 provides a fresh cause of action

Sr. Adv. Dhruv Mehta advanced a novel argument on Section 24. He submitted that Section 24(2) provides the landowner with a fresh cause of action, if his land was being expropriated under the old regime. Thus, despite any number of unsuccessful challenges to the acquisition proceeding, Section 24 ensures that once the 5-year mark is crossed, the land owner can apply for the entire proceeding to be set aside.


Sr. Adv. Siddharth Luthra also made a brief submission during the day on the issue of whether the bench in Indore Development Authority could have held the decision in Pune Municipal Corporation per incuriam. The Bench though indicated that the same was not an issue before it.


Oral arguments will resume on December 2nd, Tuesday.

(Court reporting by Abhishek Sankritik)