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Ayodhya Faizabad Development Authority and Anr. vs. Ram Newaj and others

Civil Appeal · 2022 INSC 614Decided 20 May 2022
Civil Appeal No. 2916 of 2022
M.R. Shah · B.V. Nagarathna

Background

The Ayodhya Faizabad Development Authority had acquired three plots of land; compensation for the acquisition was deposited in the government Treasury (not directly with a court), while possession of the land had already been taken back in 2005. The original landowners approached the Allahabad High Court (Lucknow Bench), arguing that because the compensation was never deposited in court, the acquisition should be treated as having "lapsed" under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The High Court agreed, relying on an earlier Supreme Court decision, and held the acquisition had lapsed. The Development Authority appealed to the Supreme Court.

Decision Breakdown

The Supreme Court held that the precedent the High Court relied on had since been overtaken by a later, definitive five-judge Constitution Bench ruling (Indore Development Authority vs. Manoharlal, 2020), which clarified that non-deposit of compensation in court does not, by itself, cause an acquisition to lapse: what matters is whether possession was taken and whether compensation was actually paid or tendered to landowners. Since possession here had been taken in 2005 and compensation had been deposited (in the treasury), the acquisition had not lapsed. The Court accordingly quashed the High Court's order and dismissed the landowners' writ petition.

Lesson Learnt

Under land acquisition law, an acquisition is not automatically treated as lapsed merely because compensation was deposited in the government treasury rather than directly in court: what decides the question is whether possession was taken and whether compensation was actually paid or tendered to the landowner.

Official source (sci.gov.in)View Judgment (PDF)

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