Delhi Development Authority vs Nem Chand Sharma and Ors.
Background
Land in Delhi was acquired under the Land Acquisition Act, 1894 for the Delhi Development Authority. Possession of the land was taken and handed over to the beneficiary department on 27 December 1990, with the remaining 1 bigha handed over on 9 February 2007. Nem Chand Sharma and others filed a writ petition in the Delhi High Court claiming the acquisition had lapsed under Section 24(2) of the 2013 Act. The High Court accepted that possession had been taken, but still declared the acquisition lapsed because it was unclear what compensation had been paid and whether the payment procedure under Sections 30 and 31 of the 1894 Act had been followed, relying on Pune Municipal Corporation (2014).
Decision Breakdown
The Supreme Court allowed the DDA's appeal and quashed the High Court's judgment. It pointed out that Pune Municipal Corporation, the decision on which the High Court relied, had been overruled by the Constitution Bench in Indore Development Authority vs Manoharlal (2020). Under that Constitution Bench ruling, Section 24(2) requires twin conditions to be met before an acquisition lapses: possession must not have been taken and compensation must not have been paid/tendered; if either one has happened, there is no lapse. Since the High Court itself accepted that possession had been taken in 1990 and 2007, the acquisition could not lapse merely because of doubts about compensation. The Court reproduced the Constitution Bench's nine-point summary of the law on Section 24 and set aside the High Court's order, with no order as to costs.
Lesson Learnt
Under the 2013 land acquisition law as interpreted by the Constitution Bench, an acquisition lapses only if the government has neither taken possession nor paid compensation for five years or more before 1 January 2014; once possession is taken, doubts about whether compensation was properly paid cannot undo the acquisition. They only give rise to a claim for the money.