Land Acquisition Collector (South) vs Hari Chand and Anr.
Background
Land in Delhi had been physically taken over by the government back in 1987 for a public purpose. Decades later, the landowner went to the Delhi High Court arguing that, under Section 24(2) of the 2013 land acquisition law, the acquisition should be treated as having "lapsed" because compensation had never been paid, relying on an earlier Supreme Court ruling (Pune Municipal Corporation) that supported this view. The High Court agreed and declared the acquisition lapsed. The Land Acquisition Collector appealed to the Supreme Court.
Decision Breakdown
The Supreme Court noted that the very precedent the High Court relied on (Pune Municipal Corporation) had since been expressly overruled by a five-judge Constitution Bench in Indore Development Authority vs Manoharlal (2020), which clarified the correct legal test: an acquisition lapses under Section 24(2) only if BOTH possession was never taken AND compensation was never paid for five years or more before 2014; if either one of those two things happened, there is no lapse. Since it was undisputed that physical possession of this land had already been taken in 1987, the acquisition could not be treated as lapsed merely because compensation was not paid. The Court therefore set aside the High Court's judgment and ruled that the acquisition remains valid, with no deemed lapse.
Lesson Learnt
Under the 2013 land acquisition law, an old acquisition is not automatically invalidated just because compensation was never paid. If the government already took physical possession of the land, the "deemed lapse" protection for landowners does not apply, though they may separately be entitled to compensation.