National Capital Territory of Delhi & Anr. vs. Subhash Chander Khatri & Ors.
Background
Land had been acquired under the old Land Acquisition Act, 1894, and the possession was actually taken over and used to build the Bankner Link Drain by the Irrigation and Flood Control Department. The landowners never disputed that the land was taken and used. They only argued that since compensation had not been paid, the acquisition should be deemed to have lapsed under the 2013 Act's Section 24(2). The Delhi High Court agreed, relying on the earlier Pune Municipal Corporation ruling, and the NCT of Delhi (Land Acquisition Collector) appealed.
Decision Breakdown
The Supreme Court held that the Pune Municipal Corporation precedent the High Court relied upon had since been overruled by a five-judge Constitution Bench in Indore Development Authority vs. Manoharlal (2020), which clarified that a lapse under Section 24(2) requires BOTH failure to take possession AND failure to pay compensation: non-payment alone is not enough if possession was already taken and the land put to use. Since it was undisputed that the government had taken possession and actually built a drain on the land, there was no lapse. The Court quashed the High Court's judgment and dismissed the original writ petition, allowing the government's appeal.
Lesson Learnt
Once the government has taken possession of acquired land and put it to public use (e.g., built infrastructure on it), a landowner cannot later claim the acquisition has lapsed merely because compensation was delayed: physical use and possession by the government defeats such a claim.