Ruling on S. 24 of Land Acquisition Act, 2013 creates flutter in court 4 of Supreme Court

Bar & Bench February 21 2018
Supreme court

Chandan Goswami & Murali Krishnan

The decision rendered by the Supreme Court in Indore Development Authority Vs. Shailendra (Dead) Through Lrs. And Ors. holding an earlier judgment of the Court in Pune Municipal Corporation & Anr. v. Harakchand Misirimal Solanki & Ors., as per incuriam, created quite a flutter in court room 4 of the Supreme Court today.

A three-judge Bench of the Supreme Court comprising Justices Madan Lokur, Kurian Joseph, and Deepak Gupta today took exception to the judgment in Indore Development Authority expressing its disapproval at a three-judge Bench holding a decision rendered by another three-judge Bench, per-incuriam.

"I don't want to remain silent on this issue. There are certain virgin principles which cannot be deviated from. The system exists on these holy principles. This Court should function as one institution", remarked Justice Kurian Joseph.

The Bench headed by Justice Lokur is now considering whether the issue should be referred to a larger Bench.

The Supreme Court in the year 2014 while deciding the Pune Municipal Corporation & Anr. v. Harakchand Misirimal Solanki & Ors. had ruled that landowners would receive higher compensation if the compensation for land acquired under the 1894 Act was retained in the treasury and was not paid to the landowner or deposited with a competent court.

Interestingly, this judgment was rendered by a Bench which had Justice Madan B Lokur and Kurian Joseph on it.

On February 8 this year, a three-judge Bench of the Supreme Court comprising Justices AK Goel, Arun Mishra and M Shantanagoudar had, by a 2:1 majority, held the judgment in Pune Municipal Corporation case to be per incuriam while interpreting the provisions of Land Acquisition Act, 2013.

Interestingly, Justice Goudar had dissented with respect to the ruling on Pune Municipal Corporation while agreeing with the majority judges on other aspects.

The Court had also ruled that once the amount of compensation has been unconditionally tendered and it is refused, it would amount to payment and obligation under section 31(1) stands discharged which would amount to discharge of obligation of payment under section 24(2) of the Act also.

The issue came up today before the Bench of Justices Lokur, Joseph and Gupta while adjudicating a batch of petitions arising out of a judgment rendered by the Punjab & Haryana High Court (all of which involved acquisition of land).

The issue of whether the judgment in the Indore Development Authority case could be taken into consideration was put forth before the bench.

It was the case of the petitioners that the matter is covered by the verdict in the Indore Development Authority case. However, the respondents had a different view on the applicability of Indore Development Authority.

Senior Advocate Mukul Rohatgi on behalf of the respondents argued that holding the 2014 judgment “per-incuriam” is a recipe for chaos.

It was his case that that a three-judge bench cannot hold a decision by another three judge bench to be per-incuriam. He submitted that once a three-judge bench decides not to agree with a judgment rendered by another three-judge bench the matter should be referred to a larger bench. He, therefore, requested that the matter be sent to a larger Bench and also prayed that an interim order be passed in order to avoid chaos that Indore Development Authority judgment could create.

Senior Advocate PS Patwalia, appearing for Haryana, sought an adjournment in the matter, expressing his inability to assist the Court owing to certain personal difficulties.

The Court observed that it will not pass a final order without hearing Patwalia but would consider passing an interim order if satisfied with the arguments of  Rohatgi. It then proceeded to hear the parties.

During the course of hearing the Bench was apprised of the fact that certain cases involving the 2013 Act were pending before different High Courts and if adjudicated based on Indore Development Authority judgment, it could cause of a lot of confusion.

Rohatgi also brought to the notice of the Court that many cases have already been decided on the basis of the judgment rendered in Indore Development Authority case.

The Supreme Court, therefore, decided to put on hold its February 8 judgment by directing the High Courts not to decide any case relating to interpretation of Section 24 of the Land Acquisition Act, 2013.

"Taking all this into consideration, we are of the opinion that it would be appropriate if in the interim and pending a final decision on making a reference (if at all) to a larger Bench, the High Courts be requested not to deal with any cases relating to the interpretation of or concerning Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013."

The Court has also requested other Benches of the Supreme Court to defer the hearing in any matter relating to land acquisition since the three-judge bench is mulling over the issue of referring it to a larger bench.

"Insofar as cases pending in this Court are concerned, we request the concerned Benches dealing with similar matters to defer the hearing until a decision is rendered one way or the other on the issue whether the matter should be referred to larger Bench or not. Apart from anything else, deferring the consideration would avoid inconvenience to the litigating parties, whether it is the State or individuals."

The matter will be taken up for hearing on March 7.

 Read the order below.

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