Indore Development Authority vs Manoharlal And Ors. Etc. on 6 March, 2020


Supreme Court of India

Indore Development Authority vs Manoharlal And Ors. Etc. on 6 March, 2020

Author: Arun Mishra

                                          1

                                                               REPORTABLE

                         IN THE SUPREME COURT OF INDIA
                          CIVIL APPELLATE JURISDICTION

                          S.L.P. (C) NOS.9036-9038 OF 2016)


         INDORE DEVELOPMENT AUTHORITY                  ….PETITIONER

                                      VERSUS
         MANOHARLAL & ORS. ETC.                        ….RESPONDENT(S)

                                       WITH

                          S.L.P.(C) NOS. 9798-9799 OF 2016)

                         S.L.P.(C) NOS. 17088-17089 OF 2016)

                            S.L.P.(C) NO. 37375 OF 2016)

                            S.L.P.(C) NO. 37372 OF 2016)

                         S.L.P.(C) NOS. 16573-16605 OF 2016)

                           S.L.P. (C) CC NO. 15967 OF 2016

                          CIVIL APPEAL NO. 19356 OF 2017

                          CIVIL APPEAL NO. 19362 OF 2017

                          CIVIL APPEAL NO. 19361 OF 2017

                          CIVIL APPEAL NO. 19358 OF 2017

                          CIVIL APPEAL NO. 19357 OF 2017

                          CIVIL APPEAL NO. 19360 OF 2017

                          CIVIL APPEAL NO. 19359 OF 2017

Signature Not Verified

Digitally signed by
NARENDRA PRASAD
Date: 2020.03.06
                         S.L.P.(C) NOS. 34752-34753 OF 2016)
17:50:52 IST
Reason:




                            S.L.P.(C) NO. 15890 OF 2017)
                         2


         CIVIL APPEAL NO. 19363 OF 2017

         CIVIL APPEAL NO. 19364 OF 2017


         CIVIL APPEAL NO. 19412 OF 2017


MA 1423 OF 2017 IN CIVIL APPEAL NO. 12247 OF 2016


            S.L.P.(C) NO. 33022 OF 2017


            S.L.P.(C) NO. 33127 OF 2017


            S.L.P.(C) NO. 33114 OF 2017


MA 1787 OF 2017 IN CIVIL APPEAL NO. 10210 OF 2016


MA 1786 OF 2017 IN CIVIL APPEAL NO. 10207 OF 2016


 MA 45 OF 2018 IN CIVIL APPEAL NO. 6239 OF 2017


            S.L.P.(C) NO. 16051 OF 2019


            DIARY NO. 23842 OF 2018


            S.L.P.(C) NO. 30452 OF 2018


         CIVIL APPEAL NO(s). 4835 OF 2015


        S.L.P.(C) NOS. 30577-30580 OF 2015
                                         3

                               JUDGMENT

ARUN MISHRA, J.

1. The correct interpretation of Section 24 of the Right to Fair

Compensation and Transparency in Land Acquisition, Rehabilitation

and Resettlement Act, 2013 (for short, ‘the Act of 2013’), is the subject

matter of reference to this five Judge Bench of this Court.

2. A three Judge Bench of this Court in Pune Municipal Corporation

& Anr v Harakchand Misrimal Solanki & Ors 1, interpreted Section 24 of

the Act of 2013. The order reported as Yogesh Neema & Ors v State of

Madhya Pradesh2, a two-judge Bench, however doubted the decision in

Sree Balaji Nagar Residents Association v State of Tamil Nadu 3 (which

had followed Pune Municipal Corporation (supra) and also held that

Section 24 (2) of the Act of 2013 does not exclude any period during

which the land acquisition proceeding might have remained stayed on

account of stay or injunction granted by any court) and referred the

issue to a larger Bench. Later, in another appeal (arising out of S.L.P.

(C) No.2131 of 2016 (Indore Development Authority v Shailendra (dead)

through Lrs. & Ors.4) the matter was referred to a larger Bench on

7.12.2017; the Court noticed that:

“cases which have been concluded are being revived. In spite of
not accepting the compensation deliberately and statement are
made in the Court that they do not want to receive the
compensation at any cost, and they are agitating the matter time

1
(2014) 3 SCC 183
2 (2016) 6 SCC 387
3 (2015) 3 SCC 353
4 2018 SCC Online SC 100
4

and again after having lost the matters and when proceedings
are kept pending by interim orders by filing successive petitions,
the provisions of section 24 cannot be invoked by such
landowners.”

3. The Court noticed that the reference to a larger Bench was

pending, and had been made in Yogesh Neema (supra). The Court also

felt that several other issues arose which it outlined, but were not

considered in Pune Municipal Corporation (supra). The Court therefore,

stated that the matter should be considered by a larger Bench and

referred the case to Hon’ble the Chief Justice of India for appropriate

orders. Indore Development Authority v Shailendra (hereafter, “IDA v

Shailendra”) a Bench of three Judges was of the view that the judgment

in Pune Municipal Corporation (supra) did not consider several aspects

relating to the interpretation of Section 24 of the Act of 2013. Since Pune

Municipal Corporation (supra) was a judgment by a Bench of coordinate

strength, two learned judges in IDA v Shailendra opined prima facie that

decision appeared to be per incuriam.

4. Later, in Indore Development Authority v Shyam Verma & Ors (SLP

No. 9798 of 2016) considered it appropriate to refer the matter to

Hon’ble the Chief Justice of India to refer the issues to be resolved by a

larger Bench at the earliest. Yet again in State of Haryana v Maharana

Pratap Charitable Trust (Regd) & Anr (CA No.4835 of 2015) referred the

matter to Hon’ble the Chief Justice of India to constitute an appropriate

Bench for consideration of the larger issue. These batch appeals were

referred to a five Judge Bench, which after hearing counsel, framed the

following questions, which arise for consideration:
5

“1. What is the meaning of the expression paid’/tender’ in Section
24
of the Right to Fair Compensation and Transparency in Land
Acquisition, Rehabilitation and Resettlement Act, 2013 (Act of
2013′) and Section 31 of the Land Acquisition Act, LA (Act of
1894′)? Whether non-deposit of compensation in court under
section 31(2) of the Act of 1894 results into lapse of acquisition
under section 24(2) of the Act of 2013. What are the consequences
of non- deposit in Court especially when compensation has been
tendered and refused under section 31(1) of the Act of 1894 and
section 24(2) of the Act of 2013? Whether such persons after
refusal can take advantage of their wrong/conduct?

2. Whether the word or’ should be read as conjunctive or
disjunctive in Section 24(2) of the Act of 2013?

3. What is the true effect of the proviso, does it form part of sub-
Section (2) or main Section 24 of the Act of 2013?

4. What is mode of taking possession under the Land Acquisition
Act
and true meaning of expression the physical possession of
the land has not been taken occurring in Section 24(2) of the Act
of 2013?

5. Whether the period covered by an interim order of a Court
concerning land acquisition proceedings ought to be excluded for
the purpose of applicability of Section 24(2) of the Act of 2013 ?

6. Whether Section 24 of the Act of 2013 revives barred and stale
claims? In addition, question of per incuriam and other incidental
questions also to be gone into.”

5. Question nos.1 to 3 are interconnected and concern the correct

interpretation of Section 24(2) of the Act of 2013. Following questions

are required to be gone into to interpret the provisions of Section 24(2)

of the Act of 2013:

(i) Whether the word “or” in Section 24(2) of the Act of 2013 used in

between possession has not been taken or compensation has not been

paid to be read as “and”?

(ii) Whether proviso to Section 24(2) of the Act of 2013 has to be

construed as part thereof or proviso to Section 24(1)(b)?
6

(iii) What meaning is to be given to the word “paid” used in Section

24(2) and “deposited” used in the proviso to Section 24(2)?

(iv) What are the consequences of payment not made?

(v) What are the consequences of the amount not deposited?

(vi) What is the effect of a person refusing to accept the compensation?

6. The Act of 2013 repeals and replaces the Land Acquisition Act,

1894, a general law for acquisition of land of public purposes, which

had been in force for almost 120 years, with a view to address certain

inadequacies and/ or shortcomings in the said Act.

7. The Act of 2013 is prospective and saves proceedings already

initiated under the Land Acquisition Act, 1894 before its repeal, subject

to provisions of Section 24 of the Act of 2013, which begins with a non-

obstante clause and overrides all other provisions of the Act of 2013.

8. On behalf of the Union, the States and various acquiring bodies

and development authorities, Mr. Tushar Mehta, learned Solicitor

General (who led the arguments, hereafter “SG”), Ms. Pinky Anand,

learned Additional Solicitor General (hereafter “ASG”), Mr. Anoop

Chaudhary and Mr. Jayant Muthuraj, learned Senior Counsel, Ms.

Shashi Kiran, Ms. Rachna Srivastava, Mr. R.M. Bhangade and Mr.

Rajesh Mahale, learned counsel, made their submissions.

9. The learned SG, arguing that this Court should overrule the ratio

in Pune Municipal Corporation (supra) and other judgments which
7

followed it, contended that the Court did not consider the various

interpretations of Section 31 of the (repealed) Land Acquisition Act, (“LA

Act” hereafter). He urged that the provisions of the Act of 2013, vis-à-

vis the timelines and consequences that would ensue if the acquisition

proceeding prolongs, were not examined. He highlighted that Section 24

is a transitional provision and such provisions should be given an

interpretation which accords with legislative intent, rather than so as to

impose hitherto absent standards, upon past proceedings, or

proceedings initiated under the previous regime, but which have not

worked themselves out. He urged that there is a presumption in favour

of restricted retrospective applicability of any provision in an enactment

unless a contrary intention appears. It is submitted that designedly, it

is the stage of passing of award under Section 11 of the LA Act, that

represents the determinative factor in the segregation for the

applicability of the provisions of the Act of 2013 or the LA Act. It is urged

that the opening part of the provision in Section 24(1) is a non-obstante

clause providing for a limited overriding effect of the Land Acquisition

Act, in case of the contingencies mentioned in Section 24 (1) (a) and (b)

of the Act of 2013.

10. Section 24 (1) (a) contemplates that where no award under Section

11 of the LA Act has been made, but proceedings had been initiated

under said Act, provisions of the Act of 2013 would apply limited to the

determination of compensation. In other words, the entire exercise de
8

novo, under the Act of 2013, will not be required to be undertaken.

Therefore, Section 24 (1) (a) contemplates a limited applicability of the

Act of 2013. Section 24 (1) (b) stipulates that where an award under

Section 11 of the LA Act has been made, the entire proceedings would

continue under that law and the provisions of the Act of 2013 would be

inapplicable. Section 24 (1) (b) is the larger umbrella clause under

Section 24, which protects the vested rights of the parties under the LA

Act if the stage of passing of award has been crossed. It is argued that

the umbrella clause Section 24 (1) (b), is followed by Section 24(2) –

which provides for the exclusionary clause. Section 24 (2), the learned

SG highlighted, is the only lapsing clause under the provision which

brings in the rigours of the Act of 2013 in totality by mandating the land

acquisition to be initiated de novo.

11. It is urged that Section 24 (2) opens with a non obstante clause

carving out an exception only from Section 24 (1). It visualizes that land

acquisition proceedings which had been initiated under the LA Act, an

award under Section 11 of the LA Act had been made. Consequently,

Section 24 (2) has no relation to Section 24 (1) (a) as it does not

contemplate an award under Section 11 of the LA Act at all. It is,

therefore, a limited exception to Section 24 (1) (b). Section 24 (2)

consequently is umbilically related to Section 24 (1) (b) as an exception,

wherein land acquisition proceedings would lapse in certain
9

contingencies even when an award under Section 11 of the LA Act had

been made.

12. It is submitted that the contingencies for lapsing in Section 24(2),

are subject to an award under Section 11 of the LA Act being made five

years prior to the commencement of the Act of 2013 (which is 1.1.2014).

If the award is so made, two contingencies result in complete lapse -: (a)

Physical possession of the land has not been taken; or (b) compensation

has not been “paid”. The provision for lapse, per Section 24(2) is, by its

nature, a vital provision, inviting serious consequences, in case those

contingencies arise. It is the interpretation of these “contingencies” that

requires further consideration. The “contingencies” ought to be

interpreted in a manner which saves the past transactions to the extent

they can be saved as it is clearly not the intention of the Act of 2013 to

tide over all past transactions.

13. The learned SG argued that the proviso to Section 24(2) further

carves out an exception to Section 24(2) viz, in case the award has been

made and compensation in respect of majority of landholdings has not

been deposited in the account of the beneficiaries, no lapsing will take

place, but all the beneficiaries specified in the notification for

acquisition shall be entitled to compensation in accordance with the

provisions of the Act of 2013.

10

14. Therefore, if only a minority of the claimants are disbursed with

the compensation, such claimants would get benefit of compensation

under the Act of 2013 to a limited extent without lapsing. Thus, it is

clear that even if the acquisition does not lapse, all the beneficiaries to

whom the compensation is payable would be entitled to compensation

under the Act of 2013.

15. It is submitted that Section 24(1)(a) and Section 24(2) are

balancing provisions controlling the extent of retrospectivity and

curtailing the effacement of rights. Such balance of protecting

acquisitions under the LA Act in some defined circumstances whilst

providing the enhanced compensation provisions under the Act of 2013

under some defined circumstances is the “middle path” that Parliament

adopted. It is contended that Section 24(2) is, therefore, controlled by

the proviso mandating again a further middle path consciously chosen

by Parliament.

16. It is argued that while providing for a transitory provision or

situations resulting into “lapsing” of all the steps already taken under

the Act under repeal, the legislature always envisages several

contingencies which emerge out of its day-to-day experience. The

manner in which section 24[2] and the proviso attached therewith are

drafted clearly discloses that Parliament intended certain inevitable

contingencies which frequently arose in land acquisition proceedings.

It was urged illustratively, that often, land acquired belongs to benami
11

owners, who cannot put forward title, or claim compensation or identify

themselves. In such situations, it may not be possible for an acquiring

authority to “pay” [which, as plain language indicates, would mean

setting apart for being taken by the entitled persons as explained

hereafter] to “all” land holders/ entitled persons. However, as is clear

from the proviso to Section 24[2], if it can be shown that the amount is

deposited for majority of share-holding, the acquisition would be saved

and cannot lapse; the only consequence would be the determination of

benefits under the Act of 2013. Parliamentary intent in the proviso

clearly appears to be to ascertain the stage up to which the land

acquisition proceedings under LA Act have reached. If nobody is paid

the compensation or compensation is not taken by everyone though

tendered and/or kept ready, the legislature contemplates such a

situation to be a reversible one and, therefore, provides for lapsing of all

previous stages prior to “non-payment”. However, if it can be

demonstrated that though – (1) compensation was tendered to all; (2)

some of them [for whatever reason] did not take the compensation; and

(3) compensation is deposited in case of majority of the land holdings

[viz. setting apart the share of such persons and making it available for

them to take it], then, neither proceedings would lapse nor the

compensation will be required to be determined under the Act of 2013.

In substance, therefore, the legal situation would be akin to the one

contemplated under Section 24[1][b] for all practical purposes.
12

17. It is submitted that during the drafting of the Bill, the legislative

intent and the apprehensions of the stakeholders in the acquisition

process is clearly depicted in 31st Report of the ‘Standing Committee on

Rural Development’ while discussing the ‘The Land Acquisition,

Rehabilitation and Resettlement Bill, 2011’ which was the precursor to

the Act of 2013. The learned SG relied on extracts of the Standing

Committee Reports, the draft Bill, various comments from government

and public agencies and departments and other stakeholders, the

stage(s) during which amendments were proposed to the draft

provisions (of Section 24) and its culmination into the present form and

structure.

18. The learned SG argued that the amendments proposed by the

Minister while introducing the Bill – to incorporate an explanation, as

to what constitutes “deposit” was not accepted in the legislative wisdom

of the Lok Sabha and the Bill so passed consciously did not incorporate

the Explanation (in the form of Proviso to Section 24(2)) providing for an

extensive and artificial meaning of the word paid. Further, reference to

“bank” account was also consciously not incorporated thereby leaving

the expression “to pay” and “to deposit” with its natural meaning and

leaving it to the discretion of the acquiring authorities to deposit the

compensation amount even in the treasury. It is possible that the

legislature may have considered the reality of 2012-13 where crores of

people did not have bank accounts. It was also urged that the rejection
13

of the amendment is in consonance with the apprehensions expressed

by other stakeholders and ministries at the said time. After the said Bill

was passed in the Lok Sabha, amendments were proposed and accepted

by the Rajya Sabha, giving the provision its final form. Further, it is

clear that the effort at the time was towards the drafting of a balancing

provision which protects the acquisitions from lapsing and at the same

time provides enhanced compensation under the new Act depending

upon the stage up to which the acquisition has progressed. This was

the genesis behind Section 24(1)(a) and proviso to Section 24(2) which

protect acquisitions from lapsing whilst providing for higher

compensation under the Act of 2013 to the land owners under limited

defined circumstances. It is submitted that it is necessary to read the

proviso to Section 24(2) along with the same provision and not Section

24(1)(b) as the former would be in accord with Parliamentary intent.

19. It was submitted that Section 24(2) intended a limited

retrospective operation: yet such retrospectivity operated and has to be

construed narrowly considering the nature and width of Section 24(2)

and the drastic consequences flowing from it. It is submitted that the

field of retrospectivity to be given under Section 24 needs to be

considered in the context of legislative intention manifested from

Section 114 of the Act of 2013 and Section 6 of the General Clauses Act,

1897. Both Section 114 (of the Act of 2013) and Section 6 of the 1897

Act clearly point to a narrow interpretation of Section 24 with the object
14

of saving on-going acquisition proceedings as far as possible. The

learned SG referred to the provisions of UK’s Interpretation Act, 1978;

he also relied on Bennion’s Statutory Interpretation Bennion’s Fifth

Edition, (2012) Indian Reprint, which reads as under:

“Where, on a weighing of the factors, it seems that some
retrospective effect was intended, the general presumption
against retrospectively indicates that this should be kept to as
narrow a compass as will accord with the legislative intention”

20. Reliance was placed on Secretary of State for Social Security v

Tunnicliffe5, to the effect that:

“Parliament is presumed not to have intended to alter the law
applicable to past events and transactions in a manner which is
unfair to those concerned in them, unless a contrary intention
appears”.

The learned SG also referred to the later judgment of the House of

Lords which dealt with the said question. It is submitted that sitting in

a combination of eight judges, in Yamashita-Shinnihon Steamship Co.

Ltd.v L’office Chefifien Des Phosphates & Anr 6, where it was held that

retrospective application of a statute can be made only when it does not

5
[1991] 2 All ER 712
6
[1994] 1 A.C. 486, where it was held that:

“The rule that a person should not be held liable or punished for conduct not
criminal when committed is fundamental and of long standing. It is reflected in the
maxim nullum crimen nulla poena sine lege. It is protected by article 7 of the
European Convention for the Protection of Human Rights and Fundamental
Freedoms (1953) (Cmd. 8969). The rule also applies, but with less force,
outside the criminal sphere. It is again expressed in maxims, lex prospicit non
respicit and omnis nova constitutio futuris temporibus formam imponere debet non
praeteritis. The French Civil Code provides that “La loi ne dispose que pour l’avenir;
elle n’a point d’effet retroactif:”
…..

But both these passages draw attention to an important point, that the exception only
applies where application of it would not cause unfairness or injustice. This is consistent
with the general rule or presumption which is itself based on considerations of fairness
and justice, as shown by the passage in Maxwell quoted, ante, p. 494C–E, and recently
emphasised by Staughton L.J in Secretary of State for Social Security v. Tunnicliffe
[1991] 2 All E.R 712, 724..”
15

visit anyone with unfairness. The learned SG referred to Zile Singh v.

State of Haryana7 where a three-judge Bench held that retrospectivity

should not be presumed to have been given to a provision, unless it says

so clearly, or through necessary implication. The guidance was given to

construe provisions for determining whether such intention is

expressed, in a given case.

21. It was urged that this Court, after assessing the unintended and

absurd results that an amendment may result in, purposefully

interpreted the provisions to be prospective in operation. It was also

emphasized that Section 24(2) is retrospective in nature and cannot be

held to be prospective; nevertheless, the extent of retrospectivity ought

to be narrowly construed while interpreting, given the harsh

consequences that it results in particularly against projects of public

interest. Reliance was placed on CIT v. Sarkar Builders8.

22. It is submitted that apart from the above, this Court has

consistently ruled on principles guiding the retrospective operation of

statutes. Though there is no bar against retrospective operation yet this

Court considered the practical realities before analysing the extent of

retrospective operation of the statutes. Reliance in this regard is placed

7 (2004) 8 SCC 01
8
2015 (7) SCC 579
16

on Jawaharmal v. State of Rajasthan9 and Rai Ramkrishna v. State of

Bihar10.

23. The learned SG next submitted that a spate of decisions of this

Court had followed the ratio in Pune Municipal Corporation (supra).

Emphasizing that the overall interpretation of Section 24 of the Act of

2013 has to accord with its scheme, it was stated that the object of that

provision was not only to declare that certain acquisitions lapsed.

Learned counsel, in this context, highlighted that Section 24 (1) (a) in

fact saves acquisition proceedings, where awards were not made before

the advent of the Act of 2013, by declaring that the award would be

made under that Act and compensation payable, in accordance with its

provisions. Section 24 (1) (b) on the other hand contemplates making of

award, under the old (LA) Act, but significantly states that all further

“proceedings” after the award would be taken under the new Act. It was

highlighted here, that Parliament clearly intended that the

compensation determined under the old Act had to be paid in terms of

the new Act, which is under Section 77. The learned SG submitted that

given these aspects, which are expressed in Section 24 (1), the non

obstante clause and the following provisions of Section 24 (2) have to be

interpreted contextually, and in a purposive manner. It was submitted

that Parliament did not intend that settled matters should be undone,

and whatever had attained finality, in acquisition matters, should not

9 1966 (1) SCR 890
10 1964 (1) SCR 897
17

be re-opened. He cited the decisions of this Court reported as Southern

Electricity Supply Co. of Orissa Ltd. v. Sri Seetaram Rice Mill11; Tinsukhia

Electric Supply Company Ltd v. State Of Assam & Ors12; Commissioner

of Income Tax v. Hindustan Bulk Carriers13; D. Saibaba v. Bar Council of

India & Ors14; Balram Kamanat v. Union of India15; New India Assurance

Co. v. Nulli Nivelle16; Government of Andhra Pradesh & Ors v. Smt. P.

Laxmi Devi17; Entertainment Network (India) Ltd. v. Super Cassette

Industries Ltd.18; N. Kannadasan v. Ajoy Khose & Ors19; H.S Vankani v.

State of Gujarat,20; State of Madhya Pradesh v. Narmada Bachao

Andolan & Ors.21

24. It was submitted that hitherto, in accord with Pune Municipal

Corporation (supra) and Balaji Nagar Residential Assn. v. State of Tamil

Nadu22 most decisions had accepted that the expression “or”- (occurring

in Section 24 (2)), where an award has been made under the old Act, 5

years before the commencement of the Act of 2013 “but the physical

possession of the land has not been taken or the compensation has not

been paid” – is to be read disjunctively, i.e., that if either condition is

11
(2012) 2 SCC 108
12
(1989) 3 SCC 709 @ para 118-121
13
(2003) 3 SCC 57 @ para 14-21
14
(2003) 6 SCC 186 para 16-18
15
(2003) 7 SCC 628 para 24
16
(2008) 3 SCC 279 @ para 51-54
17
(2008) 4 SCC 720 para 41 & 42
18
(2008) 13 SCC 30 para 132-137
19
(2009) 7 SCC 1 para 54-67
20
(2010) 4 SCC 301 para 43-48
21
(2011) 7 SCC 639 para 78-85
22
2015 (3) SCC 353
18

satisfied, the acquisition would lapse. However, submitted the learned

SG, the true and correct interpretation of the term “or” would be that it

ought to be construed as a conjunctive word.

25. Learned counsel next submitted that the expression “paid” should

be construed reasonably and not in a literal manner, as was done in

Pune Municipal Corporation (supra). Before the Act of 2013 was brought

into force, the modes of payment recognized by the law were: tendering

payment, payment into court in the event no one entitled to alienate the

property received it and payment into court upon disputes about the

entitlement to receive payment. These three situations were visualized

in Section 31 (2) of the old Act. It was emphasized that the consequence

of lapse of acquisition was never contemplated, in the event of refusal

to accept payment, or absence of anyone entitled to receive it, or in the

contingency of a dispute regarding entitlement to receive the amount.

This clearly meant that while payment of compensation was essential

and mandatory, the mode of payment was not mandatory. If, for

instance, the amount was tendered and not received, but instead, the

landowner refused it, the appropriate government could well deposit it

in the treasury, in accordance with prevailing financial rules, to

facilitate disbursement, as and when the landowner or the one entitled

to receive it, came forward and established entitlement. In such event,

the only consequence of non-deposit (in court, under Section 31) meant

that higher interest as mandated by Section 34 was to be paid.
19

26. The context of Section 24, learned counsel urged, is to provide for

a transitory provision viz. to take care of the pending land acquisition

proceedings which are ongoing under the LA Act when the Act of 2013

is brought into force w.e.f. 1.1.2014. The purpose and object of making

this provision is to balance the competing rights of public projects vis-

à-vis holders of the land. The object and purpose was to ensure that

where acquisition proceedings under LA Act have reached an advanced

stage and investment of public money had already been made, firstly,

the lapsing of such ongoing projects should be avoided and secondly as

far as possible, the land owners also can, without disturbing the process

of acquisition, be given the compensation under the Act of 2013.

27. It was reiterated that the legislature knows about the ground

realities faced in land acquisition proceedings. There are very few cases

where one or two land parcels are acquired in isolation. Mostly,

acquisitions take place of bigger tracts of land involving more than one

parcel of land and more than one person “entitled to compensation”.

When Parliament provided for a transitory provision in relation to

acquisitions under the old Act, it did not contemplate the possibility of

the entire payment procedure to all being not processed given the

practical situations arising in all such proceedings. Parliament is also

presumed to be aware of the fact that in almost all cases of acquisition,

the proceedings are stiffly opposed and in most of the cases, the tender

of compensation is also opposed under a wrong and misplaced notion
20

that the acceptance of the tender may be treated as acquiescence with

the quantum being tendered.

28. The learned counsel argued that Parliament did not expect the

acquiring authority to perform an impossible task of forcing payment to

the land owners unwilling, for any reason to accept it. The legislature,

therefore, does not use the expression of the land owners having

“accepted” the payment. It merely uses the expression “paid”. The

legislature clearly tries to balance the rights of land owners only in one

contingency viz. in a post award scenario and the award having been

made five years prior to 1.1.2014, when the amount is not “deposited”

in the accounts of the majority of the beneficiaries.

29. It was urged that on a true construction and taking the literal,

natural and grammatical meaning of the provisions in the context

referred above and keeping in mind the object it can safely be concluded

that the words “paid” and “deposit” are expressions of the same act

namely making the amount available (i.e. tendering) for being taken by

those entitled to it. It was urged that if this interpretation is not given

then the refusal by few persons or few persons being untraceable in the

acquisition of a vast tract of land would result in the drastic

consequence of lapsing of the acquisition proceedings.

30. It was urged by the learned ASG and Mr. Muthuraj, learned senior

counsel that the legislature cannot be presumed to intend such an
21

anomalous situation. The only way in which the object behind section

24 can be achieved is to give natural meaning to the words and

expressions used keeping the object in mind and treating the words

“paid” and “deposit” as connoting expression of the very same Act

depending upon the fact situation in each case. Learned counsel

submitted that by using the terms “paid” and “deposit”, Parliament

consciously left a leeway to save the drastic consequence of lapsing by

dealing with a particular situation in light of fact situation emerging in

each case. Not treating “paid” and “deposit” as synonymous or the

“deposit” so as to keep it available being the next step after “pay”, would

lead to disastrous situations as the acquiring authority may have

acquired vast tract of land and may have put substantial portion from

it to public use by constructing infrastructural projects. Such a

disastrous situation /consequence would never have been anticipated

or envisaged by the legislature. Learned counsel also referred to various

Standing Orders, framed as part of the financial code of several States,

which provided for procedure to deposit money in the treasury, when

landowners refused to accept compensation, or were untraceable, at the

time the amount was to be tendered.

31. It is submitted by the learned ASG that this Court should not

assume any omission or add or amend words to the statute. It is

submitted that plain and unambiguous construction has to be given

without addition and substitution of the words. It is submitted that
22

when a literal reading produces an intelligible result it is not open to

read words or add words to statute. In support of this proposition,

reliance was placed on some decisions23. It was therefore submitted

that the word “paid” does not and cannot mean actual de-facto payment

as it would amount to adding words which do not exist in the provision.

Similarly, the word “deposit” cannot mean “deposit in the Court” as that

was never the legislative intent nor can it be deduced from any accepted

interpretive process.

32. It was submitted that this Court, whilst interpreting Section 24 of

the Act of 2013, for the first time in Pune Municipal Corporation [supra]

and subsequent judgments, presumed that the word “paid” occurring

in Section 24(2) of the Act of 2013 would have to be interpreted as per

Section 31 of the LA Act. It is submitted that the said presumption

neither has any justification nor any such justification is examined in

the said judgments. It is submitted that the said presumption has

resulted in grave consequences without ascertaining the conscious

omissions on the part of the Legislature. The learned SG illustrated how

the terms “paid” and “deposit” have been used in different senses under

the LA Act and in the Act of 2013.

33. Learned counsel submit that firstly, Section 31 of the LA Act is

pari materia to Section 77 of the Act of 2013. There is neither any

23
BALCO v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552; Howard de Walden
(Lord) v. IRC, (1948) 2 All ER 825 (HL); V.L.S. Finance Ltd. v. Union of India, (2013) 6 SCC 278;
and Ram Narain v. State of U.P., AIR 1957 SC 18.

23

justification nor any requirement of interpreting Section 24 of the Act of

2013 in the shadow of Section 31 of the LA Act. It is submitted that if

as an alternative argument it is assumed that the expressions “paid”/

“tender” and the expression “deposited” have both been used

consciously in Section 31, as is the reason of drafting Section 24(2), an

anomalous situation occurs. In the proviso to Section 24(2) of the Act of

2013, expression used is compensation has not been “deposited” “in the

account of the beneficiaries”, which is separate from the “deposit in

Court” envisaged under Section 31(2) of the LA Act. It is submitted that

the expression “bank account” has not been used in Section 31 of the

LA Act at all and the expression “in the Court” has not been used in

Section 24(2) of the Act of 2013 at all. The said omissions carry weight

and cannot be ignored.

34. It is urged that if Section 24 of the Act of 2013 intended to attract

the rigours and technicalities of Section 31 of the LA Act, it would have

used the requisite phrase. It is submitted that the term Section 31 of the

LA Act is conspicuous by its absence in Section 24 of the Act of 2013.

Parliament intentionally used the phrases “paid” and “deposit” not in

terms of their meanings under Section 31 so as to avoid the rigours of

the said provision and to keep the practical exigencies of land

acquisition in mind, more particularly when Section 24 of the Act of

2013 is merely a transitory provision. It was argued that it is a settled

canon of interpretation that when the Legislature uses two different
24

phrases, the meaning they carry would be different. Harbhajan Singh v.

Press Council of India,24 is relied on.

35. It is submitted that Section 24(1) begins with a non-obstante

clause, providing for a limited overriding effect of the LA Act in case of

the contingencies mentioned in Section 24 (a) and (b). Section 24 (1) (a)

contemplates that where land acquisition proceedings were initiated

under the LA Act but no award was passed till the date the new Act

came into force viz. 1.1.2014, acquisition proceedings could continue,

however compensation will have to be determined under the Act of

2013. Section 24 (1) (b) provides that where an award under Section 11

of the LA Act has been made, the entire proceedings would continue

under the Act of 1894, as if it were not repealed. Section 24(2) provides

for an exclusionary clause which mandates the land acquisition

proceedings to be lapsed and initiated de novo.

36. It was submitted that the requirements for lapsing (of acquisition)

in Section 24(2), are subject to an award under Section 11 of the LA Act

being made five years prior to the commencement of the Act of 2013 viz.

1.1.2014. If the award is made and the following two situations

occurred, the proceedings will lapse; one, physical possession has not

been taken or (to be read as “and”) and two, compensation has not been

paid.

24 (2002) 3 SCC 722
25

37. Elaborating on the expressions “paid”/“tender” it was urged by

learned counsel that the meaning of expression “tender” is that when a

person has tendered the amount and made it unconditionally available

and the landowner has refused to receive it, the person who has

tendered the amount cannot be saddled with the liability, which is to be

visited for non-payment of the amount. Reliance is placed on the

meaning of the term in Black’s Law Dictionary.

38. It is apparent from aforesaid that “tender” may save the tendering

party from the penalty for non-payment or non-performance if another

party is unjustifiably refusing the tender. The expression “paid” would

mean in Section 31(1) of the LA Act and Section 24(2) of the Act of 2013

as soon as it is offered and made unconditionally available. Merely, if a

landowner refuses to accept it, it cannot be said that it has not been

paid. Once amount has been tendered that would amount to payment.

Thus, the term “paid” does not mean actual payment to be made but

whatever is possible for an incumbent to make the payment is only

contemplated. “Paid” does not mean receipt or deposited in court. There

may be refusal to receive an amount in spite of its tender. Thus, in view

of the decisions of this Court in Benares State Bank Ltd.v.CIT, 25

Collector of Central Excise v. Elphinstone Spg.&Wvg.Mills Co.Ltd.26 and

25
(1969) 2 SCC 316
26 (1971)1 SCC 337
26

J.Dalmia v Commissioner of Income Tax27, the provisions of Section 24(2)

should be construed as tender of the amount.

39. It is submitted that the three Judge Bench in judgment in Pune

Municipal Corporation (supra), while deciding the expression

“compensation has not been paid”, held that for the purposes of Section

24(2), the compensation shall be regarded as “paid”:

“if the compensation has been offered to the person interested
and such compensation has been deposited in the court where
reference under Section 18 can be made on happening of any of
the contingencies contemplated under Section 31(2) of the Land
Acquisition Act. In other words,the compensation may be said to
have been“paid”within the meaning of Section 24(2) when the
Collector (or for that matter Land Acquisition Officer) has
discharged his obligation and deposited the amount of
compensation in court and made that amount available to the
interested person to be dealt with as provided in Sections 32 and

33.”

40. It was argued that the conclusion in Pune Municipal Corporation

(supra) that deposit of the amount of compensation in the Government

treasury cannot amount to the said sum (amount of compensation)

“paid” to the landowners or persons interested. This view was taken

without dwelling on the legal connotation of the expression “paid” in

Section 24(2). In the process, it has also not taken into account the

binding law as held in Dalmia’s case and Benares State Bank’s case.

Though Section 34 of the LA Act was mentioned in passing para 16,

however it has not at all been considered. It is a very crucial provision,

which deals with the consequences of compensation not having been

27 (1964) 53 ITR 83 [AIR 1964 SC 1866]
27

deposited. Further, submit counsel, the matter relates to payment of

compensation from out of Government funds. Handling of Government

funds has to be strictly in accordance with the Standing Orders issued

by the States. The effect of those Standing Orders has also not been

considered in the judgment in Pune Municipal Corporation (supra). The

said judgment, therefore, having been rendered without taking into

consideration the aforesaid judgments, Section 34 of the LA Act and the

Standing Orders is, in the submission of the counsel, per incuriam.

41. It is submitted that another aspect which arises is, whether

prejudice or injustice would be caused in case the amount is not

deposited in the court and is deposited in the treasury, particularly

when the provision contained in Section 31 of the LA Act has to be read

conjointly with those in Section 34. By reason of Section 34, (of the LA

Act) one could claim interest – at a higher rate in case amounts were not

deposited under Section 31(2) if the authorities were at fault.

42. Arguing about whether the expression “or” should be read as

conjunctive or disjunctive, it was argued that after the stage of section

11 under the LA Act, there are two possibilities. The requisite authority

may take possession of the land in terms of Section 16 of the LA Act or

the said authority may proceed to tender payment under Section 31 of

the LA Act. The said two possibilities may be conducted simultaneously

or one after the other, there is no embargo in the LA Act regarding the

same.

28

43. It is submitted that Section 24(2), while providing for lapsing, uses

the two phrases concerning possession of the land and the tendering of

payment with the disjunctive word “or” thereby making it mandatory for

the acquiring authority to satisfy both contingencies in order to avoid

lapsing. It is submitted that the same would be against the legislative

intention of limited lapsing. Further, the said interpretation would be

against the purport of the possession and the title “being vested” in the

acquiring authority by virtue of the interpretation of section 16 in the

LA Act [as dealt with the latter part of the submissions]. It is submitted

that the intention of the Legislature could not have been to divest the

acquiring authority of the land after the said has been vested “free from

all encumbrances”. In line with the same, it is submitted that the word

“or” may be read as “and” so as to limit the lapsing only in cases where

both, payment has not been made (subject to proviso) and possession

has not been taken.

44. Reliance is placed on the judgments reported as Ishwar Singh

Bindra v State of UP28, where this Court approved and extracted

passages from Maxwell on Interpretation and Stroud’s Judicial Dictionary

to the effect that generally, the conjunctive “and” is used in a cumulative

sense, requiring the fulfilment of all the conditions that it joins together,

and herein it is the antithesis of “or” and that however, sometimes, even

in such a connection, it is, by force of its contents, read as “or”.

28

1969 (1) SCR 219
29

Similarly, Maxwell accepted that “to carry out the intention of the

legislature it is occasionally found necessary to read the conjunctions ‘or’

and ‘and’ one for the other”. Learned counsel also relied on Mobilox

Innovations (P) Ltd v Kirusa Software (P) Ltd29 which held that:

“38….Even otherwise ,the word “and” occurring in Section
8(2)(a)
must be read as “or” keeping in mind the legislative intent
and the fact that an anomalous situation would arise if it is not
read as “or” if read as “and”, disputes would only stave off the
bankruptcy process if they are already pending in a suit or
arbitration proceedings and not otherwise. This would lead to
great hardship; in that a dispute may arise a few days before
triggering of the insolvency process, in which case, though a
dispute may exist, there is no time to approach either an Arbitral
Tribunal or a court…”

Learned counsel also relied on several other decisions in support

of the same proposition (i.e. that the disjunctive “or” has to be read

contextually, and if need arises as “and”, i.e., as a conjunctive).30

45. Highlighting that the placement of the proviso (following Section

24 (2)) is significant, and not accidental, it was argued that the field of

operation of the proviso is immediately preceding provision, i.e. Section

24 (2) and not Section 24 (1) (b). It is submitted that the proviso to

Section 24 (2) contemplates a situation where with respect to majority

of the holdings, compensation not deposited in the account of

landowners (even though there being tendering of payment to all land

29(2018)1SCC 353
30Brown v Harrison 1927 All ER 195 @ pp. 203, 204 (CA); Ranchhodddas Atmaram & Anr v
Union of India 1961 (3) SCR 718; State of Bombay v R.M.D. Chamarbaugwala 1957 (1) SCR
874 (hereafter “RMDC”); Patel Chunibhai Dajibha v Narayanrao, 1965 (2) SCR 328; Punjab
Produce & Trading Co. v. Commissioner of Income Tax, West Bengal
, 1971 SCR 977; Ishwar
Singh Bindra & Ors v State of UP 1969 (1) SCR 219; Joint Director of Mines Safety v Tandur
and Nayandgi Stone Quarries (P0 Ltd 1987 (3) SCC 308; Samee Khan v Bindu Khan 1998 (7)
SCC 59. Prof. Yashpal & Ors v State of Chhatisgarh & Ors 2005 (5) SCC 420
30

owners and physical possession being taken), the benefits of the Act of

2013 qua the compensation would follow. It is argued that if the said

proviso is not interpreted to be a proviso to Section 24(2), a valuable

benefit extended by Parliament would evaporate. Learned counsel

contended that the said proviso provides for enhanced benefit even if

the twin conditions of Section 24 (2) are met. Therefore, the said proviso

saves the land acquisition and furthers the purpose and the object of

giving benefit of computation of compensation to all landholders.

Therefore, it is evident that the proviso is appropriately treated as a

proviso to Section 24 (2) and cannot be read as proviso to Section 24 (1)

(b) of the Act of 2013. It was argued that Parliamentary intent is clearly

discernible, because of the colon (a punctuation mark) occurring at the

end of Section 24 (2), which means that the proviso constitutes an

exception to that provision. Reference was made to Aswini Kumar Ghosh

& Anr v Arabinda Bose & Anr31 (where it was held that “…Punctuation is

after all a minor element in the construction of a statute and very little

attention is paid to it by English Courts. ……When a statute is

carefully punctuated and there is doubt about its meaning, a weight

should undoubtedly be given to the punctuation.”). Reliance was also

placed on Jamshed Guzdar v State of Maharastra.32

46. It was argued by Ms. Pinky Anand, learned ASG, that payment of

compensation is not a sine qua non for vesting in terms of Section 16 of

31 1953 SCR 1
32 2005 (2) SCC 591
31

the old LA Act. It is urged, in this context, that the old Act did not

provide any time line for depositing compensation; nor even for taking

over of possession. Ordinarily, the repeal provision under the Act of

2013 (Section 114) would prevail; however, Section 24 carves out an

important, albeit a limited scope from the repeal clause. Section 24 (2)

freshly introduces the concept of lapsing, in relation to acquisitions that

were initiated under the old Act. Necessarily, lapsing is to be considered

as a narrow concept. Supporting the learned SG’s argument that “or” is

to be read conjunctively, she highlighted that by reason of Section 16 of

the old Act, title vested in the State, upon taking of possession.

Divesting under old Act was impermissible. It was urged that were the

court to accept an interpretation, that either non-payment of

compensation, or taking of possession – under Section 24 (2), would

result in lapsing of acquisition, as held in Pune Municipal Corporation

(supra) and other decisions, land vested in the State, and conveyed to

third parties (either as allottees of housing schemes or public sector

undertakings, for one development project or another, or for public

purposes such as construction of roads, bridges and other public works)

would be divested.

47. Under Section 16 of the LA Act once award is made and possession

of land is taken, then the land vests absolutely with the Government.

Therefore, the word deemed to lapse in Section 24(2) should not be

interpreted to mean divesting of land from the Government which is
32

already vested in the Government and moreover in the absence of any

provision of divesting in the 1894 Act. In this context, the observations

in Bengal Immunity Co. Ltd. v. State of Bihar 33 that the legislature is

presumed to be acquainted with the construction which the courts have

put upon the words, and when legislature repeats the same words. This

Court had, in that judgment, quoted with approval the previous decision

in Sri K.C Gajapati Narayan Deo v, State of Orissa34 that

“Section of the Act empowers the State Government to
declare, by notification, that the estate described in the
notification has vested in the State free from all
encumbrances. ….. The consequences of vesting ether by Issue of
notification or as a result of surrender are described in detail in
Section 5 of the Act. It would be sufficient for our present purpose
to state that the primary consequence is that all lands comprised
in the estate including communal lands, non-ryoti lands, waste
and trees orchards pasture lands, forests, mines and
minerals, quarries, rivers and streams, tanks, water channels,
fisheries, ferries, hats and bazars, and buildings or structures
together with the land on which they stand shall, subject to the
other provisions of the Act, vest absolutely in the State
Government free from all encumbrances and the intermediary
shall cease to have any interest in them.”

Learned counsel also relied on the judgment of this Court in

Jagannath Temple Managing Committee v. Siddha Math 35, at para 53,

that “it is a settled principle of law that once a property is vested by an

Act of legislature, to achieve the laudable object, the same cannot be

divested by the enactment of any subsequent general law and vest such

property under such law.”

48. It was urged that serious consequences arise when condition nos.

(ii) and (iii) are to be read as not conjunctive or disjunctive. The word

33 (1955) 2 SCR 603
34 1954 SCR 11
35 (2015) 16 SCC 542 @ para 53
33

used to connect these two conditions is “or”; if it is not read

conjunctively, disastrous consequence leading to absurd result would

emanate. Once possession is taken over vesting occurs under Section

16 of the LA Act. Section 24(2) contains no stipulation that such vesting

of title of land stands nullified or divested. If the intention of Parliament

was to divest the State of its title that had to be stated in plain and clear

language. It was emphasized that the conjunctive use of “or” in Section

24 (2) would have not only momentous consequences to the State, but

innocent third parties, who would be exposed to the risk of being

divested title to the lands and properties, perfected by them, as allottees

or subsequent purchasers. Merely because a person who has received

compensation clungs on to the possession of the land and the same

shall lead to lapsing cannot be the intention of Parliament. Similarly,

one who received compensation, is not obliged to return the money to

the State in the event of lapsing under Section 24(2) of the Act of 2013.

It was urged, therefore, that absence of provision to return the

compensation received to Government convincingly points to

Parliamentary intent that “or” should be read as “and”; thus, only if

neither possession is taken (of acquired lands) nor is compensation

paid, (i.e., tendered to the party or parties) would the acquisition under

the LA Act lapse. Learned counsel also relied on several decisions in this

context.36

36Northern Indian Glass Industries v. Jaswant Singh and Ors., (2003) 1 SCC 335; Gulam
Mustafa v. State of Maharashtra, (1976) 1 SCC 800; Sita Ram Bhandar Society, New Delhi v.
34

49. It was highlighted by M/s Bhangde, Mr. Rajesh Mahale, and Ms.

Shashi Kiran, that the consequence of literally interpreting Section 24

(2) as to mean that the conditions are disjunctive (either that “or” should

be read as such) are too drastic and severe. Learned counsel pointed

out that as a result of allegations of non-payment of compensation,

lands which had been vested in the State and were subsequently made

over to the requisitioning agencies, and in respect of which title had

passed multiple times to other parties, now are exposed to the threat of

divesting of title. Learned counsel submitted that a deeming fiction

cannot be taken to this extent; such disastrous consequences could not

have been attributed by Parliament, because even if such were the

intent, there has to be a mechanism to restitute those likely to be

affected. Besides, the legality of such a law, divesting or taking away the

title of such innocent third-party purchasers, would be suspect,

because there is absolutely no provision for restitution or any form of

compensation in their favour.

50. On the question relating to the mode of taking possession, it was

argued that when the State is involved in taking possession of the

property acquired, it can take possession by drawing a panchnama. The

normal rule of State possessing the land through some persons would

not be applicable in such cases. On open land, possession is deemed to

Lieutenant Governor, Government of NCT, Delhi and Ors., (2009) 10 SCC 501 and
Chandragauda Ramgonda Patil and Anr. v. State of Maharashtra and Ors., (1996) 6 SCC 405
35

be of the owner. The way the State takes possession of large chunk of

property acquired is by drawing a memorandum of taking possession

as State is not going to put other persons in possession or its police

force or going to cultivate it or start residing or physically occupy it after

displacing who were physically in possession as in the case of certain

private persons, in case they re-enter in possession of open land, start

cultivation or residing in the house. Lawful possession is deemed to be

of the State. A number of decisions that accepted the mode of drawing

panchnama by the State consistently to be a mode of taking possession

were cited. In Banda Development Authority v. Moti Lal Agarwal37 this

Court observed that preparing a panchnama is sufficient to constitute

taking of possession. If acquisition is of a large tract of land, it may not

be possible to take physical possession of each and every parcel of the

land and it would be sufficient that symbolic possession is taken by

preparing an appropriate document in the presence of independent

witnesses and getting their signatures. Even subsequent utilisation of

a portion of acquired land for public purpose was still sufficient to prove

taking possession.

51. It is submitted that when the State acquires land and has drawn

memorandum of taking possession that is the way the State takes

possession of large tract of land acquired, it ought not necessarily to

physically occupy such land after forcefully displacing those physically

37 (2011)5 SCC 394 (hereafter referred to as “Banda Development Authority”)
36

in possession. Possession in law is deemed to be physical possession

for the State. This Court in a number of decisions has accepted the

mode of drawing panchnama by the State consistently to be a mode of

taking possession. It is submitted that this Court in T.N. Housing

Board v. A. Viswam38 held that recording of memorandum/panchnama

by the Land Acquisition Officer in the presence of witnesses signed by

them would constitute taking possession of land.

Also, reliance is placed on other decisions.39

52. Dealing next with the manner by which the period covered by an

interim order of Court ought to be excluded for the purpose of

applicability of Section 24 (2) of the Act of 2013, it is argued that a

settled proposition of law is that an act of a Court should not prejudice

any party. In view of the maxim actus curae neminem gravabit or even

in its absence, any interim order granted by the court cannot prejudice

any rights of the parties. It is argued that for a proper working of the

justice delivery system, once the court passes an order staying

dispossession, the State cannot take possession of the land. If an order

of the Court disables a person to take any action, the doctrine nemo

tentur ad impossible would be applicable that is, the law in general

excuses a party which is disabled to perform a duty and impossibility of

performance of a duty is a good excuse. Further, the Latin maxim lexnon

38(1996) 8 SCC 259
39Balwant Narayan Bhagde v. M.D. Bhagwat, (1976) 1 SCC 700; State of T.N. v. Mahalakshmi
Ammal
, (1996) 7 SCC 269; T.N. Housing Board v. A. Viswam, (1996) 8 SCC 259 and Om
Prakash Verma & Ors. v. State of Andhra Pradesh and Ors
, (2010) 13 SCC 158.
37

cogitad impossibilia, that is, the law does not compel a man to do that

which he cannot possibly perform. Since, it becomes impossible for the

State to take possession, for the duration a stay or interim order is in

operation, the consequence of an interim order cannot be used against

the State. Reliance for this legal position is placed on the judgments in

A.R. Antulay vs R.S.Nayak & Ors40, Sarah Mathew v Institute of Cardio

Vascular Diseases41 and in Dau Dayal v State of U.P42. In A.R.Antulay

(supra) it was held that no party is prejudiced by the court’s mistake.

Therefore, urged counsel, in cases where conduct of acquisition

proceedings were held up after the passing of an award, due to the

interim order of any court, in the absence of any specific provision to

that effect, a party who cannot perform its duties, and but for the order,

could have performed its stipulated task, within the time assigned,

should not be placed at a disadvantage, as that would amount to

granting a premium for one’s wrongdoing, or rank speculation. It is

urged, therefore, that it is imperative that the period during which the

State or the acquiring authority was prohibited/ injuncted by an interim

order of the court from taking possession has to be excluded. This

principle, submit learned counsel, is based on settled common law

principles. These are in fact rules of equity, justice and sound logic. In

the absence of their being a prohibition in the law these principles would

be attracted. The efficacy and binding nature of such common law

40 1988 Suppl (1) SCR 01
41 2014 (2) SCC 62
42 1959 Supp (1) SCR 639
38

principles cannot be diminished or whittled down in the absence of any

express prohibition in law. Coupled with the aforesaid principle is also

a principle of restitution. An interim order passed by the Court merges

into the final decision, goes against the party successful at the interim

stage. Unless otherwise ordered by the court, the successful party at

the end of the litigation would be justified in being placed in the same

place in which it would have been, had the interim order not been

passed. Undoing the effect of an interim order by resorting to the

principle of restitution is in fact an obligation of the court. The above

principles have been culled out and applied by this Court in the

judgment in South Eastern Coal Field Ltd v State of M.P. & Ors.43.

Learned counsel argued that general common law rules of equity,

justice and sound logic would certainly apply. It is submitted that

similarly, the doctrine of restitution has been discussed in several other

judgments of this Court including State of Gujarat v Essar Oil Ltd44. It

is, thus, submitted that the mere absence of an express provision under

Section 24(2) – to exclude the period during which an interim order

operates, which prevents the making of an award, or taking over of

possession of acquired land, would not in law imply that such

restitutionary and equitable principles would be inapplicable.

Contentions on behalf of landowners

43
2003 SCC 648
44 2012 (3) SCC 522
39

53. Mr. Shyam Divan, learned senior counsel, led the arguments on

behalf of landowners. He urged that the Act of 2013 is a new,

transformative and radical measure. The new law is a welfare state law,

not a colonial law – unlike the Act of 1894. Mr. Divan submitted that

the Act of 1894 resulted in several rounds of repeated litigation on

various aspect, such as payment of compensation, lack of legislatively

mandated timelines for completion of acquisition proceedings, etc. This

also resulted in amendments to the Act of 1894 (notably, the

amendments of 1967 and 1984) which, to some extent, sought to grant

relief to landowners. However, these too got mired in litigation. Learned

counsel relied on the judgments, reported as Dev Sharan v State of Uttar

Pradesh45 and Radhey Shyam v State of UP46. Repeated litigation was

the result of an unfair legal regime. It was submitted that such

judgments of this Court highlighted that the Act of 1894 was enacted

more than 116 years ago to facilitate acquisition of land and immovable

properties for construction of roads, canals, railways, etc. This law was

frequently used in the post-independence era for different public

purposes like laying of roads, construction of bridges, dams and

buildings of various public establishments/institutions, planned

development of urban areas, providing of houses to different sections of

the society and for developing residential colonies/sectors. In the recent

years, there is acquisition of large tracts of land in rural parts of the

45 (2011) 4 SCC 769
46 (2011) 5 SCC 553
40

country in the name of development and their transfer to private

entrepreneurs, who utilize it to construction of multi-storied complexes,

commercial centres and for setting up industrial units. Similarly, large

scale acquisitions were made on behalf of companies by invoking the

provisions contained in Part VII of the Act. Resultantly, such acquisition

led to deprivation of the source of livelihood of land owners, engaged in

agricultural operations and other ancillary activities in rural areas. A

large number of these people are unaware of, and unable to assert their

rights, and secure fair compensation. The unrest and inequity which

arose out of these deprivations, impelled the State to enact a modern

law, which ensured not only fair compensation, but other rights such

as rehabilitation, employment, higher solatium and a guarantee against

deprivation of certain kinds of lands. Thus, the Act of 2013 ushered a

new regime that starts from a fresh direction. Learned counsel also

relied on Bharat Sewak Samaj v. Lieutnant Governor & Ors.,47 to say that

the provisions of the Act of 1894 were outdated and were misused and

were oppressive to the interest of the landowners. Hence, the Act of

2013 was enacted and that this Court ought to interpret in the spirit of

the new beneficial legislation. Learned counsel urged that the benefits

so conferred should not be taken away by this Court by narrowly

interpreting its provisions.

47 2012 (12) SCC 675
41

54. Mr. Divan relied on the Statement of Objects and Reasons of the

Act of 2013 to say that the new law was framed, in recognition of

concerns expressed by the property owners of forcible acquisition

without following due process and without paying appropriate

compensation affecting livelihood of such owners, many times, who are

small property owners or persons having small agricultural holdings

and having been dependant on the said holdings, the new Act is made.

The Act aims to provide just and fair compensation, make adequate

provision for rehabilitation and resettlement for the affected persons in

the family, determination of compensation package on scientific

methods. It was urged that being a welfare legislation, the Act of 2013

constitutes a wholesome rejection of the colonial approach. Learned

counsel urged that under the new Act, unlike the Act of 1894, a Social

Impact Assessment (SIA) report has to be prepared, under Section 7, as

an integral component of acquisition proceedings. If acquisition is not

resorted to, in a time frame, the acquisition lapses; likewise, the new

Act contemplates the preparation of a rehabilitation scheme, which

would note the (a) particulars of lands and immovable properties being

acquired of each affected family; (b) livelihoods lost in respect of landless

who are primarily dependent on the lands being acquired; (c) a list of

public utilities Government buildings, amenities and infrastructural

facilities which are affected or likely to be affected, where resettlement

of affected families is involved and (d) details of any common property

resources being acquired.

42

55. Learned senior counsel argued that Section 24 constitutes an

exception to the general rule, i.e., lapsing of all acquisition proceedings,

by reason of repeal of the Act of 1894, and operation of Section 114.

Therefore, Section 24 has to be given effect to strictly, given that

Parliamentary intent was to ensure that acquisition proceedings did not

result in oppression and hardship. It was argued that having regard to

this salient feature, the provision (Section 24) should be literally

construed. Learned counsel submitted that the objective of new Act

must be kept in mind to understand the scope of Sections 11, 11 (A),

12, 31 and 34 of the 1894 Act, on the one hand, and provisions of

Section of 24 of the Act of 2013 on the other. Furthermore, it was argued

that the non-obstante clause must be allowed to operate with full vigour

in its own field. It was stressed that such a provision is equivalent to

saying that in spite of the provision or Act mentioned in the non-

obstante clause, the enactment following it, will have its full operation

of that, the provision indicated in the non-obstante clause will not be an

impediment for the operation of the enactment. Decisions in this regard

were cited by counsel.48

56. Mr. Divan relied upon the three stages preceding the Act of 2013

to urge that there was no doubt in the mind of Parliament, that lapsing

of acquisition proceedings was intended to ensue, in the event

48Madhav Rao Scindhia v. Union of India 1971 (1) SCC 85 (11 Judges); Smt. Parayankandiyal
Eravath v. K. Devi
(1996) 4 SCC 76 (2 Judges).

43

compensation were not paid; or possession were not taken, in respect

of awards made five years prior to coming into force of the Act of 2013.

It was argued that Section 24 should be given a plain and literal

construction, except to the extent that the term “paid” occurring in

Section 24(2) would also cover cases where a deposit is made before the

Reference Court in situations covered by Section 31(2) of the 1894 Act.

Elaborating on this, it is urged that the first decision of this Court, i.e.,

Pune Municipal Corporation (supra) took note of Section 24(2) in the

context of a pre-existing law. The Court was alive to the fact that under

the Act of 1894, where payment of compensation was tendered and the

land owner refused to accept the amount, the State is nevertheless

obliged to ensure that at all times, the amount should be made

available, in a place or an account, not within its control. It was urged,

therefore, that actual tender of the amount of compensation is a sine

qua non for the act of payment to be completed. It was considered that

in that event, the land owner does not accept the amount, it should be

deposited with the Court, a neutral and independent authority to whom

the land owner or anyone claiming under him can approach and draw

the amount. It was submitted that this obligation cannot be brushed

aside because aside from the question of acceptance of compensation

without prejudice, even at a later stage, the land owner might wish to

reconsider the compensation and avail of the amount.
44

57. Learned counsel submitted that the obligation to deposit the

amount in the Reference Court is an independent and absolute one in

that it is irrespective of whether the land owner sought a reference for

higher compensation to the Court (under the Act of 1894). Learned

counsel urged this Court to accept this interpretation, which according

to him, would give full effect to the intention of Parliament, i.e., to save

intention of Parliament. It was again highlighted that Parliamentary

intention was firstly to repeal the previous law to a limited extent and

save ongoing acquisition proceedings – in terms of Section 24(1) and

usher a new regime, i.e. Section 24(2) whereby indolence on the part of

the State agencies either with respect to payment of compensation or

with respect to taking over of possession, resulting in the lapse of

acquisition proceedings itself. Learned counsel relied upon the

decisions of this Court which followed and applied the law declared in

Pune Municipal Corporation 49.

58. It was argued that the submissions on behalf of the State and the

development authorities that “payment” included deposit with the

treasury or some other authority other than the Reference Court, could

49 Bharat Kumar v State of Haryana (2014) 6 SCC 586 (hereafter “Bharat Kumar”); Bimla Devi
v State of Haryana (2014) 6 SCC 583 @ para 3; Union of India v Shiv Raj (2014) 6 SCC 564 at
para 22; Sree Balaji Nagar Residential Association (supra) at para 14; State of Haryana v Vinod
Oil and General Mills 2014 (15) SCC 410 at para 21; Sita Ram v State of Haryana (2015) 3
SCC 597 at paras 19, 21; Ram Kishan v State of Haryana (2015) 4 SCC 347 at paras 8, 9, 12;
Velaxan Kumar v Union of India 2015 (4) SCC 325 at paras 15, 16, 17 (hereafter “Velaxan”);
Karnail Kaur v State of Punjab (2015) 3 SCC 206 at paras 17, 18, 23; Rajive Chowdhrie HUF
v State (NCT) of Delhi (2015) 3 SCC 541 at para 1; Competent Automobiles Co. Ltd v Union of
India AIR 2015 SC 3186 at para 4; Govt of NCT of Delhi v Jagjit Singh AIR 2015 SC 2683 at
para 3; Karan Singh v State of Haryana 2014 (5) SCC 738 at para 5; Shashi Gupta & Ors. v.
State of Haryana
2016 (13) SCC 380 at para 5; Delhi Development Authority v Sukhbir Singh
(2016) 16 SCC 258 at para 1 (hereafter “Sukhbir”).

45

not have been termed as compliance with the Act of 1894. Here, it was

urged that Parliament was acutely alive of the fact that the previous

land acquisition regime resulted in injurious and unconscionable delays

in payment of compensation. Furthermore, even after awards were

made, possession was never taken. This led to a great deal of

uncertainty as far as the land owners were concerned because they

could not move ahead in their life without compensation nor could they

take any steps to acquire new lands or properties. It was precisely to

address this mischief, rather a widespread one, that the Parliament

wished to enact a “bright line approach” whereby all acquisitions which

did not culminate either in payment of compensation or taking over of

possession in respect of awards made five or more years prior to

1.1.2014 had to lapse. It was submitted that Section 24(1) provided a

limited window in that it saved some acquisitions, i.e., notably where

awards had been made but further proceedings had not been taken or

where awards had not been made in both cases less than 5 years prior

to 1.1.2014. It was only in these two limited instances that acquisition

proceedings were allowed to continue or preserved. Thus, Parliamentary

intent was that in cases of all awards made five years or more prior to

the coming into force of the Act, if compensation was not paid or

possession of the acquired land not taken, automatically, as a matter of

law there was to be a lapse (of such acquisitions). This legal

consequence crystallised and was in consonance with the other

provisions of the Act of 2013. Arguing that if one were to take into
46

account this perspective, there can be no doubt that the expression

“paid” cannot mean anything other than tendering of compensation and

in the event of its refusal, or the three contingencies contemplated

under Section 31(2) of the Act of 1894, it is deposited in Court. If these

eventualities were not fulfilled and the amounts were merely kept back

with the Government by it, any compliance with some norms evolved as

part of the treasury or financial code there could have been no payment

or deposit in the eyes of law. Learned counsel submitted that this Court

should affirm the decision in Sukhbir Singh. It was also submitted that

unless Section 31 of the 1894 Act which postulates the performance of

a public duty in a particular manner and (through stipulated three

eventualities), such duty could be said to be fulfilled only and only if

that procedure were followed. Learned counsel relied upon the

judgment in Bharat Kumar, which noted that Section 24(2) has a

beneficial intent and begins with a non-obstante clause. Therefore,

urged counsel, literal meaning is to be preferred. It was highlighted that

Section 24(2) achieved a two-fold purpose, i.e., to preserve acquisition

proceedings initiated before the commencement of the Act and secondly,

conferring rights upon the land owners and other parties which did not

hitherto exist. Since these rights relate to the right to property which is

guaranteed by Article 300A of the Constitution, full effect must be given

to them rather than the construction which would destroy its very
47

purpose. In support of this argument, learned counsel relied upon Union

of India v. Shivraj 50.

59. Learned counsel submitted that the decision in Pune Municipal

Corporation (supra) was itself conscious of Section 31 and the

contingencies or eventualities contemplated under Section 31(2). That

apart, it also relied upon Ivo Agnelo Santimano Fernandes v. State of

Goa51, to say that the State cannot be – in the event of non-acceptance

of the compensation by the land owner or its inability to locate the land

owner or in the event of a dispute – keep the compensation amount with

itself and claim it to be part of same general treasury amount and

proceed to utilise it. It was submitted that precisely to deal with this

practice, the appeal provided that non-payment of compensation – and

in the event of any of the contingencies accruing in Section 31(2) of the

1894 Act, the failure to deposit it with the Reference Court would result

in lapse of entire acquisition itself. It was submitted that this

interpretation is not only literal but followed the objective and purpose

sought to be achieved by the Parliament through the provision. Learned

counsel urged this Court that the literal interpretation in this case

would also accrue with an equitable interpretation and ensure that the

real benefit of the new law would accrue to land owners deprived of their

properties and livelihoods for long periods without payment of

50 (2014) 6 SCC 564.

51 (2011) 11 SCC 506
48

compensation. Learned counsel, therefore, urged that the beneficial

interpretation adopted by this Court in Velaxan Kumar (supra) should

be accepted. Rajive Chowdhurie HUF (supra)52, it was argued, while

interpreting Section 24 of the Act of 2013 Act, the Court should not in

the guise of an interpretative exercise don the cap of a legislature. It was

submitted as to the State’s argument that the disjunctive “or” in Section

24(2) should not be read as conjunctive “and”. It was argued in this

regard that in all the three drafts that the Bill (which ultimately

culminated in the Act of 2013) went through53, the expression used

consistently was “but the physical possession”. In the three stages, the

intent was to normally ensure that the acquisition proceedings pending

for a long time were to lapse. It was emphasised that in the first version,

i.e., the Bill introduced on 5.9.2011, all acquisitions were deemed to

have lapsed regardless of whether the award was made or not, if

possession were not taken and also in those cases where the awards

were not made. Therefore, this Court should be cautious in interpreting

the disjunctive “or” in any manner other than in the literal sense.

60. The three broad situations covered under Section 24 are (i) cases

where the land acquisition process shall be deemed to have lapsed; (ii)

cases where the landholders are entitled to compensation in accordance

52 (2015) 3 SCC 541
53 Land Acquisition Rehabilitation and Resettlement Bill 2011 – introduced in Lok
Sabha on 05.07.2011; Right to Fair Compensation and Transparency in Land Acquisition
Rehabilitation and Resettlement Bill, 2013 as passed by the Lok Sabha on 29.08.2013 and
the Right to Fair Compensation and Transparency in Land Acquisition Rehabilitation and
Resettlement Act 2013 (as passed by both Houses of Parliament on 05.09.2013).
49

with the provisions of the Act of 2013; and (iii) cases where the land

acquisition proceedings continue under the 1894 Act as if it had not

been repealed. It was urged that the first set of cases are covered by

Section 24(2). The two conditions to be fulfilled as on 1.1.2014 to trigger

the deeming provision into operation, according to Mr. Divan, are firstly,

there must be an award under section 11 of the 1894 Act which has

been made five years or more prior to the commencement of the Act of

2013 (i.e., an award made on or before 1.1.2009); and secondly either

physical possession of the land has not been taken from the landowner

or compensation had not been paid as required under the Act of 1894.

61. It was argued that the second set of cases, where enhanced

compensation has to be paid, under the Act of 2013, are covered under

Section 24(1) and the proviso to Section 24. Section 24(1) provides that

where proceedings have not reached the stage of an award under

section 11 of the 1894 Act, the provisions to determine compensation

under the Act of 2013 apply. Further, the proviso to Section 24 provides

for compensation in terms of the Act of 2013 where the following

conditions are fulfilled, firstly an award has been made under section

11 of the 1894 Act; and secondly, compensation in respect of the

majority of the land holdings has not been paid to the landowners. It

was submitted that the “majority” is required to be reckoned with

reference to the award passed under the Act of 1894, and that awards

contemplated by the proviso are awards made within the period of five
50

years prior to the commencement of the Act of 2013 i.e., awards made

between 1.1.2009 and 31.12.2013.

62. Learned counsel stated that the third set of cases is where the

land owners do not get any benefit under the Act of 2013 and the

acquisition proceeds under the provisions of the Act of 1894. It was

argued that these cases are covered by section 24(1)(b) and to which

neither section 24 (2) nor the proviso applies. This covers situations

where though an award has been passed five years prior to the

commencement of the Act, neither of the conditions for deemed lapsing

are present. Mr. Divan urged that the provisions of the Act of 1894 will

continue to apply without any benefit in terms of increased

compensation where an award is passed within 5 years of the

commencement of the Act of 2013 but the majority of landholders have

been paid.

63. Mr. Divan then urged that this understanding of the provisions of

Section 24 is based on established rules of interpretation i.e., first, the

golden rule of interpretation requiring the Court to interpret statutory

provisions literally. Second, the rule of purposive interpretation was to

be used, having regard to the object of the enactment, the purpose of

the law in seeking to correct historical injustices and the legislative

intent to confer the benefit of the Act of 2013 on certain landholders

affected by the regime under the Act of 1894. The third rule to be

employed, is the rule of harmonious interpretation, such that all words
51

of the provision are given effect and no part of the provision is rendered

otiose; fourth, contemporaneous understanding of administrators

responsible for implementing a new law. Also an interpretation in such

a manner as to avoid inserting words, subtracting words, and avoids

anomalies or absurdities was necessary. Lastly it was urged that giving

a deeming provision its natural effect, which in this case results in a

rule of interpretation that the provisions of a beneficent legislation

ought to be interpreted in the case of ambiguity in favour of the

citizens.54

64. It was submitted that the interpretation of Section 24 outlined

above gives the plain and natural meaning to the key expressions used

in section 24 – “physical possession”, “paid”, and “deemed to have

lapsed”. He further argued that since Section 24 of the Act of 2013

must be read with section 31 of the Act of 1894, the expression “tender”

is also relevant and the interpretation he has advanced is consistent

with the natural meaning of “tender”.

65. Learned counsel for the landowners urged that the words ‘paid’

and ‘deposited in the account of the beneficiaries’ are two permissible

modes of making compensation available to landowners. Mr. Divan

54 Counsel cited Pratap Singh vs. State of Jharkhand (2005) 3 SCC 551 (5 Judges); Central
Railway Workshop vs. Vishwanath
(1969) 3 SCC 95; and M/s International Ore and Fertilisers
(india) Pvt. Ltd. vs. Employee State Insurance (1987) 4 SCC 203 in support of the rule of
beneficial construction of a welfare and remedial statute.
52

contended that these are two modes of paying the money to the

landowners. ‘Paid’, it was urged, means paid. It does not mean a deposit

in treasury. He further submitted that ‘deposit in the account of the

beneficiaries’ does not mean a deposit in the treasury. He argued that

there was no reason to depart from the rule of literal interpretation, and

the manner of payment, as held in Pune Municipal Corporation (supra),

is to be strictly in terms of Section 31 of the Act of 1894 as it is an

expropriatory legislation. It was contended as to the learned Solicitor

General’s submission that payment in terms of Section 24 is complied

with if the amount is tendered to the landowners, overlooks the

obligation of payment in terms of Section 24 is only met if the amount

is actually paid to the landowners. On the occurrence of the

contingencies mentioned in Section 31(2) of the Act of 1894, it ought to

be deposited in the Reference Court as defined under Section 3(d) of the

Act of 1894. He submitted that tendering money is not payment and

Section 31(1) of the Act of 1894 uses the words ‘tender’ and ‘paid’ to

convey different meanings and obligations. Mr. Divan argued that the

judgments cited by the learned Solicitor General in this regard

essentially deal with labour laws, and are inapplicable as these statutes

did not contain a provision such as Section 31 of the Act of 1894, which

strictly and precisely prescribes what is to be done in the event when

the payment is not accepted.

53

66. It was argued that no rules under the Act of 1894 contemplate

deposit in the treasury. Learned counsel submitted that standing

orders, which are merely administrative instructions issued for

conducting monetary transactions of the State, have in some cases been

confused to be Rules framed under Section 55 of the Act of 1894. The

Rules or the Standing Orders have not been produced and no evidence

has been furnished of compliance with the requirements of Section 55,

such as notification in the Gazette. All learned counsel submitted that

in any case, delegated/subordinate legislation cannot be inconsistent

with, or in any manner depart from the express and precise language of

the parent enactment. Again, it was submitted that the State’s

argument with respect to deposit of compensation amounts in the

treasury, is untenable, for two strong reasons: one, that Section 31 itself

directed the compensation to be deposited in the court. In the teeth of

this express position, the State cannot be heard to say that it could

nevertheless “deposit” the amount in the treasury, which is nothing but

keeping the money with itself. It was secondly urged, that even

otherwise, the Act of 1894 visualized that in regard to matters not

provided expressly, rules could be made (Section 55).

67. Learned counsel submitted that the State’s argument regarding

the interpretation of ‘physical possession’ to be possession as per the

ratio in Banda Development Authority (supra), is incorrect. It was

submitted that it is important to take note of the conscious inclusion of
54

the word ‘physical’ in relation to possession. An important distinction

is required to be drawn in respect of de jure / constructive / deemed

possession and ‘physical’ possession. Even if it is conceded that

drawing of a Panchnama is a valid mode of initially taking possession of

vast tracts of vacant land, the intention of the legislature is that over a

period of five years, such possession must transform to evident and

demonstrable ‘physical’ possession i.e., the manifestation of actual

control and dominion over the subject land(s). Learned counsel relied

on several decisions in support of their argument that “physical

possession” should be construed as actual physical possession, and not

constructive, or de jure possession, which in most cases is possession

on paper.55

68. Arguing next regarding the interpretation of the proviso to Section

24, it was stated that the same is to be read as a proviso to Section 24

and not Section 24 (1) (b). Mr. Divan submitted that a proviso may in

certain cases operate as an independent provision, and the proviso to

Section 24 is a stand-alone provision which operates on its own terms.

To the extent it is linked to any provision in Section 24, it is linked to

Section 24(1)(b) since it permits enhanced compensation (in a particular

contingency of non-payment to majority of the landowners) even if an

55Seksaria Cotton mills v. State of Bombay 1953 SCR 325 Para 21; Superintendent v. Anil
Kumar
(1979) 4 SCC 274 (Paras11-16); B. Gangadhar v. Rajalingam (1995) 5 SCC 238 (Para
5-6) Guruchand Singh v. Kamla Singh (1976) 2 SCC 152 (Paras 21-24).

Mohan Lal v. State of Rajasthan (2015) 6 SCC 222 (2 Judges)

Para 11 to 15 endorsing contextual interpretation of the term
55

award may have been passed as contemplated in Section 24(1)(b). Mr.

Divan placed reliance on the reasons given in the judgment of Delhi

Development Authority v. Virendra Lal Bahri, [SLP [C] No.37375/2016].

69. All counsel for landowners submitted that there is no valid reason

to exclude from the period of 5 years under section 24(2), the time

during which a landowner had the benefit of an interim order of a court.

In support of this argument, it was argued firstly, that Parliament did

not expressly exclude such a period in Section 24. Second, where in the

Act of 2013, the legislature did want to exclude the period of a stay or

injunction, it has done so by using express words such as in the proviso

to Section 19 and the explanation to Section 69 of the Act of 2013.

Third, he submitted that the maxim “actus curiae neminem gravabit”

which means that “the act of court shall prejudice no one” has no

application here, as this is a maxim which is applied generally as a

principle of equity in individual cases to ensure that there is no

injustice. The maxim rarely, if ever, is applied to interpret a statute. Mr.

Divan submitted that this Court has declined to rely on this maxim in

at least two reported decisions – Padma Sundar Rao v. State of Tamil

Nadu56 and State of Rajasthan & Ors. v. Khandaka Jain Jewellers 57.

Mr. Divan further placed reliance on Snell’s Equity (33rd Edition, 2015),

which states that the maxim of equity is not a specific rule of principle

of law. It is a statement of a broad theme which underlies equitable

56 (2002) 3 SCC 533
57 (2007) 14 SCC 339
56

concepts and principles and as a result, the utility of equitable maxims

is limited. It further states that the maxim may provide some limited

assistance to court in two broad types of situation:

“The first is when there is some uncertainty as to the scope of a
particular rule of principle, and a court has to fall back on more
basic principles to resolve that uncertainty. The second is when
a court is exercising an equitable discretion, and seeks to
structure that exercise by referring to broader, underlying
principles.”

70. Learned counsel further placed reliance on a three-judge Bench

decision of this Court in The Commissioner of Sales Tax v. Parson Tools

and Plants58, where it was held that:

‘If the Legislature wilfully omits to incorporate something of an
analogous law in a subsequent statute, or even if there is a casus
omissus in a statute, the language of which is otherwise plain
and unambiguous, the Court is not competent to supply the
omission by engrafting on it or introducing in it, under the guise
of interpretation, by analogy or implication, something what it
thinks to be a general principle of justice and equity.’

It was submitted that there is no occasion for excluding time spent

on litigation. Parliament could have specified a particular date such as

1.1.2009 as the cut-off point under section 24(2). Had a date been so

specified, there would have been no occasion to exclude time. Instead

of specifying a particular date, the Legislature in the Act of 2013

prescribed the cut-off point with reference to the commencement of the

Act. This method of specifying the cut-off point would not attract the

maxim “actus curiae neminem gravabit”. It was argued that the occasion

for excluding time would arise only where there is a starting point and

58 (1975) 4 SCC 22
57

a statutory period to complete the task. In such provisions, it may be

reasonable to provide for the exclusion of time by appropriate language

in the section. Here, where a cut-off date is prescribed and as such there

is no starting point and period for completion of the task, the notion of

excluding time spent in litigations is an alien concept. It was, therefore,

submitted that it is not the court’s business to stretch the words used

by the Legislature to fill in gaps or omit words used in the provisions of

an Act, i.e., to fill in an obvious and conscious exclusion of a

contingency, or a casus omissus. In support of this submission, learned

counsel relied on decisions of this Court.59 It was also argued that this

Court should not also exclude any period or periods, spent in litigation,

when interim orders were operating, because, firstly, in each such

instance, the landowners were aggrieved by different kinds of arbitrary

behaviour, such as not providing opportunity of mandatory hearing

(under an absolutely absurd rejection of objections; failure to take note

of actual developmental needs, and taking of lands, unconnected with

a public purpose, or obvious instances of expropriation of utilities and

amenities such as schools, community assets, etc. These led the courts,

on a prima facie consideration to assess the merit in the challenge and

grant interim orders. Such instances could not be called as frivolous

litigation, warranting exclusion of time, to deprive the benefit of lapsing,

enjoined by the new law. Secondly, it was argued that repeated attempts

59G. Narayanswami v. G. Pannerselvam (1972) 3 SCC 717 and Kuldip Nayar vs Union Of
India
(2006) 7 SCC 1- both decisions of Constitution Benches.

58

were made in Parliament to amend the law, to exclude the time, in the

manner sought by the State, by use of the maxim actus curiae neminem

gravabit. However, such amendment could not pass muster.

71. Learned counsel contended that Parliament’s intent is to confer a

benefit on landholders who were impacted by the erstwhile unfair

regime. Urging that under the old law, landholders, to protect their

assets from expropriation of their land at paltry amounts, were

compelled to use legitimate systems of securing redress by filing cases

in court, counsel urged that the correct approach, is to view litigation

as a necessity under an unjust former regime and not exclude the period

spent under litigation in such an unfair regime. He further urged that

the deeming provision with its clear and verifiable benchmarks on the

five-year cut-off period, physical possession and payment is easy to

operate. Introducing notions such as exclusion of time due to pending

litigation would complicate the working of the statute.

72. Learned counsel urged that Section 24(2) uses the expression “or”.

The Legislature intended the two conditions separated by the word “or”

to be alternative conditions. Four situations arise where the conditions

are disjunctive: firstly, when physical possession is with the State and

compensation is with the citizen, there is no deemed lapse; secondly,

when physical possession is with the citizen and compensation is with

the State, there is no need for restitution as the State has retained the

compensation amount; thirdly, when physical possession is with the
59

citizen, and the compensation is also with the citizen, in such scenarios,

the citizen must return the compensation. It was urged that where the

State has paid the money by deposit in the Reference Court and the

money was lying with the Court, the State may withdraw the money on

deemed lapsing. However, if the State were to decide to acquire the land

afresh, the compensation already paid may be adjusted; and further

since inherent in the notion of lapsing is the requirement for restitution,

the State can recover the compensation, inter alia by framing suitable

rules. The citizen cannot retain compensation “had and received” since

this would amount to unjust enrichment. It was submitted that where

the physical possession as well as compensation are with the State, i.e.,

where the State has taken possession without paying compensation as

required under the Act of 1894, there is no absolute vesting free from

all encumbrances as contemplated under Section 16. In the absence of

vesting, the State is required to restore possession to the citizen.

73. Learned counsel argued that having regard to the unfair working

of the Act of 1894, giving effect to the legislative intent by reading the

expression “or” as “or” is the correct interpretation with beneficent

consequences for the landowner. The learned counsel submitted that

reading the expression “or” as “and” not only does violence to the plain

language of section 24(2) but it also reduces the deeming provision

down to vanishing point. Should a conjunctive reading of the conditions

be combined with exclusion of the time spent in litigation or due to a
60

stay, then the whole of section 24(2) will be robbed of content since it

will apply to very rare cases. It was further submitted that Section 24

does not lay down any specific conditionality in terms of how far back

in time the awards contemplated under section 24(2) could have been

made. The deeming provision under Section 24(2) operates w.e.f.

1.1.2014 and its effect would cover all cases that fulfil the conditions

provided in the statute. Learned counsel cited decisions in support of

the interpretation that “or” should be construed disjunctively, not

conjunctively as “and”.60

74. Learned counsel stressed that there are no vested rights created

in the State in any case till compensation has been paid and possession

has been taken. The Act of 2013 is a beneficial legislation and a radical

departure from the previous unjust and oppressive regime. It intends to

confer significant benefits to the landowners and makes the exercise of

the power of eminent domain compatible with our constitutional values.

It ought to therefore be given an interpretation which favours the

landowners. Finally, he argued that the decision in Indore Development

Authority (supra) erroneously upset a consistent line of decisions which

began with Pune Municipal Corporation (supra). Subsequent decisions of

this Court following Pune Municipal Corporation (supra) have also

considered a host of arguments/issues and there is no compelling

60Naga People’s Movement of Human Rights vs. Union of India (1998) 2 SCC 109 (5 Judges);
R.S. Nayak v A.R. Antulay 1984 (2) SCC 183; and Life Insurance Corporation v D. J. Bahadur
1981 (1) SCC 315.

61

reason to make a departure. He submitted that even a larger Bench of

this Court is bound to pay due deference to the principle of Stare

Decisis.

75. Supplementing the submissions, Mr. Dinesh Dwivedi, learned

senior counsel for the landowners, argued that the meaning of the

phrase “compensation has not been paid” should be considered, given

that in Section 24(2) “paid” is not used. The phrase “has not been” is

used in respect of both “possession” as well as “paid”. Therefore, it must

mean the same in both respects. The important factors to be borne in

mind – and to distinguish the phrase “paid” from “deposit”, is whether

in the court under Section 31 (2) or in the treasury under Section 31(1).

It is urged that an analysis of Sections 17 (3A) & (3B), 31 (1) & (2) and

Section 28 read with Section 34 of the Act of 1894 shows that these

provisions clearly distinguish between tender, paid or deposit whether

in the court or the treasury.

76. Learned counsel argued that three different words used in the

same Act, in various provisions of the Act, cannot mean the same. It

follows also from the reading of Section 19(1)(c) and (cc). In both these

provisions word “tender” is used in contrast to word “paid” while word

paid is used in contrast to word “deposit”. The word “deposit”, wherever

used, is in the context of “deposit in Court” only not treasury. The

expression “tender payment” under Section 17 (3A) and Section 31(1) of

the Act of 1894 were followed by the words “pay it to them”. Therefore,
62

tender cannot mean “paid”. It is urged that these terms fall in Part V of

the Act, titled as “Payment”. The term “pay it to them” under Section 31

after “tender” must mean an additional action or step. When after

“tender” an effort is made “to pay” the compensation and the same is

accepted by the beneficiary, it becomes “paid”. The “deposit” under

Section 31(2) only comes in when the beneficiary declines payment.

This clearly implies that “tender of payment” cannot be equated with

“pay it to them” or “deposit in Court” under Section 31(1) and 31 (2). It is

argued that what follows is that tender of payment by itself is not

enough. The State’s interpretation is contested as incorrect because if

tender is equal to being paid then why does legislature provide for

“deposit in court”. The amount is deemed to be paid on tender and the

obligation to pay is discharged then the question is why require “deposit

in Court”. Learned counsel argued that “Tender” can never be deemed

as “paid”: This is not only evident from reading of Section 19(c) where

the term “paid or tendered” is depicted as alternates. Similarly, “paid or

deposited” are used alternately. Likewise, Sections 17(3)(b), 19(cc) and

34 use these words alternately. As said above if “tender” would amount

to “paid” and then the compensation would be deemed to be paid,

resulting in discharge of obligation to pay, then why deposit in court

under Section 31(2) to make it “custodia legis”. Section 31(2) would

become redundant in most of the cases.

63

77. Learned counsel conceded that there is no doubt that on a decline

of payment by the beneficiary it has to be mandatorily deposited in

Court under Section 31(2). The provision uses the phrase “shall deposit”

and this gives a valuable right to the payee, not only of interest in the

event it is not “deposited in court” but also a right to seek investment of

compensation under Section 33. These statutory rights are adversely

affected if “deposit” is not in “court”. Therefore, it is amply clear that

“deposit in treasury is not an option available. It cannot be a substitute

for “deposit in Court”. Besides Section 31(1) and 31 (2) of the Act of 1894

present a complete code for payment and there is no gap or uncovered

area to permit rules to supplement. Any deposit in treasury was in

breach of Section 31 and therefore, impermissible. Also, most of the

States had no rules under Section 55. In this context, executive

instructions cannot prevail over law. Law can never be interpreted with

the aid of subordinate legislation or executive instructions. It was

further submitted that Sections 17(3A) and (3B), 28, 31, 33 and 34 of

the Act of 1894 are a clear pointer that “tender” is not “paid” and neither

is “deposit”. Likewise, these provisions frequently use words “paid or

deposited” which shows they are different. Deposit cannot be, therefore,

equated with paid as they are more than once separated by word ‘or’.

78. It was contended that the scheme of the Act of 1894 was clear and

categorical that the amount of compensations when accepted by the

beneficiary is deemed to be “paid” for interest to stop running. The
64

running of interest under Section 34 denotes non-discharge of

obligation to pay, otherwise why pay interest? The “deposit in Court” may

stop running of interest and therefore, may for this purpose be taken to

be paid, but when it comes to actual meaning in the above provisions,

“paid and deposit” are invariably separated by the use of word “or” in

between them. Therefore, it is submitted that when Section 24(2) of the

New Act uses the phrase “compensation has not been paid” it uses the

terminology of the proviso to Section 34(proviso) and must have the

same meaning “has not been paid” cannot be read as “has not been

deposited”. If this is the right interpretation than the coverage of Section

24(2) also expands to cover those cases in which the compensation has

not been actually paid but has been deposited in the Court. This would

also be in keeping with the legislative policy contained in the Preamble,

to give just and fair compensation to those whose lands have been

acquired as per the Old Act. Coverage of the New Act is co-related to

persons whose “land has been acquired”. The policy of Section 24 also

reflects this expansive liberal approach of “just and fair compensation”.

Section 24 would therefore have to be seen in the light of this liberal

policy intent.

79. It was urged that these States’ arguments regarding revival of

claims or resulting in impossible situations causing irreparable harm

are not very relevant once the legislative policy is clear. The provision

has to be interpreted in a manner that it subserves the legislative policy
65

intent of giving just and fair compensation to those whose lands were

acquired (possession taken) under the Act of 1894. Once the legislative

policy or intent is clear then the objections relating to harsh

consequences are not really relevant. It was stated that State may be

put into a difficult situation, but the solution too is provided in the last

part of Section 24(2) which reflects the words “if it so chooses”, it can

acquire afresh under Section 24. Learned counsel relied on Padma

Sunder Rao (supra); Popat Bahiru Govardhane v. Land Acquisition

Officer61 and B. Premanand v. Mohan Koikal62. It was urged that the

legislative policy may cause hardship or difficulties to some or the State

may be put to an impossible situation; yet cannot take away from

Parliamentary intent. Parliament has enough wisdom to know these

difficulties, the law prevailing earlier or the ground realities. It would be

deemed to be not only aware of the difficulties, but also to have assessed

them while framing the liberalised policy. The question is one of intent.

The intent has to be seen primarily from the words used in the text. It

is only if such intent is not clear that courts have to see them with the

aid of the context. The difficulties as well as harsh consequences cannot

be utilized to assess the intent embedded in the provision if they are

clear, otherwise from the text, or the context. Not only has Parliament

not provided any clause creating any kind of exception, or extension of

five years in cases of litigating land oustees who may have an interim

61 2003 (10) SCC 765
62 (2011) 4 SCC 266
66

orders in their favour, stalling the acquisition or payment of

compensation. All that the provision says is “or compensation has not

been paid”. The projected policy intent is broad and unencumbered by

any exception. This is a clearest indicator of legislative intent to cover

all such cases that may cause hardship to the State or may be due to

the fault of Court or the litigious land oustee. The intent is clear and

therefore, has to be read apart from difficulties or hardships.

80. It is submitted that the State’s contention with regard to a

differential approach for possession and compensation is irrational and

is against the very grain of Section 24(2) and is also unreasonable and

discriminatory. It is unreasonable because there are hardly any cases

where compensation may have been paid, yet possession may not have

been taken. Most of the cases are under Section 17(1) where possession

is invariably taken while compensation remains unpaid as award is not

made. By reading word ‘or’ as ‘and’, the words “or the compensation has

not been paid” become otiose or redundant. Parliament could have only

said that lapsing would occur only if possession has not been taken,

because if possession is taken then there would never be lapsing and

there would be no need to consider “or” as “and”. Therefore, such an

interpretation (i.e., reading “or” conjunctively) is contrary to every rule

of interpretation and contrary to the Legislative policy indicated in the

Preamble of giving just and fair compensation in cases of earlier

acquisitions, which includes cases where possession has been taken.
67

81. Learned counsel urged that Section 24(2) would become

discriminatory if “or” is read as “and”. For this, it would be necessary to

analyse Section 24(1)(a). Section 24(1)(a) applies to a situation where

there is no award made till the commencement of the New Act. No award

primarily means “compensation has not been paid”. Importantly in a

case under Section 17 of the Act of 1894, which is most frequently

utilised, possession may be taken before award is made or

compensation is paid. In other words, Section 24(1)(a) does visualize or

cover cases where possession may have been taken but “compensation

has not been paid”. It, therefore, requires re-determination of

compensation under Sections 26-30 of the New Act. The problems of

who to pay the enhanced compensation, as referred above, would also

arise in this situation. Yet Parliament has ignored these difficulties and

provided for redetermination. Section 24(1)(a) may travel back to period

of five years or more, or may be 10-15 years as in case of Section 24(2).

It would not be reasonable to restrict the retrospectivity of Section

24(1)(a) with the aid of Section 11A of the old Act, to 2 years before

commencement. It would be incorrect because then one would be

ignoring Explanation to Section 11A (proviso). The said Explanation

visualises indefinite extension of the period of award from 2 years. It

would not be, therefore, reasonable to exclude such cases where though

possession may have been taken, but compensation may not have been

paid for a very long period of time upto commencement of the new Act.

Section 24(1)(a) does not contain any provision like Section 25 (proviso),
68

Section 19(7)(proviso) and Section 69(2)(explanation) and therefore, is

wide in its coverage in the absence of exceptions as above.

82. Learned counsel urged that Section 24(2) is a special provision

giving higher benefit because in the cases covered by Section 24(2)

“compensation has not been paid” despite award. Would it be rational

to read Section 24(2) in such a manner that deprives it of its value and

worth and makes it ineffective. Section 24(2) would become ineffective

as a whole because there would be rarest of the rare cases, where both

the conditions would be fulfilled. The experience shows in vast majority

of cases of acquisition under the old Act, possession is taken while

award & compensation come much later. This is because Sections 9 &

17(6) of the Act of 1894 were used in vast majority of acquisitions and

the Legislature was aware of it. The law does not compel doing of an act

that is impossible. It is emphasized that the principle does not apply as

the new Act is not requiring any such performance. The new Act after

recognising the past, is providing new solutions, rights and benefits.

Section 24(2) by itself does not compel performance of an impossible

act. This principle could have been relevant during earlier Act but is

hardly relevant for interpreting the scope of Section 24(2) of the New

Act. Section 24 clearly postulates that even though the Act may be

impossible of performance, or results in undue advantage to the

beneficiary despite his fault in declining, yet benefit of Section 24(2) may

be given without creating any exception. There is no constitutional
69

restriction on the Legislature that such cases or situations have to be

excluded. The legislature can provide benefit in the same manner to all,

difficulties apart. Reliance is placed on certain decisions in support of

this proposition.63 Therefore, such interpretation which excludes the

benefits under Section 24(2) by resorting to such arguments of

difficulties is meaningless. The giving of benefit to all by ignoring above

circumstance is neither illegal nor unjust. It is neither anomalous nor

absurd. It is urged that what the court feels is not important; what is

relevant is the view of the legislature, to be culled out from the reading

of only the text or the context; not in any other manner. For this rule,

reliance was placed on Mohd. Kavi v. Fatmabal Ibrahim64 and other

decisions.

83. Other learned senior counsel, i.e M/s Dushyant Dave, Gopal

Shankarnarayan, Siddharth Luthra, Nakul Dewan, Manoj Swaroop,

Anukul Chandra Pradhan supplemented the submissions of Mr. Divan

and Mr. Dwivedi. It was argued by them that this Court should not

depart from the rule of literal interpretation, because that would be both

beneficial and purposive, given the oppressive nature of the Act of 1894.

In this context, it was submitted that the expressions “paid” and “or”

should be construed in the manner that Parliament intended, having

63 Martin Burn Ltd v Corporation of Calcutta 1966 (1) SCR 543; Commissioner of Agricultural
Income Tax v Keshab Chandra Mandal 1950 SCR 435; and State of Maharastra v Nanded
Parbhani Sangh 2000 (2) SCC 69.

64 1997 (6) SCC 71 and M.V. Javali v Mahajan Borewell & Co. Ltd 1997 (8) SCC 72; and

Nanded Parbhani Sangh (supra); and SMS Pharmaceuticals Ltd. v. Neeta Bhalla (2005) 8 SCC

89.
70

regard to the overall intent of ensuring the acquisition proceedings,

where either compensation was not paid, or possession was not taken,

in respect of awards made before 1.1.2009, should lapse. It was

submitted that there is no insurmountable difficulty or impossibility,

even if possession is taken (but compensation not paid) and even if

vesting occurs, Section 24(2) of the new Act expressly provides for

lapsing. The remedy in that case, for the appropriate Government is the

option of going through the acquisition again using emergency

provisions. In that event, the authorities would have to provide for

rehabilitation and enhanced compensation. In any case, the court

always has the option in such cases where third party rights have

ensued to do complete justice, by duly compensating those whose land

is acquired, without disturbing the possession of third party who has

been given the land.

84. The learned counsel submit that this Court should base itself on

the approach to interpret Section 24 of the Act of 2013 is that it is a

savings clause with an exclusionary deeming provision. It is urged that

the words “physical possession” under Section 24(2) should be read to

reflect the actual state of affairs as on the date when the Act of 2013

came into force, i.e., there was actual physical possession of the land.

This would also be the case in relation to the term “compensation not

paid” under Section 24(2), where compensation would either have had

to be paid or deposited in court; and that use of the term “or” signifies
71

that the two conditions set out above are disjunctive. It is argued that

Section 114 consists of two sections (1) a repeal clause set out in Section

114 (1); and (2) a savings clause set out in Section 114(2). It is

contended that there is a distinction in the manner in which a repealing

clause is construed as compared to the manner in which a savings

clause is construed. While a repealing clause, followed by a new

legislation on the same subject-matter would result in a line of enquiry

about what rights are obliterated under the old Act by the new Act, a

savings clause would be construed in a manner that resurrects a

provision, which would otherwise be obliterated on account of the

repeal. In relation to a repeal clause, the effect of obliterating the

provisions of the previous enactment would be as if it never existed,

except for vested rights, which would be protected under Section 6 of

the General Clauses Act. Section 6 of the General Clauses Act, thus

operated as a savings clause. Learned counsel rely on the judgment of

this court in State of Punjab v. Mohar Singh65 that the effect of repealing

a statute was said to be to obliterate it as completely from the records

of Parliament as if it had never been passed, except for the purpose of

those actions, which were commenced, prosecuted and concluded while

it was an existing law and that:

“A repeal therefore without any saving Clause would destroy any
proceeding whether not vet begun or whether pending at the time
of the enactment of the Repealing Act and not already prosecuted
to a final judgment so as to create a vested right”.

65 (1955) 1 SCR 893
72

85. Submitting that the effect of Section 6 of the General Clauses Act,

is that unless the contrary intention appears, the repeal does not affect

the previous operation of the repealed enactment or anything duly done

or suffered under it and any investigation, legal proceeding or remedy

may be instituted, continued or enforced in respect of any right, liability

and penalty under the repealed Act as if the Repealing Act had not been

passed. However, in case of the Act of 2013, it is urged that

Parliamentary intent was not to simply let Section 6 of the General

Clauses Act operate as the savings provision. Apart from Section 6, the

intent, evident from Section 114(2), was to set out a specific provision

which would save proceedings. It was submitted that those would be

provisions that would otherwise not have been saved by the General

Clauses Act.

86. It is in this background that Section 24 of the Act of 2013 must

be interpreted. While the Respondent accepts that Section 24 could

have been more clearly worded to reflect the legislative intent as a

savings provision, to fully appreciate the operation of Section 24 (1)(b)

as a classical savings provision which saves proceedings under the Act

of 1894 if an award had been made under Section 11, in a manner as

if the Act of 1894 had not been repealed. Section 24(1)(a) deals with a

situation where no award has been made and in providing for

determination of compensation in terms of the Act of 2013 naturally

would mean that proceedings under the Act of 1894 would be revived,
73

save and except on the issue of computation of compensation. Having

revived proceedings under Section 24(1), Section 24(2) provides for a

deemed lapsing through a non-obstante provision for an award made

five years or prior to the date of the commencement of the Act of 2013.

This creates a legal fiction which, as held by this court in J.K.Cotton

Spg. & Wvg.Mils Ltd. v. Union of India,66 is:

“…an admission of the non-existence of the fact deemed…The
legislature is quite competent to enact a deeming provision for the
purpose of assuming the existence of a fact which does not really
exist.”

Learned counsel also placed reliance on the decision of the

Constitution Bench in Bengal Immunity Co.Ltd. v. State of Bihar67 to the

following effect:

“[l]egal fictions are created only for some definite purpose”and
referred to the decision East End Dwellings Co.Ltd.v. Finsbury
Borough Council,1952 AC 109 at paragraph 71,which reads as
follows:

“if you are bidden to treat an imaginary state of affairs as
real,you must surely, unless prohibited from doing so,also
imagine as real the consequences and incidents which,if the
putative state of affairs had in fact existed,must inevitably
have flowed from or accompanied it.One of these in this case
is emancipation from the 1939 level of rents.The statute says
that you must imagine a certain state of affairs;it does not say
that having done so,you must cause or permit your
imagination to boggle when it comes to the inevitable
corollaries of that state of affairs.”” (Emphasis Supplied)

87. Other decisions of this Court were also relied on, in this context.68

Learned counsel stated that given that it is a legal fiction which leads to

a deemed lapsing of proceedings under the Act of 1894, Parliamentary

intent under Section 24(2) ought to be construed so that “physical

66 1987 Supp SCC 350
67 (1955)2 SCR 603
68 MIG Cricket Club v.AbhinavSahakar Education Society, (2011) 9 SCC 97
74

possession” under Section 24(2) reflects the actual state of affairs as on

the date when the Act of 2013 came into force; similarly, too the term

compensation not paid under Section 24(2). It was stated, that retaining

amounts in the treasury, pursuant to executive rules would not suffice

for compliance with the payment condition. Learned counsel also urged

that this court should interpret “or” as signifying a disjunctive reading

of the two conditions. Comparing this legal fiction created under Section

24(2) with the State’s obligations under the Act of 1894 would be

inconsistent with the decisions of this Court, under which legal fictions

are to be read as it is i.e., the state of affairs as plainly set out in the

legal fiction. Therefore, the effect of Section 24 (2) is that if either of the

situations are not met, the acquisition proceedings under the Act of

1894 lapse and the State can initiate proceedings afresh in accordance

with the Act of 2013. This construction, urge learned counsel is also

purposive and practical. If the State has not taken physical possession

of a property even if compensation has been paid for over 5 years prior

to the commencement of the Act of 2013, because it no longer serves

the purpose of acquisition, it can drop the proceedings as those would

have lapsed. In such an event, the State would naturally be entitled to

restitutory recovery. However, if the State has failed to take physical

possession, it cannot be benefited by its inactions and must restart

proceedings under the Act of 2013. In such a case, the compensation

paid can always be re-adjusted against compensation determined under

the Act of 2013. Arguendo, it is urged that even if Section 114 (2) of the
75

Act of 2013 is construed to keep alive the State’s vested rights by virtue

of Section 6 of the General Clauses Act, such rights are limited by

Section 24(1)(a) and Section 24(2) of the Act of 2013. Thus, while

ordinarily the acquisition proceedings that were pending in respect of

awards passed under the Act of 1894 would have continued, the

legislature by way of a creating a legal fiction, provided for the deemed

lapse of these proceedings in respect of which physical possession has

not been taken or compensation not paid. Learned counsel placed

reliance on some decisions of this Court.69 VKNM Vocational Higher

Secondary School v. State of Kerala,70 where it was held that:

“…a vested right can also be taken away by a subsequent
enactment if such subsequent enactment specifically provides by
express words or by necessary intendment. In other words, in the
event of the extinction of any such right by express provision in
the subsequent enactment, the same would lose its value.”

88. It was submitted that in order to determine the accrued rights and

incurred liabilities that have been saved under the Act of 1894, the line

of inquiry is not to enquire if the new enactment has by its new

provisions kept alive the rights and liabilities under the repealed law,

but whether it has taken away those rights and liabilities.

89. All learned counsel supported the submission that the proviso is

not restricted in its operation to Section 24 (2) only and that its

placement is not determinative. It was emphasized that the proviso does

69 Jayantilal Amrathlal v. Union of India,(1972) 4 SCC 174, T.S.Baliah v. Income Tax Officer,
Central Circle VI,Madras
,1969 (3) SCR 65
70 2016 (4) SCC 216.

76

not say that higher compensation would be paid, in the contingency

provided by it, as an option to avoid lapsing. The absence of any

reference to lapsing, or the ingredients of Section 24 (2) clearly meant

that the benefit of higher compensation in the event a majority of the

landowners were not paid compensation (under the old Act) was to

enure to all falling in the same class, i.e., those whose lands were

subjected to acquisition, whether five years prior to or less than coming

into force of the Act of 2013.

Relevant provisions

90. For appreciating the controversy in the present cases, it is

essential to extract certain relevant provisions of the Act of 1894 as well

as the Act of 2013. The provisions of the Act of 1894 are reproduced

below:

“12 Award of Collector when to be final.

(1) Such award shall be filed in the Collector’s office and shall,
except as hereinafter provided, be final and conclusive evidence,
as between the Collector and the persons interested, whether
they have respectively appeared before the Collector or not, of the
true area and value of the land, and apportionment of the
compensation among the persons interested.

(2) The Collector shall give immediate notice of his award to such
of the persons interested as are not present personally or by their
representatives when the award is made.

*** ***
“17. Special powers in case of urgency. – (1) In cases of
urgency, whenever the appropriate Government, so directs, the
Collector, though no such award has been made, may, on the
expiration of fifteen days from the publication of the notice
mentioned in section 9, sub-section (1), take possession of any
land needed for a public purpose. Such land shall thereupon vest
absolutely in the Government, free from all encumbrances.

[(3A) Before taking possession of any land under sub-section (1)
or sub-section (2), the Collector shall, without prejudice to the
provisions of sub-section (3)-

77

(a) tender payment of eighty per centum of the compensation for
such land as estimated by him to the persons interested
entitled thereto, and

(b) pay it to them, unless prevented by some one or more of the
contingencies mentioned in section 31, sub-section (2),
and where the Collector is so prevented, the provisions of section
31
, sub-section (2) (except the second proviso thereto), shall apply
as they apply to the payment of compensation under that section.

(4) In the case of any land to which, in the opinion of the
[appropriate Government], the provisions of sub-section (1) or sub-
section (2) are applicable, the appropriate Government may direct
that the provisions of section 5A shall not apply, and, if it does so
direct, a declaration may be made under section 6 in respect of
the land at any time after the date of the publication of the
notification under section 4, sub-section (1).]”

16. Power to take possession.—When the Collector has made
an award under section 11, he may take possession of the land,
which shall thereupon vest absolutely in the Government, free
from all encumbrances.

*** ***

31. Payment of compensation or deposit of same in Court.

– (1) On making an award under section 11, the Collector shall
tender payment of the compensation awarded by him to the
persons interested entitled thereto according to the award, and
shall pay it to them unless prevented by some one or more of the
contingencies mentioned in the next sub-section.

(2) If they shall not consent to receive it, or if there be no person
competent to alienate the land, or if there be any dispute as to the
title to receive the compensation or as to the apportionment of it,
the Collector shall deposit the amount of the compensation in the
Court to which a reference under section 18 would be submitted:

Provided that any person admitted to be interested may receive
such payment under protest as to the sufficiency of the amount:

Provided also that no person who has received the amount
otherwise than under protest shall be entitled to make any
application under section 18:

Provided also that nothing herein contained shall affect the
liability of any person, who may receive the whole or any part of
any compensation awarded under this Act, to pay the same to
the person lawfully entitled thereto.

(3) Notwithstanding anything in this section, the Collector may,
with the sanction of the appropriate Government instead of
awarding a money compensation in respect of any land, make
any arrangement with a person having a limited interest in such
land, either by the grant of other lands in exchange, the remission
of land revenue on other lands held under the same title or in
such other way as may be equitable having regard to the
interests of the parties concerned.

78

(4) Nothing in the last foregoing sub-section shall be construed to
interfere with or limit the power of the Collector to enter into any
arrangement with any person interested in the land and
competent to contract in respect thereof.”
*** ***
34 Payment of interest

When the amount of such compensation is not paid or deposited
on or before taking possession of the land, the Collector shall pay
the amount awarded with interest thereon at the rate of 72 [nine
per centum] per annum from the time of so taking possession until
it shall have been so paid or deposited:

Provided that if such compensation or any part thereof is not paid
or deposited within a period of one year from the date on which
possession is taken, interest at the rate of fifteen per centum per
annum shall be payable from the date of expiry of the said period
of one year on the amount of compensation or part thereof which
has not been paid or deposited before the date of such expiry.”

The relevant provisions of the Act of 2013 are as follows:

“24. Land acquisition process under Act No. 1 of 1984
shall be deemed to have lapsed in certain cases.

(1) Notwithstanding anything contained in this Act, in any case
of land acquisition proceedings initiated under the Land
Acquisition Act
, 1894,–

(a) where no award under section 11 of the said Land
Acquisition Act has been made, then, all provisions of this Act
relating to the determination of compensation shall apply; or

(b) where an award under said section 11 has been made, then
such proceedings shall continue under the provisions of the said
Land Acquisition Act, as if the said Act has not been repealed.
(2) Notwithstanding anything contained in sub-section (1),
in case of land acquisition proceedings initiated under the Land
Acquisition Act
, 1894 (1 of 1894), where an award under the said
section 11 has been made five years or more prior to the
commencement of this Act but the physical possession of the land
has not been taken or the compensation has not been paid the
said proceedings shall be deemed to have lapsed and the
appropriate Government, if it so chooses, shall initiate the
proceedings of such land acquisition afresh in accordance with
the provisions of this Act:

Provided that where an award has been made and
compensation in respect of a majority of land holdings has not
been deposited in the account of the beneficiaries, then, all
beneficiaries specified in the notification for acquisition under
section 4 of the said Land Acquisition Act, shall be entitled to
compensation in accordance with the provisions of this Act.”
*** ***

114. Repeal and saving.–(1) The Land Acquisition Act, LA (1 of
LA), is hereby repealed.

79

(2) Save as otherwise provided in this Act the repeal under sub-
section (1) shall not be held to prejudice or affect the general
application of section 6 of the General Clauses Act, 1897 (10 of
1897) with regard to the effect of repeals.”

Section 6 of the General Clauses Act, 1897 reads as follows:

“Section 6 – Effect of repeal
Where this Act, or any Central Act or Regulation made after the
commencement of this Act, repeals any enactment hitherto made
or hereafter to be made, then, unless a different intention
appears, the repeal shall not—

(a) revive anything not in force or existing at the time at which the
repeal takes effect; or

(b) affect the previous operation of any enactment so repealed or
anything duly done or suffered thereunder; or

(c) affect any right, privilege, obligation or liability acquired,
accrued or incurred under any enactment so repealed; or

(d) affect any penalty, forfeiture or punishment incurred in respect
of any offence committed against any enactment so repealed; or

(e) affect any investigation, legal proceeding or remedy in respect
of any such right, privilege, obligation, liability, penalty, forfeiture
or punishment as aforesaid;

and any such investigation, legal proceeding or remedy may be
instituted, continued or enforced, and any such penalty, forfeiture
or punishment may be imposed as if the repealing Act or
Regulation had not been passed.”

Salient features of the Act of 2013

91. There can no dispute, no two opinions about the fact that

provisions of the Act of 2013, were enacted with the object of providing

fair compensation and rehabilitating those displaced from their land.

The Introduction and Statement of Objects and Reasons of the Act of

2013 are extracted hereunder:

“INTRODUCTION
The Land Acquisition Act, LA was a general law relating to
acquisition of land for public purposes and also for companies
and for determining the amount of compensation to be made on
account of such acquisition. The provisions of the said Act was
found to be inadequate in addressing certain issues related to the
80

exercise of the statutory powers of the State for involuntary
acquisition of private land and property. The Act did not address
the issues of rehabilitation and resettlement to the affected
persons and their families. There had been multiple amendments
to the Land Acquisition Act, LA not only by the Central
Government but by the State Governments as well. However,
there was growing public concern on land acquisition, especially
multi-cropped irrigated land. There was no central law to
adequately deal with the issues of rehabilitation and
resettlement of displaced persons. As land acquisition and
rehabilitation and resettlement were two sides of the same coin,
a single integrated law to deal with the issues of land acquisition
and rehabilitation and resettlement was necessary.

The Right to Fair Compensation and Transparency in Land
Acquisition, Rehabilitation and Resettlement Act, 2013
addresses concerns of farmers and those whose livelihood are
dependent on the land being acquired, while at the same time
facilitating land acquisition for industrialization, infrastructure
and urbanization projects in a timely and transparent manner.

This Act represents a change in the legislative approach to
land acquisition. It introduces for the first time provisions for
social impact analysis, recognizes non-owners as affected
persons, a mode of acquisition requiring consent of the displaced
and statutory entitlements for resettlement. In addition, it has
restricted the grounds on which land may be acquired under the
urgency clause.

STATEMENT OF OBJECTS AND REASONS
The Land Acquisition Act, LA is the general law relating to
acquisition of land for public purposes and also for companies
and for determining the amount of compensation to be made on
account of such acquisition. The provisions of the said Act have
been found to be inadequate in addressing certain issues related
to the exercise of the statutory powers of the State for involuntary
acquisition of private land and property. The Act does not
address the issues of rehabilitation and resettlement to the
affected persons and their families.

2. The definition of the expression “public purpose” as given in the
Act is very wide. It has, therefore, become necessary to re-define
it so as to restrict its scope for acquisition of land for strategic
purposes vital to the State, and for infrastructure projects where
the benefits accrue to the general public. The provisions of the Act
are also used for acquiring private lands for companies. This
frequently raises a question mark on the desirability of such State
intervention when land could be arranged by the company
through private negotiations on a “willing seller-willing buyer”
basis, which could be seen to be a more fair arrangement from
the point of view of the land owner. In order to streamline the
provisions of the Act causing less hardships to the owners of the
81

land and other persons dependent upon such land, it is proposed
repeal the Land Acquisition Act, LA and to replace it with
adequate provisions for rehabilitation and resettlement for the
affected persons and their families.

3. There have been multiple amendments to the Land Acquisition
Act
, LA not only by the Central Government but by the State
Governments as well. Further, there has been heightened public
concern on land acquisition, especially multi-cropped irrigated
land and there is no central law to adequately deal with the
issues of rehabilitation and resettlement of displaced persons. As
land acquisition and rehabilitation and resettlement need to be
seen as two sides of the same coin, a single integrated law to
deal with the issues of land acquisition and rehabilitation and
resettlement has become necessary. Hence the proposed
legislation proposes to address concerns of farmers and those
whose livelihoods are dependent on the land being acquired,
while at the same time facilitating land acquisition for
industrialization, infrastructure and urbanization projects in a
timely and transparent manner.

4. Earlier, the Land Acquisition (Amendment) Bill, 2007 and
Rehabilitation and Resettlement Bill, 2007 were introduced in the
Lok Sabha on 6th December 2007 and were referred to the
Parliamentary Standing Committee on Rural Development for
Examination and Report. The Standing Committee presented its
reports (the 39th and 40th Reports) to the Lok Sabha on 21st
October 2008 and laid the same in the Rajya Sabha on the same
day. Based on the recommendations of the Standing Committee
and as a consequence thereof, official amendments to the Bills
were proposed. The Bills, along with the official amendments,
were passed by the Lok Sabha on 25th February 2009, but the
same lapsed with the dissolution of the 14th Lok Sabha.

5. It is now proposed to have a unified legislation dealing with
acquisition of land, provide for just and fair compensation and
make adequate provisions for rehabilitation and resettlement
mechanism for the affected persons and their families. The Bill
thus provides for repealing and replacing the Land Acquisition
Act
, LA with broad provisions for adequate rehabilitation and
resettlement mechanism for the project affected persons and their
families.

6. Provision of public facilities or infrastructure often requires the
exercise of powers by the State for acquisition of private property
leading to displacement of people, depriving them of their land,
livelihood, and shelter, restricting their access to traditional
resource base and uprooting them from their socio-cultural
environment. These have traumatic, psychological, and socio-
cultural consequences on the affected population, which call for
protecting their rights, particularly in case of the weaker sections
82

of the society, including members of the Scheduled Castes (SCs),
the Scheduled Tribes (STs), marginal farmers and their families.

7. There is an imperative need to recognise rehabilitation and
resettlement issues as intrinsic to the development process
formulated with the active participation of affected persons and
families. Additional benefits beyond monetary compensation
have to be provided to families affected adversely by involuntary
displacement. The plight of those who do not have rights over the
land on which they are critically dependent for their subsistence
is even worse. This calls for a broader concerted effort on the part
of the planners to include in the displacement, rehabilitation, and
resettlement process framework, not only for those who directly
lose their land and other assets but also for all those who are
affected by such acquisition. The displacement process often
poses problems that make it difficult for the affected persons to
continue their traditional livelihood activities after resettlement.
This requires a careful assessment of the economic
disadvantages and the social impact arising out of displacement.
There must also be holistic effort aimed at improving the all-round
living standards of the affected persons and families.

8. A National Policy on Resettlement and Rehabilitation for Project
Affected Families was formulated in 2003, which came into force
with effect from February 2004. Experience gained in
implementation of this policy indicates that there are many issues
addressed by the policy which need to be reviewed. There should
be a clear perception, through a careful quantification of the costs
and benefits that will accrue to society at large, of the desirability
and justifiability of each project. The adverse impact on affected
families-economic, environmental, social and cultural-must be
assessed in participatory and transparent manner. A national
rehabilitation and resettlement framework thus needs to apply to
all projects where involuntary displacement takes place.

9. The National Rehabilitation and Resettlement Policy, 2007, has
been formulated on these lines to replace the National Policy on
Resettlement and Rehabilitation for Project Affected Families,
2003. The new policy has been notified in the Official Gazette and
has become operative with effect from the 31st October, 2007.
Many State Governments have their own Rehabilitation and
Resettlement Policies. Many Public Sector Undertakings or
agencies also have their own policies in this regard.

10. The law would apply when Government acquires land for its
own use, hold and control, or with the ultimate purpose to
transfer it for the use of private companies for stated public
purpose or for immediate and declared use by private companies
for public purpose. Only rehabilitation and resettlement
provisions will apply when private companies buy land for a
project, more than 100 acres in rural areas, or more than 50 acres
in urban areas. The land acquisition provisions would apply to
83

the area to be acquired but the rehabilitation and resettlement
provisions will apply to the entire project area even when private
company approaches Government for partial acquisition for
public purpose.

11. “Public purpose” has been comprehensively defined, so that
Government intervention in acquisition is limited to defence,
certain development projects only. It has also been ensured that
consent of at least 80 per cent of the project affected families is
to be obtained through a prior informed process. Acquisition
under urgency clause has also been limited for the purposes of
national defence, security purposes, and Rehabilitation and
Resettlement needs in the event of emergencies or natural
calamities only.

12. To ensure food security, multi-crop irrigated land shall be
acquired only as a last resort measure. An equivalent area of
culturable wasteland shall be developed if multi-crop land is
acquired. In districts where net sown area is less than 50 per
cent of total geographical area, no more than 10 per cent of the
net sown area of the district will be acquired.

13. To ensure comprehensive compensation package for the land
owners, a scientific method for calculation of the market value of
the land has been proposed. Market value calculated will be
multiplied by a factor of two in the rural areas. Solatium will also
be increased upto 100 per cent of the total compensation. Where
land is acquired for urbanization, 20 per cent of the developed
land will be offered to the affected land owners.

14. Comprehensive rehabilitation and resettlement package for
land owners including subsistence allowance, jobs, house, one
acre of land in cases of irrigation projects, transportation
allowance, and resettlement allowance is proposed.

15. Comprehensive rehabilitation and resettlement package for
livelihood losers, including subsistence allowance, jobs, house,
transportation allowance, and resettlement allowance is
proposed.

16. Special provisions for Scheduled Castes and the Scheduled
Tribes have been envisaged by providing additional benefits of
2.5 acres of land or extent of land lost to each affected family;
one-time financial assistance of Rs. 50,000/-; twenty-five per
cent additional rehabilitation and resettlement benefits for the
families settled outside the district; free land for community and
social gathering and continuation of reservation in the
resettlement area, etc.

17. Twenty-five infrastructural amenities are proposed to be
provided in the resettlement area including schools and play
grounds, health centres, roads, and electric connections, assured
84

sources of safe drinking water, Panchayat Ghars, Anganwadis,
places of worship, burial and cremation grounds, village level
post offices, fair price shops, and seed-cum-fertilizers storage
facilities.

18. The benefits under the new law would be available in all the
cases of land acquisition under the Land Acquisition Act, LA,
where award has not been made, or possession of land has not
been taken.

19. Land that is not used within ten years in accordance with the
purposes, for which it was acquired, shall be transferred to the
State Government’s Land Bank. Upon every transfer of land
without development, twenty per cent of the appreciated land
value shall be shared with the original land owners.

20. The provisions of the Bill have been made fully compliant with
other laws such as the Panchayats (Extension to the Scheduled
Areas) Act, 1996; the Scheduled Tribes and Other Traditional
Forest Dwellers (Recognition of Forest Rights) Act
, 2006 and Land
Transfer Regulations in Fifth Scheduled Areas.

21. Stringent and comprehensive penalties both for the
companies and Government in cases of false information, mala
fide action, and contravention of the provisions of the propose
legislation have been provided.

22. Certain Central Acts dealing with the land acquisition have
been enlisted in the Bill. The provisions of the Bill are in addition
to and not in derogation of these Acts. The provisions of this Act
can be applied to these existing enactments by a notification of
the Central Government.

23. The Bill also provides for the basic minimum requirements
that all projects leading to displacement must address. It contains
a saving clause to enable the State Governments, to continue to
provide or put in place greater benefit levels than those prescribed
under the Bill.

24. The Bill would provide for the basic minimum that all projects
leading to displacement must address. A Social Impact
Assessment (SIA) of proposals leading to displacement of people
through a participatory, informed and transparent process
involving all stake-holders, including the affected persons will be
necessary before these are acted upon. The rehabilitation process
would augment income levels and enrich quality of life of the
displaced persons, covering rebuilding socio-cultural
relationships, capacity building, and provision of public health
and community services. Adequate safeguards have been
proposed for protecting rights of vulnerable sections of the
displaced persons.

85

25. The Bill seeks to achieve the above objects. The notes on
clauses explain the various provisions contained in the Bill.”

92. Section 2(2) of the Act of 2013, provides that in the event of

acquisition for private companies, consent of 80% of the affected

families has to be obtained and for the public-private partnerships,

consent of 70% of the affected families is required to be taken. In

Section 3(c), the term ‘affected family’ has been widened, which inter

alia includes members of the Schedule Tribes, forest dwellers, and

families whose livelihood is dependent on forests or water bodies. A

“Social Impact Assessment” (“SIA”) has to be prepared, as provided in

Sections 4 to 9. Special provisions to safeguard food security have been

made by prohibiting the acquisition of multi-cropped land except in

exceptional circumstances as enumerated in Section 10. Section 11 is

akin to Section 4 of the Act of 1894 regarding issuance of preliminary

notification. The SIA report lapses in case preliminary notification

under Section 11 is not issued within a period of 12 months from the

date of the report. A Rehabilitation and Resettlement Scheme (“RR

Scheme”) is provided in Sections 16 to 18. The Collector has to pass

the award under Section 23. Section 26 deals with the determination of

the market value by the Collector. Section 30 provides for Solatium at

100%. The RR award has to be passed by the Collector under Section

31, and notice has to be given immediately under Section 37, which is

equivalent to Section 12 of the Act of 1894. Section 38 provides that

Collector has to take possession after full payment of compensation has
86

been made as well as rehabilitation and resettlement entitlements are

paid or tendered to the entitled persons. Thus, there is a departure

from Section 16 Act of 1894 in the provisions contained in Section 38

of the Act of 2013. The Collector has to ensure under Section 38 of Act

of 2013 that the rehabilitation and resettlement process is complete

before displacing people. Section 40 deals with urgent cases. The

Government may acquire land without making award in the case of

urgency for the defence of India or national security. In other

emergencies arising out of natural calamities or any other emergencies

special provisions under Section 40 may be exercised with the approval

of the Parliament. In such event, the provisions of the Social Impact

Assessment and Rehabilitation and Resettlement Scheme may be

exempted. Additional compensation of 75% is payable in such cases.

Section 41 contains special provisions for Scheduled Castes and

Scheduled Tribes by prohibiting acquisition in scheduled areas as far

as possible. Sections 43 to 50 deal with appointment and constitution

of the Rehabilitation and Resettlement Authorities and Monitoring

Committees at Project as well as National Levels. Sections 51 to 74 deal

with the establishment of Land Acquisition, Rehabilitation, and

Resettlement Authority. Sections 77 to 80 are pari materia to the

provisions contained in Sections 31 to 34 of the Act of 1894, relating to

payment, deposit, and interest, etc. Section 93 is equivalent to Section

48 of the Land Acquisition Act. The Government shall be at liberty to

withdraw from acquisition if possession of land has not been taken.
87

Section 101 provides that land be returned to the original owner or the

Land Bank of the appropriate Government if acquired land remains

unutilized for a period of five years. Thus, various departures have been

made from the old Land Acquisition Act, in the Act of 2013 relating to

Social Impact Assessment, Rehabilitation and Resettlement Scheme,

etc. It ensures higher compensation than the old Act; the public

purpose has been defined; consent provisions have also been made.

The interest of Scheduled Castes and Scheduled Tribes have been

adequately protected. Various Committees and Authorities have been

constituted. The definition of ‘affected families’ has been widened.

93. Undoubtedly the Act of 2013 has provided safeguards, in the form

of higher compensation and provisions for rehabilitation, which are

necessary. In that light, the court has to interpret its provisions, to give

full and meaningful effect to the legislative intent keeping in mind the

language and tenor of the provisions, it is not for the court to legislate.

The Court can only iron out creases to clear ambiguity. The intended

benefit should not be taken away. At the same time, since the Act of

2013, envisages lapse of acquisitions notified (and in many cases,

completed by the issuance of the award) due to indolence and inaction

on the part of the authorities and therefore, intends acquisition at a fast

track, the full effect has to be given to the provisions contained in

Section 24.

Scope of Section 24
88

94. Section 24 begins with a non-obstante clause, overriding all other

provisions of the Act of 2013 including Section 114 of the Act of 2013,

dealing with repeal and saving. In terms of Section 114 of the Act of

2013, the general application of Section 6 of the General Clauses Act,

1897, except otherwise provided in the Act, has been saved. Section

6(a) of the General Clauses Act, 1897 provides that unless a different

intention appears, the repeal shall not revive anything not in force or

existing at the time when the repeal has been made. The effect of the

previous operation of any enactment so repealed or anything duly done

or suffered thereunder is also saved by the provisions contained in

Section 6(b). As per Section 6(c), the repeal shall not affect any right,

privilege, obligation or liability acquired, accrued, or incurred.

95. Section 24(1)(a) of the Act of 2013 read with the non-obstante

clause provides that in case of proceedings initiated under the Act of

1894 the award had not been made under Section 11, then the

provisions of the Act of 2013, relating to the determination of

compensation would apply. However; the proceedings held earlier do

not lapse. In terms of Section 24(1)(b), where award under Section 11

is made, then such proceedings shall continue under the provisions of

the Act of 1894. It contemplates that such pending proceedings, as on

the date on which the Act of 2013 came into force shall continue, and

taken to their logical end. However, the exception to Section 24 (1)(b) is

provided in Section 24(2) in case of pending proceedings; in case where
89

the award has been passed five years or more prior to the

commencement of the Act of 2013, the physical possession of the land

has not been taken, or the compensation has not been paid, the

proceedings shall be deemed to have lapsed, and such proceedings

cannot continue as per the provisions of Section 24(1)(b) of the Act of

2013.

96. Section 24(2) carves out an exception to Section 24(1)(b), where

the award has been passed, and the proceedings are pending, but in

such proceedings, physical possession of the land has not been taken,

or compensation has not been paid, proceedings shall lapse. There are

twin requirements for the lapse; firstly, physical possession has not

been taken and, secondly, compensation has not been paid. In case,

possession has been taken but compensation has been paid, there is no

lapse of the proceedings. The question which is to be decided is whether

the conditions are cumulative, i.e both are to be fulfilled, for lapsing of

acquisition proceedings, or the conditions are in the alternative

(“either/or”). According to the State and acquiring agencies, in a

situation where possession has been taken, and compensation is not

paid, there is no lapse: also in case where compensation has been paid,

but possession not taken in a proceeding pending as on 1.1.2014, there

is no lapse. Sine qua non is that proceeding must be pending. They

argue that the word “or” used in phrase ‘the physical possession of the

land has been not taken, or the compensation has not been paid’, has
90

to be interpreted as “and” as two negative requirements qualify it.

Furthermore, argues the State when two negative conditions are

connected by “or,” they are construed as cumulative, the word “or” is to

be read as “nor” or “and.” Naturally, the landowners argue to the

contrary, i.e., that lapse of acquisition occurred if compensation were

not paid, or possession were not taken, 5 years before the coming into

force of the Act of 2013.

97. It would be useful to notice rules of Statutory Interpretation in

this regard. Principles of Statutory Interpretation (14th Edition) by Justice

G.P. Singh, speaks of the following general rule of Statutory

Interpretation of positive and negative conditions whenever prescribed

by a statute:

“…Speaking generally, a distinction may be made between
positive and negative conditions prescribed by a statute for
acquiring a right or benefit. Positive conditions separated by ‘or’
are read in the alternative71 but negative conditions connected by
‘or’ are construed as cumulative and ‘or’ is read as ‘nor’ or ‘and’72.

The above rule of Statutory Interpretation is based upon the

decision of this Court in Patel Chunibhai Dajibha, etc. vs. Narayanrao

Khanderao Jambekar and Anr.73, in which this court held:

“(19) It may be recalled that amendments to S. 32 were made
from time to time, and the Bombay Act XXXVIII of 1957 added to
sub-s. (1)(b), cl. (iii) and the preceding “or”. It is to be noticed that
the conditions mentioned in sub-ss. (1)(a) and (1)(b) are mutually
exclusive. In spite of the absence of the word “or” between sub-

ss. (1)(a) and (1)(b), the two sub-sections lay down alternative
conditions. The tenant must be deemed to have purchased the

71 Star Co. Ltd. v. Commr. of Income-tax, AIR 1970 SC 1559: (1970) 3 SCC 864
72Patel Chunibhai Dajibha v. Narayanrao, 1965 (2) SCR 328; Punjab Produce & Trading Co. v.
Commissioner of Income Tax, West Bengal
, (1971) 2 SCC 540; Brown & Co. v. Harrison, (1927)
All ER Rep 195, pp. 203, 204 (CA).

For convenience, the numbers in the extracted portion above have been renumbered.
73 AIR 1965 SC 1457
91

land if he satisfies either of the two conditions. The appellant is
not a permanent tenant, and does not satisfy the condition
mentioned in sub-s.(1)(a). Though not a permanent tenant, he
cultivated the lands leased personally, and, therefore, satisfies
the first part of the condition specified in sub-s. (1)(b). The
appellant’s contention is that sub-ss. (1)(b)(i), (1)(b)(ii) and (1)(b)(iii)
lay down alternative conditions, and as he satisfies the condition
mentioned in sub-s. (1)(b)(iii), he must be deemed to have
purchased the land on April 1, 1957. Colour is lent to this
argument by the word “or” appearing between sub-s.(1)(b)(ii) and
sub-s.(1)(b)(iii). But, we think that the word “or” between sub-ss.
(1)(b)(ii) and (1)(b)(iii) in conjunction with the succeeding negatives
is equivalent to and should be read as “nor.” In other words, a
tenant (other than a permanent tenant) cultivating the lands
personally would become the purchaser of the lands on April 1,
1957, if on that date neither an application under S.29 read with
S.31 nor an application under S.29 read with S.14 was pending.
If an application either under S.29 read with S.31 or under S.29
read with S.14 was pending April 1, 1957, the tenant would
become the purchaser on “the postponed date”, that is to say,
when the application would be finally rejected. But if the
application be finally allowed, the tenant would not become the
purchaser. The expression “an application” in the proviso means
not only an application under S.31 but also an application under
S.29 read with S.14. If an application of either type was pending
on April 1, 1957, the tenant could not become the purchaser on
that elate. Now, on April 1, 1957, the application filed by
respondent No.1 under S.29 read with S.31 was pending.
Consequently, the appellant could not be deemed to have
purchased the lands on April 1, 1957.”

The decision of this Court in The Punjab Produce and Trading Co.

Ltd. vs. The C.I.T., West Bengal, Calcutta 74, was relied upon in the

discussion mentioned above, where provisions of Section 23A of the

Income Tax Act, 1922 and the Explanation (b)(ii) and (iii) came up for

consideration. This Court ruled with respect to “or” and held that it had

to be read as “and” construing negative conditions thus:

“7. On behalf of the assessee a good deal of reliance has been
placed on decision of this Court in Star Company Ltd. v. The
Commissioner of Income-tax (Central) Calcutta, (1970) 3 SCC

864. In that case, sub-clause (b)(ii) came up for consideration, and
it was held that the two parts of the Explanation contained in that
sub-clause were alternative. In other words, if one part was
satisfied it was unnecessary to consider whether the second part
was also satisfied. Thus the word “or” was treated as having

74 1971 (2) SCC 540
92

been used disjunctively and not conjunctively. The same
reasoning is sought to be invoked with reference to sub-clause

(b)(iii).

8. It is significant that the language of sub-clauses (ii) and (iii) of
clause (b) is different. The former relates to a positive state of
affairs whereas the latter lays down negative conditions. The
word “or” is often used to express an alternative of terms defined
or explanation of the same thing in different words. Therefore, if
either of the two negative conditions which are to be found in sub-
clause (b)(iii) remains unfulfilled, the conditions laid down in the
entire clause cannot be said to have been satisfied. The clear
import of the opening part of clause (b) with the word “and”
appearing there read with the negative or disqualifying
conditions in sub-clause (b)(iii) is that the assessee was bound to
satisfy apart from the conditions contained in the other sub-

clauses that its affairs were at no time during the previous year
controlled by less than six persons and shares carrying more
than 50 per cent of the total voting power were during the same
period not held by less than six persons. We are unable to find
any infirmity in the reasoning or the conclusion of the Tribunal
and the High Court so far as question 1 is concerned.”

It was observed that if either of the two negative conditions, which

are to be found in Sub-clause (b)(iii), remains unfulfilled, the conditions

laid down in the entire clause cannot be said to have been satisfied.

98. It would also be useful to note that in Brown & Co. v. Harrison75,

the provisions contained in Carriage of Goods by Sea Act, 1924 came

up for consideration before the Court of Appeal. The Court held that

the word “or” in Article IV, R 2 (q), must be read conjunctively and not

disjunctively. It has been observed that quite commonly collation of the

words “or” can be meant in conjunctive sense and certainly where the

disjunctive use of the word, leads to repugnance or absurdity.

75 (1927) All ER Rep 195 pp. 203, 204 (CA)
93

99. In this Court’s considered view, as regards the collation of the

words used in Section 24(2), two negative conditions have been

prescribed. Thus, even if one condition is satisfied, there is no lapse,

and this logically flows from the Act of 1894 read with the provisions of

Section 24 of the Act of 2013. Any other interpretation would entail

illogical results. That apart, if the rule of interpretation with respect to

two negative conditions qualified by “or” is used, then “or” should be

read as “nor” or “and”. Brown & Co. v. Harrison (supra), ruled thus,

about the interpretation of two negative conditions connected by the

word “or”:

“…..I think it quite commonly and grammatically can have a
conjunctive sense. It is generally disjunctive, but it may be plain
from the collation of words that it is meant in a conjunctive sense,
and certainly where the use of the word as a disjunctive leads to
repugnance or absurdity, it is quite within the ordinary principles
of construction adopted by the court to give the word a conjunctive
use. Here, it is quite plain that the word leads to an absurdity,
because the contention put forward by the shipowners in this
matter amounts to this, as my Lord said, that, if a shipowner
himself breaks open a case and steals the contents of it, he is
exempted from liability under r 2(q) if none of his servants stole
the part of the case or broke it open. That seems to me to be a
plain absurdity. In addition to that, there is a repugnancy
because it is plainly repugnant to the second part of r 2(q).
Therefore I say no more about that.”

100. In Federal Steam Navigation Co. Ltd. v. Department of Trade and

Industry76, the then House of Lords ruled as follows:

“If all these meanings are rejected, there remains the course of
treating “or” as expressing a non-exclusionary alternative – in
modern logic symbolised by “v.” In lawyer’s terms, this may be
described as the course of substituting “and” for “or,” rather the
course of redrafting the phrase so as to read: “the owner and the
master shall each be guilty,” or, if the phrase of convenience were
permitted “the owner and/or the master.” To substitute “and” for
“or” is a strong and exceptional interference with a legislative text,
and in a penal statute, one must be even more convinced of its

76 1974 (1) WLR 505
94

necessity. It is surgery rather than therapeutics. But there are
sound precedents for so doing: my noble and learned friend, Lord
Morris of Borth-y-Gest, has mentioned some of the best known:
they are sufficient illustrations and I need not re-state them. I
would add, however, one United States case, a civil case, on an
Act concerning seamen of 1915. This contained the words: “Any
failure of the master shall render the master or vessel or the
owner of the vessel liable in damages.” A District Court in
Washington D.C. read “or” as “and” saying that there could not
have been any purpose or intention on the part of Congress to
compel the seamen to elect as to which to pursue and thereby
exempt the others from liability – The Blakeley, 234 Fed. 959.
Although this was a civil, not a criminal case, I find the conclusion
and the reasoning reassuring.”

101. In M/s. Ranchhoddas Atmaram and Anr. v. The Union of India and

Ors.77, a Constitution Bench of this Court observed that if there are two

negative conditions, the expression “or” has to be read as conjunctive

and conditions of both the clauses must be fulfilled. It was observed:

“(13) It is clear that if the words form an affirmative sentence,
then the condition of one of the clauses only need be fulfilled. In
such a case, “or” really means “either” “or.” In the Shorter Oxford
Dictionary one of the meanings of the word “or” is given as “A
particle co-ordinating two (or more) words, phrases or clauses
between which there is an alternative.” It is also there stated,
“The alternative expressed by “or” is emphasised by prefixing the
first member or adding after the last, the associated adv.
EITHER.” So, even without “either,” “or” alone creates an
alternative. If, therefore, the sentence before us is an affirmative
one, then we get two alternatives, any one of which may be
chosen without the other being considered at all. In such a case
it must be held that a penalty exceeding Rs. 1,000 can be
imposed.

(14) If, however, the sentence is a negative one, then the position
becomes different. The word “or” between the two clauses would
then spread the negative influence over the clause following it.
This rule of grammar is not in dispute. In such a case the
conditions of both the clauses must be fulfilled and the result
would be that the penalty that can be imposed can never exceed
Rs. 1,000.

(15) The question then really comes to this: Is the sentence before
us a negative or an affirmative one? It seems to us that the
sentence is an affirmative sentence. The substance of the
sentence is that a certain person shall be liable to a penalty. That

77 AIR 1961 SC 935
95

is a positive concept. The sentence is therefore not negative in its
import.”
(emphasis supplied)

Thus, for lapse of acquisition proceedings initiated under the old

law, under Section 24(2) if both steps have not been taken, i.e., neither

physical possession is taken, nor compensation is paid, the land

acquisition proceedings lapse. Several decisions were cited at Bar to

say that “or” has been treated as “and” and vice versa. Much depends

upon the context. In Prof. Yashpal & Ors. v. State of Chhattisgarh &

Ors.78, the expression “established or incorporated” was read as

“established and incorporated.” In R.M.D.C (supra), to give effect to the

clear intention of the Legislature, the word “or” was read as “and.”

102. In Ishwar Singh Bindra (supra) it was observed that:

“11. Now if the expression “substances” is to be taken to mean
something other than “medicine” as has been held in our previous
decision it becomes difficult to understand how the word “and”
as used in the definition of drug in S. 3(b)(i) between “medicines”
and “substances” could have been intended to have been used
conjunctively. It would be much more appropriate in the context
to read it disconjunctively. In Stroud’s Judicial Dictionary, 3rd
Edn. it is stated at page 135 that “and” has generally a
cumulative sense, requiring the fulfilment of all the conditions
that it joins together, and herein it is the antithesis of or.
Sometimes, however, even in such a connection, it is, by force of
a contexts, read as “or.” Similarly, in Maxwell on Interpretation of
Statutes, 11th Edn., it has been accepted that “to carry out the
intention of the legislature it is occasionally found necessary to
read the conjunctions “or” and “and’ one for the other.”

103. In Joint Director of Mines Safety v. Tandur and Nayandgi Stone

Quarries (P) Ltd79, “and” was read disjunctively considering the

legislative intent. In Samee Khan (supra), the term “and” was construed

78 (2005) 5 SCC 420
79 (1987) 3 SCC 308
96

as “or” to carry out the legislative intention. In Mobilox Innovations

Private Limited (supra), similar observations were made. In Green v.

Premier Glynrhonwy State Co. L.R80, it has been laid down that

sometimes word “or” read as “and” and vice versa, but does not do so

unless it becomes necessary because “or” does not generally mean “and”

and “and” does not generally mean “or”.

104. In R.M.D.C. (supra) the definition under Section 2(1)(d) came up

for consideration. The qualifying clause consisted of two parts

separated from each other by the disjunctive word “or”. Both parts of

the qualifying clause indicated that each of the five kinds of prize

competitions that they qualified were of a gambling nature. The court

held considering the apparent intention of the legislature, it has

perforce to read the word “or” as “and”. In Tilkayat Shri Govindlalji

Maharaj etc. v State of Rajasthan & Ors81, this Court considered the

composition of the Board prescribed under Section 5. The expressions

used were not belonging to professing the Hindu religion or not

belonging to the Pushti-Margiya Vallabhi Sampradaya. Two negative

conditions were used. This Court has observed that “or” in clause (g)

dealing with disqualification must mean “and”. The relevant portion of

the same is extracted hereunder:

“(39) …The composition of the Board has been prescribed by
Section 5; it shall consist of a President, the Collector of Udaipur
District, and nine other members. The proviso to the section is
important: it says that the Goswami shall be one of such

80 (1928) 1 KB 561
81 AIR 1963 SC 1638
97

members if he is not otherwise disqualified to be a member and
is willing to serve as such. Section 5(2) prescribes the
disqualifications specified in clauses (a) to (g) – unsoundness of
mind adjudicated upon by competent court, conviction involving
moral turpitude; adjudication as an insolvent or the status of an
undischarged insolvent; minority, the defect of being deaf-mute
or leprosy; holding an office or being a servant of the temple or
being in receipt or any emoluments or perquisites from the temple;
being interested in a subsisting contract entered into with the
temple; and lastly, not professing the Hindu religion or not
belonging to the Pushti-MargiyaVallabhi Sampradaya. There can
be no doubt that “or” in clause (g) must mean “and,” for the context
clearly indicates that way. There is a proviso to Section 5(2)
which lays down that the disqualification as to the holding of an
office or an employment under the temple shall not apply to the
Goswami and the disqualification about the religion will not apply
to the Collector; that is to say, a Collector will be a member of the
Board even though he may not be a Hindu and a follower of the
denomination. Section 5(3) provides that the President of the
Board shall be appointed by the State Government and shall for
all purposes be deemed to be a member. Under Section 5(4) the
Collector shall be an ex-officio member of the Board. Section 5(5)
provides that all the other members specified in sub-clause (1)
shall be appointed by the State Government so as to secure
representation of the Pushti-Margiya Vaishnavas from all over
India. This clearly contemplates that the other members of the
Board shall not only be Hindus, but should also belong to the
denomination, for it is in that manner alone that their
representation can be adequately secured.”

(emphasis supplied)

105. In Prof. Yashpal (supra), the word “or” occurring in the expression

“established or incorporated” was read as “and” so that the State

enactment did not come in conflict with the Central legislation and

create any hindrance or obstacle in the working of the latter. This court

has observed:

“59. Shri Rakesh Dwivedi has also submitted that insofar as
private universities are concerned, the word “or” occurring in the
expression “established or incorporated” in Sections 2(f), 22 and
23 of the UGC Act should be read as “and.” He has submitted that
the normal meaning of the word “established” is to bring into
existence. In order to avoid the situation which has been created
by the impugned enactment where over 112 universities have
come into existence within a short period of one year of which
many do not have any kind of infrastructure or teaching facility,
it will be in consonance with the constitutional scheme that only
after establishment of the basic requisites of a university
(classrooms, library, laboratory, offices, and hostel facility, etc.)
98

that it should be incorporated and conferred a juristic personality.
The word “or” is normally disjunctive and “and” is normally
conjunctive, but at times, they are read vice versa to give effect to
the manifest intentions of the legislature, as disclosed from the
context. If literal reading of the word produces an unintelligible or
absurd result, “and” maybe read for “or” and “or” maybe read for
“and.” (See Principles of Statutory Interpretation by G.P. Singh,
7th Edn., p. 339 and also State of Bombay v. R.M.D.
Chamarbaugwala
, AIR 1957 SC 699, AIR at p. 709 and
Mazagaon Dock Ltd. v. CIT, AIR 1958 SC 861) We are of the
opinion that having regard to the constitutional scheme and in
order to ensure that the enactment made by Parliament, namely,
the University Grants Commission Act is able to achieve the
objective for which it has been made and UGC is able to perform
its duties and responsibilities, and further that the State
enactment does not come in conflict with the Central legislation
and create any hindrance or obstacle in the working of the latter,
it is necessary to read the expression “established or
incorporated” as “established and incorporated” insofar as the
private universities are concerned.”
(emphasis supplied)

106. Reference has also been made to Pooran Singh v. State of M.P82, in

which the Court considered the scheme of the M.V. Act. The magistrate

was bound to issue summons of the nature prescribed by sub-section

(1) of Section 130. The Court held that there was nothing in the sub-

section which indicated that he must endorse the summons in terms of

both the clauses (a) and (b), that he is so commanded would be to

convert the conjunction ‘or’ into ‘and’. There is nothing in the language

of the legislature which justifies such a conversion and there are

adequate reasons which make such an interpretation wholly

inconsistent with the scheme of the Act.

107. Reliance has been placed on Sri Nasiruddin v. State Transport

Appellate Tribunal83. The word ‘or’ was given grammatical meaning. The

82 1965 (2) SCR 853
83 1975 (2) SCC 671
99

order states that the High Court shall sit as the new High Court and the

Judges and Division Bench thereof shall sit at Allahabad or at such

other places in the United Provinces as the Chief Justice may appoint.

It was held that the word ‘or’ cannot be read as ‘and’. They should be

considered in an ordinary sense. If two different interpretations are

possible, the court will adopt that which is just, reasonable and

sensible. The Court observed thus:

“27. The conclusion as well as the reasoning of the High Court
that the permanent seat of the High Court is at Allahabad is not
quite sound. The order states that the High Court shall sit as the
new High Court and the judges and Division Bench thereof shall
sit at Allahabad or at such other places in the United Provinces
as the Chief Justice may, with the approval of the Governor of the
United Provinces, appoint. The word “or” cannot be read as “and”.
If the precise words used are plain and unambiguous, they are
bound to be construed in their ordinary sense. The mere fact that
the results of a statute may be unjust does not entitle a court to
refuse to give it effect. If there are two different interpretations of
the words in an Act, the Court will adopt that which is just,
reasonable and sensible rather than that which is none of those
things. If the inconvenience is an absurd inconvenience, by
reading an enactment in its ordinary sense, whereas if it is read
in a manner in which it is capable, though not in an ordinary
sense, there would not be any inconvenience at all; there would
be reason why one should not read it according to its ordinary
grammatical meaning. Where the words are plain, the Court
would not make any alteration.”

108. In Municipal Corporation of Delhi v. Tek Chand Bhatia 84, for

interpretation of ‘and’ and ‘or’ in the context of the term ‘adulterated’ as

defined in section 2(i)(f), the Court observed:

“7. We are of the opinion that the High Court was clearly wrong
in its interpretation of Section 2(i)(f). On the plain language of the
definition section, it is quite apparent that the words “or is
otherwise unfit for human consumption” are disjunctive of the rest
of the words preceding them. It relates to a distinct and separate
class altogether. It seems to us that the last clause “or is
otherwise unfit for human consumption” is residuary provision,
which would apply to a case not covered by or falling squarely

84 (1980) 1 SCC 158
100

within the clauses preceding it. If the phrase is to be read
disjunctively the mere proof of the article of food being “filthy,
putrid, rotten, decomposed . . . or insect-infested” would be per se
sufficient to bring the case within the purview of the word
“adulterated” as defined in sub-clause (f), and it would not be
necessary in such a case to prove further that the article of food
was unfit for human consumption.

***

11. In the definition clause, the collection of words “filthy, putrid,
rotten, decomposed and insect-infested,” which are adjectives
qualifying the term “an article of food,” show that it is not of the
nature, substance, and quality fit for human consumption. It will
be noticed that there is a comma after each of the first three
words. It should also be noted that these qualifying adjectives
cannot be read into the last portion of the definition i.e., the word’
“or is otherwise unfit for human consumption,” which is quite
separate and distinct from others. The word “otherwise” signifies
unfitness for human consumption due to other causes. If the last
portion is meant to mean something different, it becomes difficult
to understand how the word “or” as used in the definition of
“adulterated” in Section 2(i)(f) between “filthy, putrid, rotten, etc.”
and “otherwise unfit for human consumption” could have been
intended to be used conjunctively. It would be more appropriate
in the context to read it disjunctively. In Stroud’s Judicial
Dictionary, 3rd Edn., Vol. 1, it is stated at p. 135:

“And” has generally a cumulative sense, requiring the
fulfilment of all the conditions that it joins together, and herein it
is the antithesis of “or”. Sometimes, however, even in such a
connection, it is, by force of a context, read as “or”.
While dealing with the topic ‘OR is read as AND, and vice versa’,
Stroud says in Vol. 3, at p. 2009:

“You will find it said in some cases that ‘or’ means ‘and’; but ‘or’
never does mean ‘and’.

Similarly, in Maxwell on Interpretation of Statutes, 11th Edn., pp.
229-30, it has been accepted that “to carry out the intention of the
legislature, it is occasionally found necessary to read the
conjunctions ‘or’ and ‘and’ one for the other.” The word “or” is
normally disjunctive and “and” is normally conjunctive, but at
times they are read as vice versa. As Scrutton, L.J. said in Green
v. Premier Glynrhonwy State Co., LR (1928) 1 KB 561, 568: “You
do sometimes read “or” as “and” in a statute . . . . But you do not
do it unless you are obliged, because “or” does not generally
mean “and” and “and” does not generally mean “or.” As Lord
Halsbury L.C. observed in Mersey Docks & Harbour Board v.
Henderson, LR (1888) 13 AC 603, the reading of “or” as “and” is
not to be resorted to “unless some other part of the same statute
or the clear intention of it requires that to be done.” The
substitution of conjunctions, however, has been sometimes made
without sufficient reasons, and it has been doubted whether
some of the cases of turning “or” into “and” and vice versa have
not gone to the extreme limit of interpretation.”

101

109. In State of Punjab v. Ex-Constable Ram Singh85, ‘or’ was read as

‘nor’ and not as ‘and’ in the context of Section 2 of the Armed Forces

Special Powers Act, 1948. In Naga People’s Movement of Human Rights

(supra), the Court held that the language of section 4(a) does not

support the said construction.

110. In Marsey Docks and Harbour Board v. Coggins and Griffith

(Liverpool) Ltd.86, the Court observed as follows: (at page 603)

“…unless the context makes the necessary meaning of “or” “and,”
as in some instances it does; but I believe it is wholly unexampled
so to read it when doing so will upon one construction entirely
alter the meaning of the sentence unless some other part of the
same statute or the clear intention of it requires that to be
done,……It may indeed be doubted whether some of the cases of
turning “or” into “and” and vice versa have not gone to the
extreme limit of interpretation, but I think none of them would
cover this case.”

111. In Re Hayden Pask v. Perry87, the expression “or their issue” had

been considered, and it was observed that the words “or their issue”

must be read as words of limitation and not of substitution. The word

“or” was construed to mean “and.” The learned SG placed reliance on

the Queen’s Bench decision in Metropolitan Board of Works v. Street

Bros88 to submit that the issue was whether, in terms of its grammatical

meaning, if two things were prohibited, both were permitted and not

merely permitted in the alternative. It would have been more strictly

85 (1992) 4 SCC 54
86 LR (AC) Vol.XIII 1888 595
87 (1931) 2 Ch.333
88 (1881) VIII QBD 445
102

grammatical to have written “nor” instead of “or.” The following

discussion was made in the decision:

“Dec.13. GROVE, J. The main question before us turns on the
meaning of the word “or,” used in 25 & 26 Vict. c. 102, s.98. Read
shortly, s. 98 enacts that no existing road, passage or way, shall
be hereafter formed or laid out for carriage traffic unless such
road shall be forty feet wide, or for the purposes of foot traffic,
unless such road be of the width of twenty feet, or unless such
streets respectively shall be open at both ends. The question is
whether that word “or” should be read in the disjunctive or
conjunctive, or perhaps read as either “and” or “nor:” I think it
means “nor;” that is to say, that the two things comprised in the
prohibition are both prohibited, and not merely prohibited in the
alternative. If the sense which I attribute to the word is right, it
would have been more strictly grammatical to have written “nor”
instead of “or.” But I think that the meaning of the enactment is
that the road must be of the width specified, and that no road
shall be allowed unless it is of the width specified, nor unless it
is open at both ends. That seems to me to be the object of the
statute, which was passed for sanitary purposes, and also for
the purpose of comfort and traffic.

It was contended that the object of the provision is sanitary
only, and that if a street is forty feet wide, or if however narrow,
it is open at both ends, good ventilation is secured. But a very
long narrow street would hardly be more salubrious with both
ends open than if one end were closed and the street were a cul
de sac.

Our construction of the Act is according to the ordinary use of
language, although it may not be strictly grammatical. We might
have referred to authorities by good writers, shewing that where
the word “or” is preceded by a negative or prohibitory provision,
it frequently has a different sense from that which it has when it
is preceded by an affirmative provision. For instance, suppose
an order that “you must have your house either drained or
ventilated.” The word “or” would be clearly used in the
alternative. Suppose again, the order was that “you must have
your house drained or ventilated,” that conveys the idea to my
mind that you must have your house either drained or ventilated.
But supposing the order were that “you must not have your house
undrained or unventilated.” The second negative words are
coupled by the word “or,” and the negative in the preceding
sentence governs both. In s. 98 there is a negative preceding a
sentence; “no existing road” shall be formed as a street for
carriage traffic unless such road be widened to forty feet, or for
the purposes of foot traffic only unless such road or way be
widened to the width of twenty feet, “or” unless such streets shall
be open at both ends. Probably, if the word “or” in the sentence,
“or for purposes of foot traffic only,” had been written “nor,” the
language there too would have been more clear and more
decidedly prohibitory; but with regard to the sentence “or unless
such streets shall be open at both ends” I think that by reading
103

the word “or” as “nor” we carry out the intention of the Act, which
was to have streets of a proper width and properly opened at
both ends, and that there should not be incommodious and
unhealthy cross streets which are culs de sac, shut up at one
end.

There have been frequently cases on the construction of
statutes where the Courts have held “or” to mean “and,” taking
the rest of the sentence in which the word “or” occurred, the object
and intention being prohibition, and the two things prohibited
being coupled by the word “or.” I think the prohibition in s.98
relates to both the width and open ending of streets. The street
must be both of the width prescribed and also open at both ends.”

112. Section 24(2) of the Act of 2013 is, in our opinion, a penal

provision – to punish the acquiring authority for its lethargy in not

taking physical possession nor paying the compensation after making

the award five years or more before the commencement of the Act of

2013 in pending proceedings, providing that they would lapse. The

expression where an award has been made, then the proceedings shall

continue used in Section 24(1)(b) under the provisions of the Act of 1894

means that proceedings were pending in praesenti as on the date of

enforcement of the Act of 2013 are not concluded proceedings, and in

that context, an exception has been carved out in section 24(2).

113. Even if possession has been taken, despite which payment has

not been made nor deposited, (for the majority of the land-holdings),

then all beneficiaries holding land on the date of notification under

Section 4 of the Act of 1894, are to be paid compensation under the

provisions of the Act of 2013. Section 24 of the Act of 2013 frowns upon

indolence and stupor of the authorities. The expression “possession of

the land has not been taken” or “compensation has not been paid”
104

indicates a failure on the part of the authorities to take the necessary

steps for five years or more in a pending proceeding under Section

24(1)(b). Section 24(2) starts with a non-obstante clause overriding what

is contained in Section 24(1). Thus, Section 24(2) has to be read as an

exception to Section 24(1)(b). Similarly, the proviso has to be read as a

proviso to Section 24(2) for the several reasons to be discussed

hereafter. Parliament enacted a beneficial provision in case authorities

delayed in taking of the possession for more than five years nor paid

compensation, meaning thereby acquisition has not been completed.

Section 24(2) clearly contemplates inaction on the part of the authorities

not as a result of the dilatory tactics and conduct of the landowners or

other interested persons.

114. There are other reasons to read the word ‘or’ in Section 24 as ‘and.’

When we consider the scheme of the Act of 1894, once the award was

made under Section 11, the Collector may, undertake possession of the

land which shall thereupon vest absolutely in the Government free from

all encumbrances. Section 16 of the Act of 1894 enables the Collector

to take possession of acquired land, when an award is made under

Section 11. Section 17(1) of the Act of 1894 confers special powers in

cases of urgency. The Collector could, on the expiration of 15 days from

the publication of notice under Section 9(1), take possession of any land

needed for a public purpose and such land was to thereupon vest

absolutely in the Government, free from all encumbrances. Under
105

Section 17(3A) before taking possession, the Collector had to tender

payment of 80% of the compensation, as estimated by him and also had

to pay the landowners or to persons interested, unless prevented by

exigencies mentioned in Section 31(2). It is also provided in sub-section

(3B) of Section 17 of the Act of 1894 that the amount paid or deposited

under Section 17(3A) shall be taken into account for determining the

compensation required to be tendered under Section 31.

115. It is apparent from a plain reading of Section 16 (of the Act of

1894) that the land vests in the Government absolutely when

possession is taken after the award is passed. Clearly, there can be

lapse of proceedings under the Act of 1894 only when possession is not

taken. The provisions in Section 11A of the Act of 1894 states that the

Collector shall make an award within a period of two years from the

date of the publication of the declaration under Section 6 and if no

award is made within two years, the entire proceedings for acquisition

of the land shall lapse. The period of two year excludes any period

during which interim order granted by the Court was in operation. Once

an award is made and possession is taken, by virtue of Section 16, land

vests absolutely in the State, free from all encumbrances. Vesting of

land is automatic on the happening of the two exigencies of passing

award and taking possession, as provided in Section 16. Once

possession is taken under Section 16 of the Act of 1894, the owner of
106

the land loses title to it, and the Government becomes the absolute

owner of the land.

116. Payment of compensation under the Act of 1894 is provided for by

Section 31 of the Act, which is to be after passing of the award under

Section 11. The exception, is in case of urgency under Section 17, is

where it has to be tendered before taking possession. Once an award

has been passed, the Collector is bound to tender the payment of

compensation to the persons interested entitled to it, as found in the

award and shall pay it to them unless “prevented” by the contingencies

mentioned in sub-section (2) of Section 31. Section 31(3) contains a non-

obstante clause which authorises the Collector with the sanction of the

appropriate Government, in the interest of the majority, by the grant of

other lands in exchange, the remission of land revenue on other lands

or in such other way as may be equitable.

117. Section 31(1) enacts that the Collector has to tender payment of

the compensation awarded by him to the persons interested entitled

thereto according to the award and shall pay such amount to a person

interested in the land, unless he (the Collector) is prevented from doing

so, for any of the three contingencies provided by sub-section (2).

Section 31 (2) provides for deposit of compensation in Court in case

State is prevented from making payment in the event of (i) refusal to

receive it; (ii) if there be no person competent to alienate the land; (iii) if

there is any dispute as to the title to receive the compensation; or (iv) if
107

there is dispute as to the apportionment. In such exigencies, the

Collector shall deposit the amount of the compensation in the court to

which a reference under Section 18 would be submitted.

118. Section 34 deals with a situation where any of the obligations

under Section 31 is not fulfilled, i.e., when the amount of compensation

is not paid or deposited on or before taking possession of the land, the

Collector shall pay the amount awarded with interest thereon at the rate

of 9% per annum from the time of so taking possession until it shall

have been so paid or deposited; and after one year from the date on

which possession is taken, interest payable shall be at the rate of 15%

per annum. The scheme of the Act of 1894 clearly makes it out that

when the award is passed under Section 11, thereafter possession is

taken as provided under Section 16, land vests in the State

Government. Under Section 12(2), a notice of the award has to be

issued by the Collector. Taking possession is not dependent upon

payment. Payment has to be tendered under Section 31 unless the

Collector is “prevented from making payment,” as provided under

section 31(2). In case of failure under Section 31(1) or 31(3), also

Collector is not precluded from making payment, but it carries interest

under Section 34 @ 9% for the first year from the date it ought to have

been paid or deposited and thereafter @ 15%. Thus, once land has been

vested in the State under Section 16, in case of failure to pay the

compensation under Section 31(1) to deposit under Section 31(2),
108

compensation has to be paid along with interest, and due to non-

compliance of Section 31, there is no lapse of acquisition. The same

spirit has been carried forward in the Act of 2013 by providing in Section

24(2). Once possession has been taken though the payment has not

been made, the compensation has to be paid along with interest as

envisaged under section 34, and in a case, payment has been made,

possession has not been taken, there is no lapse under Section 24(2).

In a case where possession has been taken under the Act of 1894 as

provided by Section 16 or 17(1) the land vests absolutely in the State,

free from all encumbrances, if compensation is not paid, there is no

divesting there will be no lapse as compensation carries interest @ 9%

or @ 15% as envisaged under Section 34 of the Act of 1894. Proviso to

Section 24(2) makes some wholesome provision in case the amount has

not been deposited with respect to majority of landholdings, in such an

event, not only those persons but all the beneficiaries, though for

minority of holding compensation has been paid, shall be entitled to

higher compensation in accordance with the provisions of the Act of

2013. The expression used is “all beneficiaries specified in the

notification for acquisition under Section 4 of the said Land Acquisition

Act”, i.e., Act of 1894, means that the persons who are to be paid higher

compensation are those who have been recorded as beneficiaries as on

the date of notification under Section 4. The proviso gives effect to, and

furthers the principle that under the Act of 1894, the purchases made

after issuance of notification under Section 4 are void. As such, the
109

benefit of higher compensation under the proviso to Section 24(2) is

intended to be given to the beneficiaries mentioned in the notification

under Section 4 of the Act of 1894.

119. It is apparent from the Act of 1894 that the payment of

compensation is dealt with in Part V, whereas acquisition is dealt with

in Part II. Payment of compensation is not made pre-condition for taking

possession under Section 16 or under Section 31 read with Section 34.

Possession can be taken before tendering the amount except in the case

of urgency, and deposit (of the amount) has to follow in case the

Collector is prevented from making payment in exigencies as provided

in Section 31(3). What follows is that in the event of not fulfilling the

obligation to pay or to deposit under Section 31(1) and 31(2), the Act of

1894 did not provide for lapse of land acquisition proceedings, and only

increased interest follows with payment of compensation.

120. The terms of object clause No. 18 (of the Statement of Objects and

Reasons) to the Act of 2013 reveals that the option of taking possession

(of acquired land) upon making of an award the new law would be

available in the cases of land acquisition under the Act of 1894 where

award has not been made, or possession of land has not been taken. It

is apparent that the benefits under the Act of 2013 envisage that where

the award had not been made, or award has been made, but possession

has not been taken (because once possession is taken, land is vests in

the State) there can be lapse of acquisition. No doubt about that
110

payment is also to be made: that issue is taken care of by the provision

of payment of interest under Section 34: also, in case of non-deposit- in

respect of majority of holdings in a given award, higher compensation

under the Act of 2013 has to be paid to all beneficiaries as on the date

of notification under Section 4 issued under the Act of 1894. There is

nothing in the Statement of Objects and Reasons making specific

reference to non-payment of compensation where an award has been

made, and possession has been taken. While interpreting the

provisions of an Act, the court to consider the objects and reasons of

the legislature, which the legislature had in mind also emphasised that

once vesting is complete, there is no divesting as held in Workmen of

Dimakuchi Tea Estate v. Management of Dimakuchi Tea Estate 89, thus:

“(9) A little careful consideration will show, however, that the
expression “any person” occurring in the third part of the
definition clause cannot mean anybody and everybody in this
wide world. First of all, the subject matter of dispute must relate
to (i) employment or non-employment or (ii) terms of employment
or conditions of labour of any person; these necessarily import a
limitation in the sense that a person in respect of whom the
employer-employee relation never existed or can never possibly
exist cannot be the subject matter of a dispute between employers
and workmen. Secondly, the definition clause must be read in the
context of the subject matter and scheme of the Act, and
consistently with the objects and other provisions of the Act. It is
well settled that
“the words of a statute, when there is a doubt about their
meaning, are to be understood in the sense in which they best
harmonise with the subject of the enactment and the object which
the Legislature has in view. Their meaning is found not so much
in a strictly grammatical or etymological propriety of language,
nor even in its popular use, as in the subject or in the occasion on
which they are used, and the object to be attained.”

(Maxwell, Interpretation of Statutes, 9th Edition, p. 55).”

89 1958 SCR 1156
111

121. In Mukesh K. Tripathi v. Senior Divisional Manager, LIC & Ors.90,

the decision in Workmen of Dimakuchi Estate (supra) was reiterated, on

the issue of discerning the object of an enactment.

122. Section 24(2) of the Act of 2013 deals with a situation only where

the award has been made 5 years or more before the commencement of

the Act, but physical possession of the land has not been taken, nor

compensation has been paid. It does not visualize a situation where

possession has been taken under the urgency provision of Section 17(1),

but the award has not been made. In such cases, under Section 24(1)(a)

of the Act of 2013, there is no lapse of entire proceedings: but

compensation is to be determined in accordance with the provisions of

the Act of 2013. In case of urgency, possession is usually taken before

the award is passed. Thus, where no award is passed, where urgency

provision under Section 17(1) of the Act of 1894 had been invoked, there

is no lapse, only higher compensation would follow under Section

24(1)(a) even if payment has not been made or tendered under Section

17(3A) of the Act of 1894.

123. The provision for lapsing under Section 24 is available only when

the award has been made, but possession has not been taken within

five years, nor compensation has been paid. In case word ‘or’ is read

disjunctively, proceedings shall lapse even after possession has been

taken in order to prevent lapse of land acquisition proceedings, once the

90 (2004) 8 SCC 387
112

land has vested in the Government and in most cases, development has

already been made. The expressions used in Section 24(2) “possession

of the land has not been taken” and “the compensation has not been

paid” are unrelated and carry different consequences under the Act of

1894. As already discussed above, these conditions are merely exclusive

conditions and cannot be used as alternative conditions. There is a

catena of cases where compensation has been paid, but possession has

not been taken due to one reason or the other for no fault of authorities

or otherwise, and there are cases where possession is taken, but

compensation has not been paid.

124. Section 24 of the Act of 2013 is to be given full effect. Section 24(2)

has been carved out as an exception to the otherwise general

applicability of the provisions contained in Section 6 of the General

Clauses Act and Section 24(1)(a) and (b) apply to the proceedings which

are pending. Sub-section (2) is an exception to sub-section (1) which

reads: “Notwithstanding anything contained in sub-section (1)” where an

award has been made, but possession has not been taken nor

compensation has been paid, an exception has been carved in Section

24 where an award has been passed, but no steps have been taken to

take the possession nor payment of compensation has been made in

pending proceedings under Section 24(1). The provision has to be

construed in the spirit behind what is saved under Section 6 (of the
113

General Clauses Act) as provided in Section 114 of the Act of 2013 and

the non-obstante clause in Section 24(2).

125. It was also submitted on behalf of the States that neither a

transitory provision nor a repealing law could be interpreted so as to

take away, disturb or adversely affect rights created by operation of law.

It cannot divest the State Government of the land absolutely vested in

it. Reliance has been placed on K.S. Paripoornan v. State of Kerala &

Ors91 thus:

“12. It is further necessary to bear in mind that the amending Act
has added, among others, the provisions of Section 23(1-A) and
Section 28-A and has amended the provisions of Section 23(2). It
has also made independent transitional provision in its Section

30. The relevant provisions of Section 30 read as follows:

30. Transitional provisions.— (1) The provisions of sub-section (1-
A) of Section 23 of the principal Act, as inserted by clause (a) of
Section 15 of this Act, shall apply, and shall be deemed to have
applied, also to, and in relation to,—

(a) every proceeding for the acquisition of any land under the
principal Act pending on 30th day of April, 1982 [the date of
introduction of the Land Acquisition (Amendment) Bill, 1982 in the
House of the People], in which no award has been made by the
Collector before that date;

(b) every proceeding for the acquisition of any land under the
principal Act commenced after that date, whether or not an award
has been made by the Collector before the date of commencement
of this Act.

(2) The provisions of sub-section (2) of Section 23 and Section 28
of the principal Act, as amended by clause (b) of Section 15 and
Section 18 of this Act respectively, shall apply, and shall be
deemed to have applied, also to, and in relation to, any award
made by the Collector or Court or to any order passed by the High
Court or Supreme Court in appeal against any such award under
the provisions of the principal Act after the 30th day of April, 1982
[the date of introduction of the Land Acquisition (Amendment) Bill,
1982, in the House of the People] and before the commencement
of this Act.

The date of the introduction of the Bill of the amending Act is 30-
4-1982 and the date of its commencement is 24-9-1984.

91 1994 (5) SCC 593
114

***

38. The transitional provision is by its very nature an enabling
one and has to be interpreted as such. In the present case, it is
made to take care of the period between 30-4-1982 and 24-9-
1984, i.e., between the date of the introduction of the Bill of the
amending Act and the date of the commencement of the Act. Since
some awards might have been made by the Collector and the
reference Court during the said interregnum, the legislature did
not want to deprive the awardees concerned either of the newly
conferred benefit of Section 23(1-A) or of the increased benefit
under Sections 23(2) and 28. The second object was to enable the
Collector and the Court to give the said benefits in the proceedings
pending before them where they had not made awards. The only
limitation that was placed on the power of the Collector in this
behalf was that he should not reopen the awards already made
by him in proceedings which were pending before him on 30-4-
1982 to give the benefit of Section 23(1-A) to such awardees. This
was as stated earlier, for two reasons. If the said awards are
pending before the reference Court on the date of the
commencement of the amending Act, viz., 24-9-1984, the
reference Court would be able to give the said benefit to the
awardees. On the other hand, if the awardees in question had
accepted the awards, the same having become final, should not
be reopened. As regards the increased benefit under Sections
23(2)
and 28, the intention of the legislature was to extend it not
only to the proceedings pending before the reference Court on 24-
9-1984 but also to those where awards were made by the
Collector and the reference Courts between 30-4-1982 and 24-9-
1984. Hence these awards could not only be reopened but if they
were the subject-matter of the appeal before High Courts or the
Supreme Court, the appellate orders could also be reopened to
extend the said benefits.

***

71. Section 30 of the amending Act bears the heading
“Transitional provisions.” Explaining the role of transitional
provisions in a statute, Bennion has stated:

“Where an Act contains substantive, amending or repealing
enactments, it commonly also includes transitional provisions
which regulate the coming into operation of those enactments and
modify their effect during the period of transition. Where an Act
fails to include such provisions expressly, the court is required to
draw inferences as to the intended transitional arrangements as,
in the light of the interpretative criteria, it considers Parliament to
have intended.”
(Francis Bennion: Statutory Interpretation, 2nd Edn., p. 213)
The learned author has further pointed out:

“Transitional provisions in an Act or other instrument are
provisions which spell out precisely when and how the operative
parts of the instrument are to take effect. It is important for the
interpreter to realise, and bear constantly in mind, that what
appears to be the plain meaning of a substantive enactment is
often modified by transitional provisions located elsewhere in the
Act.” (p. 213)
115

Similarly Thornton in his treatise on Legislative Drafting [3rd Edn.,
1987, p. 319 quoted in Britnell v. Secretary of State for Social
Security, (1991) 2 All ER 726, 730 Per Lord Keith], has stated:
“The function of a transitional provision is to make special
provision for the application of legislation to the circumstances
which exist at the time when that legislation comes into force.”
For the purpose of ascertaining whether and, if so, to what extent
the provisions of sub-section (1-A) introduced in Section 23 by the
amending Act are applicable to proceedings that were pending on
the date of the commencement of the amending Act it is necessary
to read Section 23(1-A) along with the transitional provisions
contained in sub-section (1) of Section 30 of the amending Act.”
(emphasis supplied)

126. For interpretation of repeal and saving clauses, reliance has been

placed on Milkfood Ltd. v. GMC Ice Cream (P) Ltd92 thus:

“70. Section 85 of the 1996 Act repeals the 1940 Act. Sub-section
(2) of Section 85 provides for a non-obstante clause. Clause (a) of
the said sub-section provides for saving clause stating that the
provisions of the said enactments shall apply in relation to
arbitral proceedings which commenced before the said Act came
into force. Thus, those arbitral proceedings which were
commenced before coming into force of the 1996 Act are saved
and the provisions of the 1996 Act would apply in relation to
arbitral proceedings which commenced on or after the said Act
came into force. Even for the said limited purpose, it is necessary
to find out as to what is meant by commencement of arbitral
proceedings for the purpose of the 1996 Act wherefor also
necessity of reference to Section 21 would arise. The court is to
interpret the repeal and savings clauses in such a manner so as
to give a pragmatic and purposive meaning thereto. It is one thing
to say that commencement of arbitration proceedings is
dependent upon the facts of each case as that would be subject
to the agreement between the parties. It is also another thing to
say that the expression “commencement of arbitration
proceedings” must be understood having regard to the context in
which the same is used; but it would be a totally different thing
to say that the arbitration proceedings commence only for the
purpose of limitation upon issuance of a notice and for no other
purpose. The statute does not say so. Even the case-laws do not
suggest the same. On the contrary, the decisions of this Court
operating in the field beginning from Shetty’s Constructions Co.
(P) Ltd. v. Konkan Rly. Construction, (1998) 5 SCC 599 are ad
idem to the effect that Section 21 must be taken recourse to for
the purpose of interpretation of Section 85(2)(a) of the Act. There
is no reason, even if two views are possible, to make a departure
from the decisions of this Court as referred to hereinbefore.

***

105. In the present matter, one is concerned with transitional
provision i.e. Section 85(2)(a) which enacts as to how the statute

92 2004 (7) SCC 288
116

will operate on the facts and circumstances existing on the date
it comes into force and, therefore, the construction of such a
provision must depend upon its own terms and not on the basis
of Section 21 (see Singh, G.P.: Principles of Statutory
Interpretation, 8th Edn., p. 188). In Thyssen Stahlunion GMBH v.
Steel Authority of India Ltd
., (1999) 9 SCC 334 Section 48 of the
old Act and Section 85(2)(a) of the 1996 Act came for
consideration. It has been held by this Court that there is a
material difference between Section 48 of the 1940 Act, which
emphasised the concept of “reference” vis-à-vis Section 85(2)(a)
of the 1996 Act which emphasises the concept of
“commencement”; that there is a material difference in the
scheme of the two Acts; that the expression “in relation to”
appearing in Section 85(2)(a) refers to different stages of
arbitration proceedings under the old Act; and lastly, that Section
85(2)(a)
provides for limited repeal of the 1940 Act, therefore, I am
of the view that one cannot confine the concept of
“commencement” under Section 85(2)(a) only to Section 21 of the
1996 Act which inter alia provides for commencement of arbitral
proceedings from the date on which a request to refer a particular
dispute is received by the respondent. ….

***

109. To sum up, in this case, the question concerns interpretation
of transitional provisions; that Section 85(2)(a) emphasises the
concept of “commencement” whereas Section 48 of the 1940 Act
emphasised the concept of “reference”; that Section 85(2)(a)
provides for implied repeal; that the scheme of the 1940 Act is
different from the 1996 Act; that the word “reference” in Section
48
of the old Act had different meanings in different contexts; and
for the said reasons, I am of the view that while interpreting
Section 85(2)(a) in the context of the question raised in this
appeal, one cannot rely only on Section 21 of the 1996 Act.”
(emphasis supplied)

127. Under Section 48 of the Act of 1894, withdrawal of the land

acquisition proceedings was permissible only if the possession has not

been taken under Section 16 or 17(1). Section 48(1) is extracted

hereunder:

“48. Completion of acquisition not compulsory, but
compensation to be awarded when not completed. –
(1) Except in the case provided for in section 36, the Government
shall be at liberty to withdraw from the acquisition of any land of
which possession has not been taken.

(2) Whenever the Government withdraws from any such
acquisition, the Collector shall determine the amount of
compensation due for the damage suffered by the owner in
consequence of the notice or of any proceedings thereunder, and
shall pay such amount to the person interested, together with all
117

costs reasonably incurred by him in the prosecution of the
proceedings under this Act relating to the said land.

(3) The provisions of Part III of this Act shall apply, so far as may
be, to the determination of the compensation payable under this
section.”

In case possession has been taken, there cannot be any

withdrawal from the land acquisition proceedings under the Act of

1894.

128. Various decisions were referred on behalf of the State of Haryana

that once possession has been taken and land has not been utilised,

there cannot be withdrawal from the acquisition of any land. Land

cannot be restituted to the owner after the stage of possession is over.

Following decisions have been pressed into service:

(a). In Gulam Mustafa & Ors (supra), it was observed:

“5. At this stage Shri Deshpande complained that actually the
municipal committee had sold away the excess land marking
them out into separate plots for a housing colony. Apart from the
fact that a housing colony is a public necessity, once the original
acquisition is valid and title has vested in the municipality, how
it uses the excess land is no concern of the original owner and
cannot be the basis for invalidating the acquisition. There is no
principle of law by which a valid compulsory acquisition stands
voided because long later the requiring authority diverts it to a
public purpose other than the one stated in the Section 6(3)
declaration.”

Chandragauda Ramgonda Patil & Anr. (supra) when restitution of

land was sought, on the basis of some Government resolutions, after

possession had been taken, this observed thus:

“2… Since he had sought enforcement of the said government
resolution, the writ petition could not be dismissed on the ground
of constructive res judicata. He also seeks to rely upon certain
orders said to have been passed by the High Court in conformity
118

with enforcement of the government resolution. We do not think
that this Court would be justified in making direction for
restitution of the land to the erstwhile owners when the land was
taken way back and vested in the Municipality free from all
encumbrances. We are not concerned with the validity of the
notification in either of the writ petitions. It is axiomatic that the
land acquired for a public purpose would be utilised for any other
public purpose, though use of it was intended for the original
public purpose. It is not intended that any land which remained
unutilised, should be restituted to the erstwhile owner to whom
adequate compensation was paid according to the market value
as on the date of the notification. Under these circumstances, the
High Court was well justified in refusing to grant relief in both the
writ petitions.”
(emphasis supplied)

Again, in C. Padma & Ors. v. Dy. Secretary & Ors93, this court

stated that:

“4. The admitted position is that pursuant to the notification
published under Section 4(1) of the Land Acquisition Act, LA (for
short “the Act”) in GOR No. 1392 Industries dated 17-10-1962,
total extent of 6 acres 41 cents of land in Madhavaram Village,
Saidapet Taluk, Chengalpattu District in Tamil Nadu was
acquired under Chapter VII of the Act for the manufacture of
Synthetic Rasina by Tvl. Reichold Chemicals India Ltd., Madras.
The acquisition proceedings had become final and possession of
the land was taken on 30-4-1964. Pursuant to the agreement
executed by the company, it was handed over to Tvl. Simpson
and General Finance Co. which is a subsidiary of Reichold
Chemicals India Ltd. It would appear that at a request made by
the said company, 66 cents of land out of one acre 37 cents in
respect of which the appellants originally had ownership, was
transferred in GOMs No. 816 Industries dated 24-3-1971 in
favour of another subsidiary company. Shri Rama Vilas Service
Ltd., the 5th respondent which is also another subsidiary of the
Company had requested for two acres 75 cents of land; the same
came to be assigned on leasehold basis by the Government after
resumption in terms of the agreement in GOMs No. 439 Industries
dated 10-5-1985. In GOMs No. 546 Industries dated 30-3-1986,
the same came to be approved of. Then the appellants challenged
the original GOMs No. 1392 Industries dated 17-10-1962
contending that since the original purpose for which the land was
acquired had ceased to be in operation, the appellants are
entitled to restitution of the possession taken from them. The
learned Single Judge and the Division Bench have held that the
acquired land having already vested in the State, after receipt of
the compensation by the predecessor-in-title of the appellants,
they have no right to challenge the notification. Thus the writ
petition and the writ appeal came to be dismissed.

93 (1997) 2 SCC 627
119

5. Shri G. Ramaswamy, learned Senior Counsel appearing for the
appellants, contends that when by operation of Section 44-B read
with Section 40 of the Act, the public purpose ceased to be
existing, the acquisition became bad and therefore, the GO was
bad in law. We find no force in the contention. It is seen that after
the notification in GOR 1392 dated 17-10-1962 was published,
the acquisition proceeding had become final, the compensation
was paid to the appellants’ father and thereafter the lands stood
vested in the State. In terms of the agreement as contemplated in
Chapter VII of the Act, the Company had delivered possession
subject to the terms and conditions thereunder. It is seen that one
of the conditions was that on cessation of the public purpose, the
lands acquired would be surrendered to the Government. In
furtherance thereof, the lands came to be surrendered to the
Government for resumption. The lands then were allotted to SRVS
Ltd., 5th respondent which is also a subsidiary amalgamated
company of the original company. Therefore, the public purpose
for which acquisition was made was substituted for another
public purpose. Moreover, the question stood finally settled 32
years ago and hence the writ petition cannot be entertained after
three decades on the ground that either original purpose was not
public purpose or the land cannot be used for any other purpose.

6. Under these circumstances, we think that the High Court was
right in refusing to entertain the writ petition.”
(emphasis supplied)

The decision in Northern Indian Glass Industries v. Jaswant Singh

& Ors94 thus:

“9…There is no explanation whatsoever for the inordinate delay
in filing the writ petitions. Merely because full enhanced
compensation amount was not paid to the respondents, that itself
was not a ground to condone the delay and laches in filing the
writ petition. In our view, the High Court was also not right in
ordering restoration of land to the respondents on the ground that
the land acquired was not used for which it had been acquired.

It is a well-settled position in law that after passing the award
and taking possession under Section 16 of the Act, the acquired
land vests with the Government free from all encumbrances. Even
if the land is not used for the purpose for which it is acquired, the
landowner does not get any right to ask for revesting the land in
him and to ask for restitution of the possession. This Court as
early as in 1976 in Gulam Mustafa v. State of Maharashtra,
(1976) 1 SCC 800 in para 5 has stated thus: (SCC p. 802, para 5)
“5. At this stage Shri Deshpande complained that actually the
municipal committee had sold away the excess land marking
them out into separate plots for a housing colony. Apart from the
fact that a housing colony is a public necessity, once the original
acquisition is valid and title has vested in the municipality, how
it uses the excess land is no concern of the original owner and
cannot be the basis for invalidating the acquisition. There is no

94 (2003) 1 SCC 335
120

principle of law by which a valid compulsory acquisition stands
voided because long after the requiring authority diverts it to a
public purpose other than the one stated in the Section 6(3)
declaration.””
(emphasis supplied)

Sita Ram Bhandar Society, New Delhi (supra)95 the Court observed
that:

“28. A cumulative reading of the aforesaid judgments would
reveal that while taking possession, symbolic and notional
possession is perhaps not envisaged under the Act but the
manner in which possession is taken must of necessity depend
upon the facts of each case. Keeping this broad principle in mind,
this Court in T.N. Housing Board v. A. Viswam, (1996) 8 SCC 259
after considering the judgment in Balwant Narayan Bhagde v.
M.D. Bhagwat
, (1976) 1 SCC 700, observed that while taking
possession of a large area of land (in this case 339 acres) a
pragmatic and realistic approach had to be taken. This Court then
examined the context under which the judgment in Narayan
Bhagde case had been rendered and held as under: (Viswam
case, SCC p. 262, para 9)
“9. It is settled law by series of judgments of this Court that one
of the accepted modes of taking possession of the acquired land
is recording of a memorandum or panchnama by the LAO in the
presence of witnesses signed by him/them and that would
constitute taking possession of the land as it would be impossible
to take physical possession of the acquired land. It is common
knowledge that in some cases the owner/interested person may
not be cooperative in taking possession of the land.”
***
*************** ************

40. In Narayan Bhagde case one of the arguments raised by the
landowner was that as per the communication of the
Commissioner the land was still with the landowner and
possession thereof had not been taken. The Bench observed that
the letter was based on a misconception as the landowner had
re-entered the acquired land immediately after its possession had
been taken by the Government ignoring the scenario that he stood
divested of the possession, under Section 16 of the Act. This Court
observed as under: (Narayan Bhagde case, SCC p. 712, para 29)
“29. … This was plainly erroneous view, for the legal position is
clear that even if the appellant entered upon the land and
resumed possession of it the very next moment after the land was
actually taken possession of and became vested in the
Government, such act on the part of the appellant did not have
the effect of obliterating the consequences of vesting.”
To our mind, therefore, even assuming that the appellant had re-

entered the land on account of the various interim orders granted
by the courts, or even otherwise, it would have no effect for two
reasons,
(1) that the suits/petitions were ultimately dismissed and

95 (2009) 10 SCC 501
121

(2) that the land once having vested in the Government by
virtue of Section 16 of the Act, re-entry by the landowner would
not obliterate the consequences of vesting.”

This court stated, in Leelawanti & Ors. v. State of Haryana & Ors96 thus:

“19. If Para 493 is read in the manner suggested by the learned
counsel for the appellants then in all the cases the acquired land
will have to be returned to the owners irrespective of the time gap
between the date of acquisition and the date on which the
purpose of acquisition specified in Section 4 is achieved and the
Government will not be free to use the acquired land for any other
public purpose. Such an interpretation would also be contrary to
the language of Section 16 of the Act, in terms of which the
acquired land vests in the State Government free from all
encumbrances and the law laid down by this Court that the lands
acquired for a particular public purpose can be utilised for any
other public purpose.

***

22. The approach adopted by the High Court is consistent with
the law laid down by this Court in State of Kerala v. M.
Bhaskaran Pillai
, (1997) 5 SCC 432 and Govt. of A.P. v. Syed
Akbar
, (2005) 1 SCC 558. In the first of these cases, the Court
considered the validity of an executive order passed by the
Government for assignment of land to the erstwhile owners and
observed: (M. Bhaskaran Pillai case, SCC p. 433, para 4)
“4. In view of the admitted position that the land in question was
acquired under the Land Acquisition Act, LA by operation of
Section 16 of the Land Acquisition Act, it stood vested in the State
free from all encumbrances. The question emerges whether the
Government can assign the land to the erstwhile owners? It is
settled law that if the land is acquired for a public purpose, after
the public purpose was achieved, the rest of the land could be
used for any other public purpose. In case there is no other public
purpose for which the land is needed, then instead of disposal by
way of sale to the erstwhile owner, the land should be put to
public auction and the amount fetched in the public auction can
be better utilised for the public purpose envisaged in the Directive
Principles of the Constitution. In the present case, what we find
is that the executive order is not in consonance with the provision
of the Act and is, therefore, invalid. Under these circumstances,
the Division Bench is well justified in declaring the executive
order as invalid. Whatever assignment is made, should be for a
public purpose. Otherwise, the land of the Government should be
sold only through the public auctions so that the public also gets
benefited by getting a higher value.”
***

24. For the reasons stated above, we hold that the appellants
have failed to make out a case for issue of a mandamus to the
respondents to release the acquired land in their favour. In the
result, the appeal is dismissed without any order as to costs.”

(emphasis supplied)

96 (2012) 1 SCC 66
122

129. Section 31 of the Act of 1894 is in pari materia with the provisions

Section 77 of the Act of 2013; Section 34 (of the Act of1894) is pari

materia with Section 80 of the Act of 2013. Section 77 of the Act of 2013

deals with payment of compensation or deposit of the same in the

Authority. Section 77 is reproduced hereunder:

“77. Payment of compensation or deposit of same in Authority.–
(1) On making an award under section 30, the Collector shall
tender payment of the compensation awarded by him to the
persons interested entitled thereto according to the award and
shall pay it to them by depositing the amount in their bank
accounts unless prevented by some one or more of the
contingencies mentioned in sub-section (2).

(2) If the person entitled to compensation shall not consent to
receive it, or if there be no person competent to alienate the land,
or if there be any dispute as to the title to receive the
compensation or as to the apportionment of it, the Collector shall
deposit the amount of the compensation in the Authority to which
a reference under section 64 would be submitted:

Provided that any person admitted to be interested may receive
such payment under protest as to the sufficiency of the amount:

Provided further that no person who has received the amount
otherwise than under protest shall be entitled to make any
application under sub-section (1) of section 64:

Provided also that nothing herein contained shall affect the
liability of any person, who may receive the whole or any part of
any compensation awarded under this Act, to pay the same to
the person lawfully entitled thereto.”

130. The Collector has to tender payment under Section 77(1) and to

pay the persons interested by depositing the amount in their bank

accounts unless prevented under Section 77(2) which are the same

contingencies as provided in Section 31(2) mentioned above. Section 80

of the Act of 2013 is pari materia to Section 34 of the Act of 1894, is

reproduced hereunder:

123

“80. Payment of interest.–When the amount of such compensation
is not paid or deposited on or before taking possession of the
land, the Collector shall pay the amount awarded with interest
thereon at the rate of nine per cent, per annum from the time of
so taking possession until it shall have been so paid or deposited:

Provided that if such compensation or any part thereof is not paid
or deposited within a period of one year from the date on which
possession is taken, interest at the rate of fifteen per cent, per
annum shall be payable from the date or expiry of the said period
of one year on the amount of compensation or part thereof which
has not been paid or deposited before the date of such expiry.”

131. The provisions are identical concerning the rate of interest in case

there is a failure to make payment of compensation before taking

possession of the land. The award amount has to be paid @ 9% per

annum for the first year and after that @ 15% per annum.

132. Since the Act of 1894 never provide for the lapse in case the

compensation amount was not deposited, non-deposit carried higher

interest. The provisions under the new Act are identical: there is no

lapse of any acquisition proceeding by non-compliance with Section 77.

Interpreting “or” under Section 24(2) of the Act of 2013 disjunctively,

would result in an anomalous situation – because, once compensation

has been paid to the landowner, there is no provision for its refund. It

was fairly conceded on behalf of the landowners that they must return

the compensation in the case of lapse if possession has not been taken.

In case possession is with the landowner and compensation has been

paid, according to landowners’ submission, there is deemed lapse under

Section 24(2) by reading the word “or” disjunctively. It would then be

open to the State Government to withdraw the money deposited in the

Reference Court. It was also submitted that it is inherent in the notion
124

of lapse that the State may recover the compensation on the ground of

restitution. In our opinion, the submissions cannot be accepted as an

anomalous result would occur. In case physical possession is with the

landowner; and compensation has been paid, there is no provision in the

Act for disgorging out the benefit of compensation. In the absence of any

provision for refund in the Act of 2013, the State cannot recover

compensation paid. The landowner would be unjustly enriched. This

could never have been the legislative intent of enacting Section 24(2) of

the Act of 2013. The principle of restitution, unless provided in the Act,

cannot be resorted to by the authorities on their own. The absence of

provision for refund in the Act of 2013 reinforces our conclusion that

the word “or” has to be read as conjunctively and has to be read as

“and.” The landowners’ argument about the State’s ability to recover

such amounts, in the absence of any provision, by relying on the

principle of restitution, is without merit, because firstly such principle

is without any legal sanction. The State would have to resort to the

remedy of a suit, which can potentially result in litigation of enormous

proportions; besides, the landowners can well argue that the property

(i.e. the amounts) legally belonged to them and that the limitation for

claiming it back would have expired. Several other potential defences

would be available, each of which would result in multifarious litigation.

Therefore, the contention is ex-facie untenable and insubstantial.
125

133. It was submitted that in the case State had taken possession

without paying compensation as required under the Act of 1894, there

cannot be absolute vesting free from all encumbrances under Section

16. It is clear that vesting under Section 16 of the Act of 1894 does not

depend upon payment of compensation. Vesting takes place as soon as

possession is taken after the passing of the award. Undoubtedly,

compensation has also to be paid. For that, provisions have been made

in Sections 31 and 34 of the Act of 1894. Section 31(1) requires tender

and payment, which is making the money available to the landowner

and in case State is prevented: i.e., in case the landowner does not

consent to receive it for three other exigencies provided in Section 31(2),

the amount has to be deposited in the court. Deposit in the court

absolves the Government of liability to make payment of interest.

However, if payment is not tendered under Section 31(1) nor deposited

in court as envisaged under Section 31(2) from the date of taking

possession, the interest for the first year is 9% and thereafter 15% per

annum follows. The effect of vesting, under no circumstance, is taken

away due to non-compliance of Section 31(1) or 31(2) as the case may

be as the payment is secured along with interest under the provisions

of Section 34 read with Section 31. The State cannot be asked to restore

possession once taken but in case it fails to make deposit under Section

31(3) or otherwise with respect to majority of the landholdings, in that

exigency, all the beneficiaries as on the date of notification under
126

Section 4 shall be entitled to higher compensation under the Act of 2013

and there would be no lapse in that case.

134. The landowners had complained that in some cases, under

various schemes, close to 80% of the compensation amount was not

handed over to the concerned Collector. It was also submitted that in

some of the schemes, 50% beneficiaries, for whose benefit the land had

been acquired, had not paid even a single rupee. Since this Court is not

deciding individual cases here, what is the effect of the interpretation of

the law, in the light of this decision, has to be considered in each and

every case. We refrain from commenting on the merits of the said

submissions as we are not deciding the cases on merits in the reference

made to us. Various aspects may arise on the merits of the case as the

schemes were framed at different points of time and the dates of

notifications under Section 4 issued thereunder, whether there is one

or different notifications and various other attendant circumstances

have to be looked into like whether possession has been taken or not,

to what extent compensation has been paid and whether proviso to

Section 24(2) is attracted for the benefits of those entitled to it. In case

there is failure to deposit the compensation with respect to the majority

of the holdings, the facts have to be gauged in individual cases and then

decided.

127

In re: Vesting and divesting

135. In Satendra Prasad Jain & Ors. v. State of U.P & Ors97, the concept

of vesting under the Act of 1894 had been taken into consideration. The

Government cannot withdraw from acquisition under Section 48, once

it has taken the possession. This Court has observed that once

possession has been taken under Section 17(1), prior to the making of

the award, the owner is divested of the title to the land, which is vested

in the Government and there is no provision by which land can be

reverted to the owner. This Court has observed thus:

“14. There are two judgments of this Court, which we must note.
In Rajasthan Housing Board v. Shri Kishan, (1993) 2 SCC 84 it
was held that the Government could not withdraw from
acquisition under Section 48 once it had taken possession of the
land. In Lt. Governor of H.P. v. Avinash Sharma, (1970) 2 SCC
149 it was held that: (SCC p. 152, para 8)
“… after possession has been taken pursuant to a notification
under Section 17(1) the land is vested in the Government, and the
notification cannot be cancelled under Section 21 of the General
Clauses Act, nor can the notification be withdrawn in exercise of
the powers under Section 48 of the Land Acquisition Act. Any
other view would enable the State Government to circumvent the
specific provision by relying upon a general power. When
possession of the land is taken under Section 17(1), the land
vests in the Government. There is no provision by which land
statutorily vested in the Government reverts to the original owner
by mere cancellation of the notification.”

15. Ordinarily, the Government can take possession of the land
proposed to be acquired only after an award of compensation in
respect thereof has been made under Section 11. Upon the taking
of possession the land vests in the Government, that is to say,
the owner of the land loses to the Government the title to it. This
is what Section 16 states. The provisions of Section 11-A are
intended to benefit the landowner and ensure that the award is
made within a period of two years from the date of the Section 6
declaration. In the ordinary case, therefore, when Government
fails to make an award within two years of the declaration under
Section 6, the land has still not vested in the Government and its
title remains with the owner, the acquisition proceedings are still
pending and, by virtue of the provisions of Section 11-A, lapse.

When Section 17(1) is applied by reason of urgency, Government
takes possession of the land prior to the making of the award

97 (1993) 4 SCC 369
128

under Section 11 and thereupon the owner is divested of the title
to the land which is vested in the Government. Section 17(1)
states so in unmistakable terms. Clearly, Section 11-A can have
no application to cases of acquisitions under Section 17 because
the lands have already vested in the Government and there is no
provision in the said Act by which land statutorily vested in the
Government can revert to the owner.”
(emphasis supplied)

This Court further observed in Satendra Prasad Jain (supra) that

even if compensation was not paid to the appellant under Section 17(3-

A), it could not be said that possession was taken illegally. Vesting is

absolute. This Court has observed thus:

“17. In the instant case, even that 80 per cent of the estimated
compensation was not paid to the appellants although Section
17
(3-A) required that it should have been paid before possession
of the said land was taken but that does not mean that the
possession was taken illegally or that the said land did not
thereupon vest in the first respondent. It is, at any rate, not open
to the third respondent, who, as the letter of the Special Land
Acquisition Officer dated June 27, 1990 shows, failed to make
the necessary monies available and who has been in occupation
of the said land ever since its possession was taken, to urge that
the possession was taken illegally and that, therefore, the said
land has not vested in the first respondent and the first
respondent is under no obligation to make an award.”
(emphasis supplied)

136. In Tika Ram and Ors. v. State of Uttar Pradesh & Ors. 98, the

question considered was in case possession is taken, and compensation

is not paid, what is the effect? This Court has held that there is no

lapse of acquisition and observed thus:

“91. However, the question is as to what happens when such
payment is not made and the possession is taken. Can the whole
acquisition be set at naught?

92. In our opinion, this contention on the part of the appellants is
also incorrect. If we find fault with the whole acquisition process
on account of the non-payment of 80% of the compensation, then
the further question would be as to whether the estimation of 80%
of compensation is correct or not. A further controversy can then
be raised by the landlords that what was paid was not 80% and

98 (2009) 10 SCC 689
129

was short of 80% and therefore, the acquisition should be set at
naught. Such extreme interpretation cannot be afforded because
indeed under Section 17 itself, the basic idea of avoiding the
enquiry under Section 5-A is in view of the urgent need on the
part of the State Government for the land to be acquired for any
eventuality discovered by either sub-section (1) or sub-section (2)
of Section 17 of the Act.

93. The only question that would remain is that of the estimation
of the compensation. In our considered view, even if the
compensation is not paid or is short of 80%, the acquisition would
not suffer. One could imagine the unreasonableness of the
situation. Now suppose, there is state of emergency as
contemplated in Section 17(2) of the Act and the compensation is
not given, could the whole acquisition come to a naught? It would
entail serious consequences.

***

95. Further, in a judgment of this Court in Pratap v. State of
Rajasthan
, (1996) 3 SCC 1 a similar view was reported. That was
a case under the Rajasthan Urban Improvement Act, 1987, under
which the acquisition was made using Section 17 of the Act. The
Court took the view that once the possession was taken under
Section 17 of the Act, the Government could not withdraw from
that position under Section 18 and even the provisions of Section
11-A
were not attracted. That was of course a case where the
award was not passed under Section 11-A after taking of the
possession. A clear-cut observation came to be made in that
behalf in para 12, to the effect that the non-compliance with
Section 17 of the Act, insofar as, payment of compensation is
concerned, did not result in lapsing of the land acquisition
proceedings. The law laid down by this Court in Satendra Prasad
Jain v. State of U.P
., (1993) 4 SCC 369 was approved. The Court
also relied on the decision in P. Chinnanna v. State of A.P., (1994)
5 SCC 486 and Awadh Bihari Yadav v. State of Bihar, (1995) 6
SCC 31 where similar view was taken regarding the land
acquisition proceedings not getting lapsed. The only result that
may follow by the non-payment would be the payment of interest,
as contemplated in Section 34 and the proviso added thereto by
the 1984 Act. In that view, we do not wish to further refer the
matter, as suggested by Shri Trivedi, learned Senior Counsel and
Shri Qamar Ahmad, learned counsel for the appellants.
Therefore, even on the sixth question, there is no necessity of any
reference.”
(emphasis supplied)

It has further been observed that the only result that may follow

by the non-payment would be the payment of interest as contemplated

in Section 34 of the Act of 1894.

130

137. In Pratap & Anr. v. State of Rajasthan & Ors99, this Court held that

when the possession of land is taken under Section 17(1), the land vests

absolutely in the Government free from all encumbrances and the

Government cannot withdraw from acquisition under Section 48 and

provisions of Section 11-A of passing the award within two years were

not attracted. The proceedings would not lapse on failure to make an

award within the period prescribed under Section 11-A, once possession

had been taken. The part payment of compensation would also not

render the possession illegal. This Court observed thus:

“12. The provisions of sub-section (4) of Section 52 are somewhat
similar to Section 17 of the Land Acquisition Act, LA. Just as the
publication of a notification under Section 52(1) vests the land in
the State, free from all encumbrances, as provided by Section
52(4)
, similarly when possession of land is taken under Section
17(1)
the land vests absolutely in the Government free from all
encumbrances. A question arose before this Court that if there is
a non-compliance with the provisions of Section 5-A and an
award is not made in respect to the land so acquired, would the
acquisition proceedings lapse. In Satendra Prasad Jain v. State
of U.P
., (1993) 4 SCC 369 this Court held that once possession
had been taken under Section 17(1) and the land vested in the
Government then the Government could not withdraw from
acquisition under Section 48 and the provisions of Section 11-A
were not attracted and, therefore, the acquisition proceedings
would not lapse on failure to make an award within the period
prescribed therein. It was further held that non-compliance of
Section 17(3-A), regarding part payment of compensation before
taking possession, would also not render the possession illegal
and entitle the Government to withdraw from acquisition. The
aforesaid principle has been reiterated by this Court in P.
Chinnanna v. State of A.P
., (1994) 5 SCC 486 and Awadh Bihari
Yadav v. State of Bihar
, (1995) 6 SCC 31. In view of the aforesaid
ratio it follows that the provisions of Section 11-A are not
attracted in the present case and even if it be assumed that the
award has not been passed within the stipulated period, the
acquisition of land does not come to an end.

(emphasis supplied)”

99 (1996) 3 SCC 1
131

138. In Awadh Bihari Yadav & Ors. v. State of Bihar & Ors100, question

was raised with respect to the lapse of acquisition proceedings in view

of the provisions contained in Section 11-A as award had not been made

within 2 years from the date of commencement of the Land Acquisition

Amendment Act, 1984. Possession had been taken by the Government

under Section 17(1). It was held that it was not open to the Government

to withdraw from the acquisition. Provisions of Section 11-A was not

attracted. Following is the relevant portion of the observations made by

this Court:

“8. ..It was contended that in view of Section 11-A of the Act the
entire land acquisition proceedings lapsed as no award under
Section 11 had been made within 2 years from the date of
commencement of the Land Acquisition Amendment Act, 1984.
We are of the view that the above plea has no force. In this case,
the Government had taken possession of the land in question
under Section 17(1) of the Act. It is not open to the Government to
withdraw from the acquisition (Section 48 of the Act). In such a
case, Section 11-A of the Act is not attracted and the acquisition
proceedings would not lapse, even if it is assumed that no award
was made within the period prescribed by Section 11-A of the Act.
….”

139. In P. Chinnanna & Ors. v. State of A.P. & Ors. 101 question again

arose with respect to possession taken under Section 17(1) invoking

urgency clause, this Court has held that once possession is taken, there

is absolute vesting and subsequent proceedings were void. This Court

stated as follows:

“10. The said provision enables the appropriate Government to
take possession of the land concerned on the expiration of 15
days from the publication of the notice mentioned in Section 9
sub-section (1) notwithstanding the fact that no award has been
made in respect of it. When the possession of the land concerned
is once taken as provided for thereunder such land is made to

100 (1995) 6 SCC 31
101 (1994) 5 SCC 486
132

vest absolutely in the Government free from all encumbrances. It
must be noted here that taking possession of the land concerned
and its vesting absolutely in the Government free from all
encumbrances does not depend upon an award to be made under
Section 11, making of which award alone in the case of ordinary
acquisition of land could have empowered the Collector to take
possession of the land under Section 16 and the taking of which
possession would have made the land vest absolutely in the
Government free from all encumbrances. As seen from the
judgment dated 23-8-1982 of the High Court in WP No. 3416 of
1978, taking possession of the appellants’ land along with land
of others by the Collector on 10-7-1978 under Section 17(1) is, in
fact, made the basis for its holding that invoking of urgency
clause to dispense with Section 5-A enquiry was made by the
Government mechanically. No doubt, when the High Court took
the view that acquisition of the land concerned under Section 17
of the Act was made pursuant to an order of the Government
without application of its mind in the matter of making Section 5-

A not to apply, it was open to it to set aside or quash the
subsequent acquisition proceedings except Section 4(1)
notification which had followed and restore the ownership of the
land to the appellants’ land if it had to order fresh enquiry on the
basis of Section 4(1) notification. Such a setting aside or quashing
was inevitable because the acquisition proceedings had been
completed under Section 17 and the land had vested in the State
Government, inasmuch as, without setting aside that vesting of
the land in the State Government and restoring the land to the
appellant-owners, that land was unavailable for subsequent
acquisition by following the procedure under Section 5-A, Section
6
, Section 11 and Section 16. Thus in the circumstances of the
case in respect of the land of the appellants, when publication of
Section 4(1) notification was made on 21-7-1977, when
declaration under Section 6 was published on 21-7-1977 and
taking possession of that land under Section 17(1) by the
Collector was made on 10-7-1978 and the vesting in the State
Government of that land had occurred on that day, setting aside
by the judgment of the High Court in WP No. 3416 of 1978 of
merely the direction given by the Government relating to non-
applicability of Section 5-A to the land, given on 7-7-1977, in our
view, did not enable to Court to order the starting of fresh
proceedings for acquisition of the land concerned under Section
5-A
, inasmuch as, that land concerned on Section 4(1) notification
had already become the land of the Government. In this state of
facts, when the previous acquisition of the land of the appellants
made under Section 17 of the Act did never stood affected.
Section 5-A enquiry held and subsequent declaration made were
superfluous proceedings which were inconsequential. Hence, we
feel that there is no need to set aside the impugned declaration
inasmuch as the earlier acquisition was complete and had
resulted in vesting of the land in the State Government and there
was no land available for acquisition in the subsequent
proceedings which have been carried pursuant to the judgment
of the High Court made in WP No. 3416 of 1978. Therefore, in the
stated facts, although we find that no need arises to declare the
impugned declaration as void we clarify that the earlier
proceedings which had taken place in respect of the appellants’
133

land, resulting in its vesting in the State Government free from
encumbrances, has stood unaffected and any award made by
the Collector or be made by him under the L.A. Act shall be
regarded as that based on earlier acquisition proceedings.”

140. In May George v. Special Tahsildar & Ors.102, this Court considered

the question to declare a provision mandatory, test is to be applied as

to whether non-compliance of the provision could render entire

proceedings invalid or not. This Court referred to various decisions

(which are referred to in the footnote103) and summarized the position

thus:

“24. In Gullipilli Sowria Raj v. Bandaru Pavani, (2009) 1 SCC
714, this Court while dealing with a similar issue held as under
(SCC p. 719, para 17)
“17. … The expression ‘may’ used in the opening words of
Section 5 is not directory, as has been sought to be argued, but
mandatory and non-fulfilment thereof would not permit a
marriage under the Act between two Hindus. Section 7 of the
1955 Act is to be read along with Section 5 in that a Hindu
marriage, as understood under Section 5, could be solemnised
according to the ceremonies indicated therein.”

25. The law on this issue can be summarised to the effect that in
order to declare a provision mandatory, the test to be applied is
as to whether non-compliance with the provision could render the
entire proceedings invalid or not. Whether the provision is
mandatory or directory, depends upon the intent of the legislature
and not upon the language for which the intent is clothed. The
issue is to be examined having regard to the context, subject-
matter and object of the statutory provisions in question. The
Court may find out as to what would be the consequence which
would flow from construing it in one way or the other and as to
whether the statute provides for a contingency of the non-
compliance with the provisions and as to whether the non-

compliance is visited by small penalty or serious consequence

102(2010) 13 SCC 98
103Dattatraya Moreshwar v. The State of Bombay and Ors., AIR 1952 SC 181; State of U.P.
and Ors. v. Babu Ram Upadhya
, AIR 1961 SC 751; Raza Buland Sugar Co. Ltd., Rampur v.
Municipal Board, Rampur
, AIR 1965 SC 895;State of Mysore v. V.K. Kangan, AIR 1975 SC
2190; Sharif-Ud-Din v. Abdul Gani Lone, AIR 1980 SC 303; Balwant Singh and Ors. v. Anand
Kumar Sharma
and Ors., (2003) 3 SCC 433; Bhavnagar University v. Palitana Sugar Mill Pvt.
Ltd. and Ors
., AIR 2003 SC 511; Chandrika Prasad Yadav v. State of Bihar and Ors., AIR 2004
SC 2036; M/s. Rubber House v. Excellsior Needle Industries Pvt. Ltd., AIR 1989 SC 1160; B.S.
Khurana and Ors. v. Municipal Corporation of Delhi and Ors
., (2000) 7 SCC 679; State of
Haryana and Anr. v. RaghubirDayal, (1995) 1 SCC 133; and GullipilliSowria Raj v. Bandaru
Pavani @ Gullipili Pavani
, (2009) 1 SCC 714
134

would flow therefrom and as to whether a particular
interpretation would defeat or frustrate the legislation and if the
provision is mandatory, the act done in breach thereof will be
invalid.

***

27. In G.H. Grant (Dr.) v. State of Bihar, AIR 1966 SC 237, this
Court has held that if a “person interested” is aggrieved by the
fact that some other person has withdrawn the compensation of
his land, he may resort to the procedure prescribed under the Act
or agitate the dispute in suit for making the recovery of the award
amount from such person.”
(emphasis supplied)

141. This Court opined, therefore, that once the land vests in the State,

it cannot be divested, even if there is some irregularity in the acquisition

proceedings. There is nothing in the Act of 1894 to show that non-

compliance thereof will be fatal or will lead to any penalty.

142. Now, coming back to the main issue, the legal fiction of lapsing

(under Section 24(2) of the Act of 2013) cannot be extended to denude

title which has already vested in the beneficiaries of the acquisition

Corporation/Local Bodies, etc., and who, in turn, have also conveyed

title and transferred the land to some other persons after development.

In Commissioner of Sales Tax, U.P. v. Modi Sugar Mills 104 the Court has

held that “A legal fiction must be limited to the purpose for which it has

been created and cannot be extended beyond its legitimate field.”

Similarly, in Braithwaite & Co. v. E.S.I.C105 , this Court held that a legal

fiction is adopted in law for a limited and definite purpose only and there

is no justification for extending it beyond the purpose for which the

legislature has adopted. Lapsing is provided only where possession has

104 1961 (2) SCR 189
105 1968 (1) SCR 771
135

not been taken nor compensation has been paid, divesting of vested

land is not intended nor specifically provided.

143. Black’s Law Dictionary defines “vested” as follows:

“vested, adj. (18c) Having become a completed, consummated
right for present or future enjoyment; not contingent;
unconditional; absolute a vested interest in the estate.
“Unfortunately, the word ‘vested’ is used in two senses. Firstly,
an interest may be vested in possession, when there is a right to
present enjoyment, e.g. when I own and occupy Blackacre. But
an interest may be vested, even where it does not carry a right to
immediate possession if it does confer a fixed right of taking
possession in the future.” George Whitecross Paton, A Textbook
of Jurisprudence 305 (CW. Paton & David P. Derham eds., 4th
ed. 1972).

“A future interest is vested if it meets two requirements: first, that
there be no condition precedent to the interest’s becoming a
present estate other than the natural expiration of those estates
that are prior to it in possession; and second, that it be
theoretically possible to identify who would get the right to
possession if the interest should become a present estate at any
time.” Thomas F. Bergin 8. Paul C. Haskell, Preface to Estates in
Land and Future Interests 66-67 (2d ed. 1984).”

144. In Webster’s Dictionary, ‘vested’ is defined as:

“vested adj. [pp. of vest] 1. Clothed; robed, especially in church
vestments. 2. in law, fixed; settled; absolute; not contingent upon
anything: as, a vested interest.”

145. In State of Punjab v. Sadhu Ram106, it has been observed that once

possession is taken and the award has been passed, no title remains

with the landowner and the land cannot be de-notified under Section

48(1) and observed thus:

“3. The learned Judge having noticed the procedure prescribed in
disposal of the land acquired by the Government for public
purposes, has held that the said procedure was not followed for
surrendering the land to the erstwhile owners. The respondent

106 1996 (7) JT 118
136

having purchased the land had improved upon the land and is,
therefore, entitled to be an equitable owner of the land. We wholly
fail to appreciate the view taken by the High Court. The learned
Judge had net referred to the relevant provisions of the Act and
law. It is an undisputed fact that consequent upon the passing of
the award under Section 11 and possession taken of the land, by
operation of Section 16 of the Act, the right, title and interest of
the erstwhile owner stood extinguished and the Government
became absolute owner of the property free from all
encumbrances. Thereby, no one has nor claimed any right, title
and interest in respect of the acquired land. Before the possession
could be taken, the Government have power under Section 48(1)
of the Act to denotify the land. In that event, land is required to
be surrendered to the erstwhile owners. That is not the case on
the facts of this case. Under these circumstances, the Government
having become the absolute owner of the property free from all
encumbrances, unless the title is conferred on any person in
accordance with a procedure known to law, no one can claim any
title much less equitable title by remaining in possession. The trial
Court as well as the appellate Court negative the plea of the
respondent that he was inducted into possession as a lessee for
a period of 20 years. On the other hand, the finding was that he
was in possession as a lessee on yearly basis. Having lawfully
come into possession as a lessee of the Government, Session 116
of Evidence Act estops him from denying title of the Government
and set it up in third party. By disclaiming Government title, he
forfeited even the annual lease. Under these circumstances,
having come into possession as a lessee, after expiry and
forfeiture of the lease, he has no right. Illegal and unlawful
possession of the land entails payment of damages to the
Government.”

146. In Star Wire (India) Ltd. v. State of Haryana & Ors 107, it was

observed that once the award has been passed and possession has been

taken, the land vests in the State free from all encumbrances. This

Court held thus:

“2. This special leave petition arises from the judgment of the
Punjab and Haryana High Court made on 25-4-1996 in LPA No.
437 of 1996. Notification under Section 4(1) of the Land
Acquisition Act, LA (for short, ‘the Act’) was published on 1-6-

1976. Declaration under Section 6 of the Act was published on
16-2-1977. The award was passed on 3-7-1981. Thereafter, the
reference also become final. The petitioner has challenged the
notification, the declaration, and the award as illegal. It contends
that the award does not come in the way of the petitioner in filing
the writ petition on 21-1-1994. The High Court has dismissed the
writ petition on the grounds of laches.”

107 (1996) 11 SCC 698
137

147. A similar view has been taken in Market Committee v. Krishan

Murari108 and Puttu Lal (dead) by L.Rs. v. State of U.P. & Anr 109. The

concept of ‘vesting’ was also considered in The Fruit & Vegetable

Merchants Union v. The Delhi Improvement Trust110. Once vesting takes

place, and is with possession, after which a person who remains in

possession is only a trespasser, not in rightful possession and vesting

contemplates absolute title, possession in the State. This court

observed thus:

“(19) That the word “vest” is a word of variable import is shown
by provisions of Indian statutes also. For example, S. 56 of the
Provincial Insolvency Act (5 of 1920) empowers the Court at the
time of the making of the order of adjudication or thereafter to
appoint a receiver for the property of the insolvent and further
provides that “such property shall thereupon vest in such
receiver”. The property vests in the receiver for the purpose of
administering the estate of the insolvent for the payment of his
debts after realising his assets. The property of the insolvent
vests in the receiver not for all purposes but only for the purpose
of the Insolvency Act and the receiver has no interest of his own
in the property. On the other hand, Ss. 16 and 17 of the Land
Acquisition Act
(Act 1 of LA), provide that the property so acquired,
upon the happening of certain events, shall “vest absolutely in
the Government free from all encumbrances”. In the cases
contemplated by Ss. 16 and 17 the property acquired becomes
the property of Government without any conditions or limitations
either as to title or possession. The legislature has made it clear
that the vesting of the property is not for any limited purpose or
limited duration. It would thus appear that the word “vest” has
not got a fixed connotation meaning in all cases that the property
is owned by the person or the authority in whom it vests. It may
vest in title, or it may vest in possession, or it may vest in a limited
sense, as indicated in the context in which it may have been used
in a particular piece of legislation. The provisions of the
Improvement Act, particularly Ss. 45 to 49 and 54 and 54-A when
they speak of a certain building or street or square or other land
vesting in a municipality or other local body or in a trust, do not
necessarily mean that ownership has passed to any of them.”

108 (1996) 1 SCC 311
109 (1996) 3 SCC 99
110 1957 SCR 01
138

In re: Vested rights under Section 24 of the Act of 2013

148. This Court is of opinion that Section 24 of the Act of 2013 does

not intend to take away vested rights. This is because there is no specific

provision taking away or divesting title to the land, which had originally

vested with the State, or divesting the title or interest of beneficiaries or

third-party transferees of such land which they had lawfully acquired,

through sales or transfers. There is a specific provision made for

divesting, nor does the Act of 2013 by necessary intendment, imply

such a drastic consequence. Divesting cannot be said to have been

intended. Here, the decision in VKNM Vocational Higher Secondary

School v. State of Kerala111 is relevant; it was observed as follows by this

Court:

“21. In our considered view, the above principles laid down by
the Constitution Bench of this Court in Garikapati case will have
full application while considering the argument of the learned
Senior Counsel for the fifth respondent claiming a vested right by
relying upon unamended Rule 7-A(3). Principles (i), (iii), (iv) and

(v) of the said judgment are apposite to the case on hand. When
we make a comprehensive reference to the above principles, it
can be said that for the legal pursuit of a remedy it must be shown
that the various stages of such remedy are formed into a chain or
rather as series of it, which are connected by an intrinsic unity
which can be called as one proceeding, that such vested right, if
any, should have its origin in a proceeding which was instituted
on such right having been crystallised at the time of its origin
itself, in which event all future claims on that basis to be pursued
would get preserved till the said right is to be ultimately
examined. In the event of such preservation of the future remedy
having come into existence and got crystallised, that would date
back to the date of origin when the so-called vested right
commenced, that then and then only it can be held that the said
right became a vested right and it is not defeated by the law that
prevails at the date of its decision or at the date of subsequent
filing of the claim. One other fundamental principle laid down
which is to be borne in mind, is that even such a vested right can
also be taken away by a subsequent enactment if such
subsequent enactment specifically provides by express words or
by necessary intendment. In other words, in the event of the

111 (2016) 4 SCC 216
139

extinction of any such right by express provision in the
subsequent enactment, the same would lose its value.”

149. The decision in State of Haryana v. Hindustan Construction Co.

Ltd112, is relied upon to contend that the line of enquiry is not to enquire

if the new enactment has by its new provisions kept alive the rights and

liabilities under the repealed law or whether it has taken away those

rights and liabilities. When repeal is followed by a fresh enactment on

the same subject, the provisions of the General Clauses Act would

undoubtedly require an examination of the language of the new

enactment if it expresses an intent different from the earlier repealed

Act. The enquiry would necessitate the examination if the old rights

and liabilities are kept alive or whether the new Act manifests an

intention to do away with or destroy them. If the new Act manifests

different intentions, the application of the General Clauses Act will

stand excluded.

150. We have examined the provisions of Section 24 of the Act of 2013

in the light of the said pleas and thereafter arrived at our conclusions

as to when and to what extent proceedings lapsed or/and were saved

and what liabilities have been taken away and to what extent there is

obliteration of the rights acquired and liabilities incurred earlier under

the Act of 1894 and what is done away or destroyed by the new Act.

112 (2017) 9 SCC 463
140

151. The Section 24(2) of the Act of 2013 is to be interpreted consistent

with the legislative intent, particularly when it has provided for the lapse

of the proceedings. It has to be interpreted in the light of provisions

made in Sections 24 and 114 of the Act of 2013 and Section 6 of the

General Clauses Act, what it protects and to what extent it takes away

the rights of the parties. Undoubtedly, Section 24(2) has retroactive

operation with respect to the acquisitions initiated under the Act of

1894 and which are not completed by taking possession nor

compensation has been paid in spite of lapse of 5 years and proceedings

are kept pending due to lethargy of the officials. The drastic

consequences follow by the provisions contained in Section 24(2) in

such cases.

152. For considering the legislative intent, Bennion, Statutory

Interpretation, 5th Edition (2012) has been referred to, in which it has

been observed:

“Where, on a weighing of the factors, it seems that some
retrospective effect was intended, the general presumption
against retrospectively indicates that this should be kept to as
narrow a compass as will accord with the legislative intention.

Principle against doubtful penalisation. It is a general principle
of legal policy that no one should suffer detriment by the
application of a doubtful law. The general presumption against
retrospectivity means that where one of the possible opposing
constructions of an enactment would impose an ex post facto law,
that construction is likely to be doubtful.

….

If the construction also inflicts a detriment, that is a second factor
against it. A retrospective enactment inflicts a detriment for this
purpose ‘if it takes away or impairs a vested right acquired under
existing laws, or creates a new obligation, or imposes a new duty,
or attaches a new disability, in regard to events already past.
The growing propensity of the courts to relate legal principle to
141

the concept of fairness was shown by Staughton LJ when he
said:

“In my judgment the true principle is that Parliament is presumed
not to have intended to alter the law applicable to past events
and transactions in a manner which is unfair to those concerned
in them, unless a contrary intention appears.””
(emphasis supplied)

It has been observed in Bennion, Statutory Interpretation, 5th

Edition (2012) that when Parliament is presumed not to have intended

to alter the law applicable to past events and transactions, which is

unfair to those concerned in them unless the contrary intention

appears.

153. Another decision in Lauri v. Renad113, has been referred to in

which it was observed that a statute is not to be construed so as to have

a greater retrospective operation than its language renders necessary.

Following observations have been relied upon:

“It certainly requires very clear and unmistakable language in a
subsequent Act of Parliament to revive or recreate an expired
right. It is a fundamental rule of English law that no statute shall
be construed so as to have a retrospective operation unless its
language is such as plainly to require such a construction; and
the same rule involves another and subordinate rule to the effect
that a statute is not to be construed so as to have a greater
retrospective operation than its language renders necessary.”
(emphasis supplied)

154. In Yamashita-Shinnihon Steamship Co. Ltd. (supra) the House of

Lords has observed that question of the extent of retrospectivity would

also be dependent upon the degree of unfairness it causes to the parties.

It has been observed:

113 (1892) 3 Ch. 402
142

“The rule that a person should not be held liable or punished for
conduct not criminal when committed is fundamental and of long
standing. It is reflected in the maxim nullum crimen nulla poena
sine lege. It is protected by article 7 of the European Convention
for the Protection of Human Rights and Fundamental Freedoms
(1953) (Cmd. 8969).

The rule also applies, but with less force, outside the criminal
sphere. It is again expressed in maxims, lex prospicit non respicit
and omnis nova constitutio futuris temporibus formam imponere
debet non praeteritis. The French Civil Code provides that “La loi
ne dipose que pour l’avenir; elle n’a point d’effet retroactif:”
…..

But both these passages draw attention to an important point,
that the exception only applies where application of it would not
cause unfairness or injustice. This is consistent with the general
rule or presumption which is itself based on considerations of
fairness and justice, as shown by the passage in Maxwell quoted,
ante, p. 494C-E, and recently emphasised by Staughton LJ in
Secretary of State for Social Security v. Tunnicliffe [1991] 2 All
E.R. 712, 724:

“In my judgment the true principle is that Parliament is presumed
not to have intended to alter the law applicable to past events
and transactions in a manner which is unfair to those concerned
in them, unless a contrary intention appears. It is not simply a
question of classifying an enactment as retrospective or not
retrospective. Rather it may well be a matter of degree – the
greater the unfairness, the more it is to be expected that
Parliament will make it clear if that is intended.”

The distinction between rights and procedure, and unfairness
and fairness, may well overlap. Thus, if a limitation period is
shortened but a plaintiff has time to sue before expiry of the
shortened period, he is likely to be statute-barred if he does not
sue within the shortened period (see The Ydun [1899] P. 236.);
but if a limitation period is extended after a previous shorter
limitation period has already expired, the plaintiff will be unable
to take advantage of the new period because an absolute defence
has by then accrued to the defendant and it would not be fair to
deprive him of it: See Yew Bon Tew v. Kenderaan Bas Mara
[1983] 1 A.C. 553 and Maxwell v. Murphy (1957) 96 C.L.R. 261.

Further, Lord Griffiths, Lord Goff of Chieveley and Lord Slynn of

Hadley, held as under:

“The principle governing the proper approach to a statutory
provision alleged to have retrospective effect has been stated in
a number of different ways, but no difference of substance is
revealed by the authorities. Thus:

(1) the principle has been described as “a prima facie rule of
construction” (Yew Bon Tew [1983] 1 A.C 553, 558F), “an
established principle in the construction of statutory provisions”

143

(Pearce v. Secretary of State for Defence [1988] A.C 755, 802C) or
“a fundamental rule of English law” (Lauri v. Renad [1892] 3 Ch.
402, 421, Maxwell on the Interpretation of Statutes, 12th ed., p.
215, cited with approval in Carson v. Carson and Stoyek [1964]
1 W.L.R 511, 516-517).

(2) The principle is that a statute or statutes will not be interpreted
so as to have a retrospective operation unless (i) “that result is
unavoidable on the language used” (Yew Bon Tew, at pp. 558F,
563D-E) or “that effect cannot be avoided without doing violence
to the language of the enactment: (In re Athlumney, Ex parte
Wilson [1898] 2 Q.B 547, 552) or “its language is such as plainly
to require such a construction” (Lauri v. Renad, at p. 421); or (ii)
“they expressly or by necessary implication to provide: see Yew
Bon Tew, at p. 558F” (Pearce v. Secretary of State for Defence
[1988] A.C 755, 802C-D) or “such a construction appears very
clearly in the terms of the Act, or arises by necessary and distinct
implication” (Maxwell on the Interpretation of Statutes, 12th ed.,
p.215]

(3) “if the enactment is expressed in language which is fairly
capable of either interpretation, it ought to be construed as
prospective only” (In re Athlumney, at p. 552).

(4) If the statute does have some retrospective operation on the
basis of the above principles, it is not to be construed as having
greater retrospective operation “than its language renders
necessary” (Lauri v. Renad, at p. 421) or “than is necessary to
give effect either to its clear language or to its manifest purpose”
(Arnold v. Central Electricity Generating Board [1988] A.C 228,

275.

The absence of express limiting words cannot be used as a basis
for implying retrospective operation. That would reverse the true
presumption. A necessary and distinct implication typically
arises in the context of a statute that, by repealing a previous
statute, would leave a “lacuna” in the law if the new statute were
not to be construed as having retrospective effect: see, e.g., Food
Corporation of India v. Marastro Compania Naviera S.A
. [1987] 1
W.L.R. 134, 152. The particular problem in the present case is a
transitional problem only, applicable only to those arbitrators that
are stale as at 1 January 1992, in respect of which applications
to strike out are made shortly thereafter. In the future, such
claimants will either continue to be dilatory or not, in which case
the references will proceed to a conclusion. The concern of the
legislature, and the mischief at which the section was aimed, was
not a limited number of existing stale arbitrations but future
arbitrations. Moreover, although the mischief at which the section
was aimed is not to be ignored, one should start by looking at the
words themselves: see Chebaro v. Chebaro [1987] Fam. 127,
130, 134-135.

It would be unfair to a claimant to give a retrospective operation
to section 13A. So far as claimants in existing arbitrations are
concerned, they may well have been (correctly) advised prior to 1
January 1992 that they could proceed slowly with the claim
without risk of having their claims dismissed by reason of such
delay. A retrospective application of the statute would expose
him to a penalty on the strength of conduct not susceptible to
penalty when committed. It would not, however, be unfair to a
respondent to limit section 13A to delay occurring after 1 January
144

1992. Even if such delay were causative of prejudice or the risk
of an unfair resolution of the dispute, under the existing law laid
down in Bremer Vulkan a respondent should have been aware
that it was a respondent’s obligation (as well as a claimant’s) to
seek directions from the arbitrator to ensure a speedy resolution
of disputes: see the Hannah Blumenthal case [1983] 1 A.C. 854,
923H. A retrospective alteration to the legitimate expectations of
the parties as to the consequences of their conduct at the time it
occurred would be contrary to the principles of legal and
commercial certainty that formed part of the grounds on which
the House of Lords declined in Hannah Blumenthal to depart from
Bermer Vulkan: see pp. 913C, 917D, 922H.”
(emphasis supplied)

155. Reliance was placed on Gloucester Union v. Woolwich Union114,

with respect to effect on existing rights wherein following observations

have been made:

“Before considering the legal effect of art. xxxi. of this Order it is
necessary, we think, to bear in mind that by the common law,
upon such a division of the parish of Upton St. Leonard’s, any
settlement already acquired in that parish would have been lost:

see Reg v. Tipton Inhabitants 3; Dorking Union v. St. Saviour’s
Union. The purpose and effect of par. 1 of art. xxxi is to get rid
of this difficulty and preserve the settlements that have been
already acquired before the commencement of the Order. The
purpose and effect of par. 2 is in like manner to preserve a status
of irremovability that has been acquired at that date; and the
question raised in this case is whether par. 3 of the article is to
be construed in all its generality as applicable to acts or
circumstances which have been done or occurred completely in
the past and before the commencement of the Order, so as to
create or confer a settlement where none existed before, or
whether, as the appellants contend, it is to be construed as
supplemental to pars. 1 and 2 and limited to the cases where
persons are in process of acquiring a settlement or status of
irremovability so as to preserve their inchoate rights. If the words
in par. 3 are construed without limitation, then, the residence of
the pauper at Chequer’s Row in Upton St. Leonard’s between
1893 and 1897 being deemed to be residence in Gloucester, a
settlement in Gloucester is conferred upon him and the
respondents succeed. We think this paragraph should be so
construed subject to the general principle that a statute is prima
facie prospective and does not interfere with existing rights
unless it contains clear words to that effect, or unless, having
regard to its object, it necessarily does so, and that a statute is
not to be construed to have a greater to retrospective operation
than its language renders necessary – see per Lindley LJ in Lauri
v. Renad – whatever view may be entertained of the probably
intention of the Legislature, unless some manifest absurdity or

114 (1917) 2 K.B. 374
145

inconsistency results from such construction; but we have come
to the conclusion that the construction of the paragraph
contended for by the respondents produces such a practical
inconsistency with par. 1 of the same article that it is necessary
to put some limitation upon it. If a person had resided before the
commencement of the Order for two years in that portion of the
parish of Upton St. Leonards’ which has been added to
Gloucester and for one year following in the portion which
remains the parish of Upton St. Leonard’s, he would by the latter
part of par.1 be deemed to have acquired a settlement in the
parish of Upton St. Leonard’s, but if par.3 is to be applied to such
a case his residence in the added portion of Upton St. Leonard’s
is to be deemed to have been residence in the parish of
Gloucester; and if so deemed, then he has not had three years’
consecutive residence in any one parish and has no settlement –
in other words, the effect of par.3 in such a case is to destroy the
settlement which is preserved by par.1 and to restore the common
law rule which is intended to be abolished. The same result
would follow in the converse case where the later period of
residence completing the three years in the old parish of Upton
St. Leonard’s is in the area which has been added to the parish
of Gloucester.”
(emphasis supplied)

156. In The King v. The General Commissioners of Income Tax for

Southampton115 it was observed:

“The language of the section shows clearly that Parliament
intended it to have a retrospective effect. The object was to
prevent loss to the revenue when Commissioners had acted who
were not, under the statutes, the right Commissioners to make
the charge, provided that it was made by the Commissioners for
the parish or place in which the person charged ordinarily
resided. That the section was retrospective in effect was not
disputed by Sir Robert Finlay, but he argued that the
retrospective operation is limited by the language of the section
and does not extend to a charge made in respect of profits derived
from foreign possessions or securities under s.108 of the Income
Tax Act
, 1842. In support of this argument he relied upon the
express reference in the first sub-section of s.32 to s.106, and
s.146 of the Income Tax Act, 1842, upon the omission of any
reference in this sub-section to s.108, and upon the repeal in sub-

s.2 of s.32 of s.108. He contended that if the Legislature had
meant to include s.108 in the first sub-section it would have
referred to it in express berms and would not merely have
repealed it by the second sub-section. In the first sub-section
mention is made of other sections of the Income Tax Acts, but not
of s.108. It must be taken, he argued, that Parliament had in
mind the difficulties created by s. 108, which were pointed out in
Aramayo’s Case by the House of Lords, and that Parliament
intended to remove these difficulties by the repeal of s.108 so as
to prevent its operation in future, but did not mean to change the

115 (1916) 2 K.B. 249, (1917) 2 K.B. 374
146

law as regards acts done before passing of the statute. The
question must depend upon the construction of the language of
s.32. The rules to be applied are well settled. It is a fundamental
rule of English law that enactments in a statute are generally to
be construed as prospective and intended to regulate future
conduct, but this rule is one of construction only and must yield
to the intention of the Legislature: Moon v. Durden, per Parke B.
It is also the law that a statute is not to be construed to have
greater retrospective operation than its language renders
necessary: Lauri v. Renad, per Lindley LJ to ascertain the
intention regard should be had to the general scope and purview
of the enactment, to the remedy sought to be applied, to the former
state of the law, and to what was in the contemplation of the
Legislature: Pardo v. Bingham per Lord Hatherly L.C”

(emphasis supplied)

157. In K.S. Paripoornan (supra), it was observed that in the case of

retrospective operation the Court has to consider the effect on existing

rights and obligations and for that purpose, the intention of the

legislature has to be ascertained as indicated in the statute itself. This

court observed that:

“66. The dictum of Lord Denman, C.J. in R. v. St. Mary,
Whitechapel
, (1848) 12 QB 120, 127 that a statute which is in its
direct operation prospective cannot properly be called a
retrospective statute because a part of the requisites for its action
is drawn from time antecedent to its passing, which has received
the approval of this Court, does not mean that a statute which is
otherwise retrospective in the sense that it takes away or impairs
any vested right acquired under existing laws or creates a new
obligation or imposes a new duty or attaches a new disability in
respect to transactions or considerations already past, will not be
treated as retrospective. In Alexander v. Mercouris, (1979) 3 All
ER 305 Goff, L.J., after referring to the said observations of Lord
Denman, C.J., has observed that a statute would not be operating
prospectively if it creates new rights and duties arising out of past
transactions. The question whether a particular statute operates
prospectively only or has retrospective operation also will have to
be determined on the basis of the effect it has on existing rights
and obligations, whether it creates new obligations or imposes
new duties or levies new liabilities in relation to past
transactions. For that purpose it is necessary to ascertain the
intention of the legislature as indicated in the statute itself.”
147

158. In Zile Singh v. State of Haryana & Ors., (supra), this Court has

observed that the rule against retrospectivity does not extend to protect

from the effect of a repeal, a privilege which did not amount to the

accrued right. This court, while dealing with retrospectivity of a statute,

observed that retrospectivity must be reasonable and not excessive or

harsh; otherwise, it runs the risk of being struck down for being

unconstitutional. Following observations have been made:

“15. Though retrospectivity is not to be presumed and rather
there is presumption against retrospectivity, according to Craies
(Statute Law, 7th Edn.), it is open for the legislature to enact laws
having retrospective operation. This can be achieved by express
enactment or by necessary implication from the language
employed. If it is a necessary implication from the language
employed that the legislature intended a particular section to
have a retrospective operation, the courts will give it such an
operation. In the absence of a retrospective operation having been
expressly given, the courts may be called upon to construe the
provisions and answer the question whether the legislature had
sufficiently expressed that intention giving the statute
retrospectivity. Four factors are suggested as relevant: (i) general
scope and purview of the statute; (ii) the remedy sought to be
applied; (iii) the former state of the law; and (iv) what it was the
legislature contemplated. (p. 388) The rule against retrospectivity
does not extend to protect from the effect of a repeal, a privilege
which did not amount to accrued right. (p. 392)
***

18. In a recent decision of this Court in National Agricultural
Coop. Marketing Federation of India Ltd. v. Union of India
, (2003)
5 SCC 23 it has been held
that there is no fixed formula for the expression of legislative
intent to give retrospectivity to an enactment. Every legislation
whether prospective or retrospective has to be subjected to the
question of legislative competence. The retrospectivity is liable to
be decided on a few touchstones such as: (i) the words used must
expressly provide or clearly imply retrospective operation; (ii) the
retrospectivity must be reasonable and not excessive or harsh,
otherwise, it runs the risk of being struck down as
unconstitutional; (iii) where the legislation is introduced to
overcome a judicial decision, the power cannot be used to subvert
the decision without removing the statutory basis of the decision.
There is no fixed formula for the expression of legislative intent to
give retrospectivity to an enactment. A validating clause coupled
with a substantive statutory change is only one of the methods to
leave actions unsustainable under the unamended statute,
undisturbed. Consequently, the absence of a validating clause
148

would not by itself affect the retrospective operation of the
statutory provision, if such retrospectivity is otherwise apparent.”

159. This Court has considered the harsh consequences of

retrospective operation of the statute in Commissioner of Income Tax-19,

Mumbai v. Sarkar Builders116 and observed thus:

“25. Can it be said that in order to avail the benefit in the
assessment years after 1-4-2005, balconies should be removed
though these were permitted earlier? Holding so would lead to
absurd results as one cannot expect an assessee to comply with
a condition that was not a part of the statute when the housing
project was approved. We, thus, find that the only way to resolve
the issue would be to hold that clause (d) is to be treated as
inextricably linked with the approval and construction of the
housing project and an assessee cannot be called upon to comply
with the said condition when it was not in contemplation either of
the assessee or even the legislature, when the housing project
was accorded approval by the local authorities.

26. Having regard to the above, let us take note of the special
features which appear in these cases:

26.1. In the present case, the approval of the housing project, its
scope, definition and conditions, are all decided by and are
dependent on the provisions of the relevant DC Rules. In contrast,
the judgment in Reliance Jute and Industries Ltd. v. CIT, (1980)
1 SCC 139 was concerned with income tax only.

26.2. The position of law and the rights accrued prior to
enactment of the Finance Act, 2004 have to be taken into account,
particularly when the position becomes irreversible.

26.3. The provisions of Section 80-IB(10) mention not only a
particular date before which such a housing project is to be
approved by the local authority, even a date by which the housing
project is to be completed, is fixed. These dates have a specific
purpose which gives time to the developers to arrange their
affairs in such a manner that the housing project is started and
finished within those stipulated dates. This planning, in the
context of facts in these appeals, had to be much before 1-4-2005.

26.4. The basic objective behind Section 80-IB(10) is to encourage
developers to undertake housing projects for weaker sections of
society, inasmuch as to qualify for deduction under this provision,
it is an essential condition that the residential unit be constructed
on a maximum built-up area of 1000 sq ft where such residential
unit is situated within the cities of Delhi and Mumbai or within 25

116
(2015) 7 SCC 579
149

km from the municipal limits of these cities and 1500 sq ft at any
other place.

26.5. It is the cardinal principle of interpretation that a
construction resulting in unreasonably harsh and absurd results
must be avoided.

26.6. Clause (d) makes it clear that a housing project includes
shops and commercial establishments also. But from the day the
said provision was inserted, they wanted to limit the built-up area
of shops and establishments to 5% of the aggregate built-up area
or 2000 sq ft, whichever is less. However, the legislature itself
felt that this much commercial space would not meet the
requirements of the residents. Therefore, in the year 2010,
Parliament has further amended this provision by providing that
it should not exceed 3% of the aggregate built-up area of the
housing project or 5000 sq ft, whichever is higher. This is a
significant modification making complete departure from the
earlier yardstick. On the one hand, the permissible built-up area
of the shops and other commercial shops is increased from 2000
sq ft to 5000 sq ft. On the other hand, though the aggregate built-
up area for such shops and establishment is reduced from 5% to
3%, what is significant is that it permits the builders to have 5000
sq ft or 3% of the aggregate built-up area, “whichever is higher”.
In contrast, the provision earlier was 5% or 2000 sq ft, “whichever
is less”.”

(emphasis supplied)

160. This Court in Jawarharmal (supra) and Rai Ramkrishna (supra),

has considered the practical realities before analysing the extent of

retrospective operation of the statute. Several decisions were cited in

regard to conflict of interest (which are referred to in the footnote

hereafter117) and it was urged that the rule of construction that is to be

adopted is one of purposive interpretation.

117
Southern Electricity Supply Co. of Orissa Ltd. v. Sri Seetaram Rice Mill, (2012) 2 SCC 108
@ 19-21; Tinsukhia Electric Supply Company Ltd. v. State of Assam & Ors., (1989) 3 SCC 709
@ para 118-121; C.I.T. v. Hindustan Bulk Carriers, (2003) 3 SCC 57 @ para 14-21; D. Saibaba
v. Bar Council of India & Ors
., (2003) 6 SCC 186 @ para 16-18; Balram Kamanat v. Union
of India
, (2003) 7 SCC 628 para 24; New India Assurance Co. v. Nulli Nivelle, (2008) 3 SCC
279 @ Para 51-54; Government of Andhra Pradesh &Ors. v. Smt. P. Laxmi Devi, (2008) 4
SCC 720 Para 41 & 42.; Entertainment Network (India) Ltd. v. Super Cassette Industries Ltd.,
(2008) 13 SCC 30 para 132-137; N. Kannadasan v. Ajoy Khose and Ors., (2009) 7 SCC 1 para
54-67; H.S. Vankani v. State of Gujarat, (2010) 4 SCC 301 para 43-48; State of Madhya
Pradesh v. Narmada Bachao Andolan & Ors
., (2011) 7 SCC 639 para 78-85; State of Gujarat
& Anr. v. Hon
’ble Mr. Justice R.A. Mehta (Retd.) and Ors., (2013) 3 SCC 1: para 96-98).
150

In re: Legislative History of Act of 2013

161. The Land Acquisition, Rehabilitation and Resettlement Bill, 2011

(Bill No.77 of 2011) was introduced in the Parliament. The provisions

of Section 24, as introduced in the said Bill, read as under:

“24. (1) Notwithstanding anything contained in this Act, in any
case where a notification under section 4 of the Land Acquisition
Act, LA was issued before the commencement of this Act but the
award under section 11 thereof has not been made before such
commencement, the process shall be deemed to have lapsed and
the appropriate Government shall initiate the process for
acquisition of land afresh in accordance with the provisions of
this Act.

(2) Where possession of land has not been taken, regardless of
whether the award under section 11 of the Land Acquisition Act,
LA Act has been made or not, the process for acquisition of land
shall also be deemed to have lapsed and the appropriate
Government shall initiate the process of acquisition afresh in
accordance with the provisions of this Act.”

162. It is apparent from Section 24(1), as introduced originally,

contained a provision with respect to award, which has not been made,

but it was later on amended, and now as provided in Section 24(1)(a),

there is no lapse and only higher compensation is available in case

award has not been passed. The earlier Section 24(2) contained only

the provision with respect to possession of the land that has not been

taken. Earlier, there was no time limit prescribed, and it was proposed

that the process for acquisition of land shall lapse.

Clause 24 of Notes on clauses of Bill read thus:

“Clause 24 seeks to provide that land acquisition process under
the Land Acquisition Act, LA shall be deemed to have lapsed in
certain cases where the award has not been made and
possession of land has not been taken before the commencement
of proposed legislation.”

151

163. After considering the various suggestions of the State

Government, the Committee made some recommendations, which are

extracted hereunder:

“16.5 The Committee note that Clause 24 of the Bill provides that
land acquisition cases/process shall be invalid on enactment of
the new Act in cases where Collector has not given award or
possession of the land has not been taken before the
commencement of the proposed legislation. Some of the
representatives of the industry and also the Ministries like
Railways and Urban Development submitted before the
Committee that land acquisition proceedings already initiated
under the existing Land Acquisition, LA should not lapse as it
would lead to time and cost over-run in many infrastructural
projects. However, in such cases land compensation and R&R
benefits could be allowed as per the provisions of LARR Bill. The
Committee would like the Government to re-examine the issue
and incorporate necessary provisions in the Rules to be framed
under the new Act with a view to ensuring that the land
owners/farmers/affected families get enhanced compensation
and R & R package under the provisions of the LARR Bill, 2011
and at the same time, the pace of implementation of
infrastructural projects is not adversely impacted.”

164. Debates in the Lok Sabha on 29.8.2013, were referred to during

the hearings, to cite various reasons given in respect of the question

why effect should be given retrospectively in cases where acquisition

has not been completed. Shri Jairam Ramesh, Minister concerned at

the relevant time, replied to debate about the retrospective part with

respect to Section 24 thus:

“… The hon’ble member has also raised question about
retrospective clause. This is about section 24 under
which it has been provided that if the award has not
been passed under the previous law than the new law
will be applicable. Secondly, if the award has been
passed and no compensation has been given and no
physical possession has been taken the new law will
be applicable. The third situation where this clause will
be applicable is when award has been passed but
farmer has not been given more than 50 per cent
compensation which will entail enforcement of this law.
The hon’ble member and several others have raised
152

this apprehension that this Act will ultimately give vast
powers to the bureaucracy. In regard to this
apprehension I would like to say that we have fixed
time limit at every level of the procedure and I hope that
the states will adhere to these timelines.”
(emphasis supplied)

165. It is clear that while replying to the debate, the Minister concerned

has stated that there would be lapse only if in case possession has not

been taken and compensation has not been paid. The emphasis right

from the beginning was on possession. Thus, from the perusal of debate

too, it is apparent that the word “or” had been understood as “and”.

In Re: Objectives of the Act

166. It was submitted on behalf of the landowners that the

consideration of difficulties, harsh consequences, the importance of

performance, time lost during litigation, revival of stale claims would

not permit deviation from the mandate of the law of Section 24. If

obligations are mandatory, then also intendment of the Act cannot be

defeated. As such, it is the duty of the court to disregard such factors

and to give contextual interpretation to the intendment. The language

of the statute, wherever the context requires, its objects and reasons,

the Preamble, its legislative history as well as the accompanying

provisions (including the relevant provisions of the old Act) are to be

considered by the court. In Arnit Das v. State of Bihar118, the court

observed that the ambiguity in the definition of “juvenile” is to be

resolved by taking into consideration the Preamble and the statement

118
2000 (5) SCC 488
153

of objects and reasons. Burrakur Coal Co. Ltd. v. Union of India119 and

A. Thangal Kunju Musaliar v. M. Venkatachalam Potti120. During the

hearing, the State had also relied on other decisions to say that where

the issue had attained finality, relief ought not to be granted.121 The Act

of 2013 has been enacted considering the difficulties caused by the

operation of the earlier laws and to subserve the public interest. Thus,

the Court should interpret it in the context of the attendant

circumstances. At the same time, the court should not, while ostensibly

adopting a purposive or liberal interpretation, affect matters which have

become final, or stale. In Popat Bahiru Govardhane & Ors. (supra) this

aspect, in the context of limitation provisions, was highlighted in the

following terms:

“16. It is a settled legal proposition that law of limitation may
harshly affect a particular party but it has to be applied with all
its rigour when the statute so prescribes. The court has no power
to extend the period of limitation on equitable grounds. The
statutory provision may cause hardship or inconvenience to a
particular party but the court has no choice but to enforce it giving
full effect to the same. The legal maxim dura lex sed lex which
means “the law is hard but it is the law”, stands attracted in such
a situation. It has consistently been held that, “inconvenience is
not” a decisive factor to be considered while interpreting a
statute. “A result flowing from a statutory provision is never an
evil. A court has no power to ignore that provision to relieve what
it considers a distress resulting from its operation.”

119
1962 (1) SCR 44
120
1955 SCR 1196
121 Delhi Development Authority v. Sukhbir Singh, (2016) 16 SCC 258, Padma Sundara Rao

(Dead) & Ors. v. State of T.N. & Ors., 2002 (3) SCC 533; Popat Bahiru Govardhane & Ors.

v. Special Land Acquisition Officer & Anr., 2013 (10) SCC 765; B. Premanand & Ors. v.
Mohan Koikal & Ors
., (2011) 4 SCC 266 and Bhavnagar University v. Palitana Sugar Mill (P)
Ltd. & Ors
., (2003) 2 SCC 111
154

In Re: proviso to Section 24(2)

167. In reference to the question whether the proviso is part of section

24(2) or Section 24(1), it was submitted on behalf of the acquiring

authorities and the States that the proviso needs to be read along with

the main provision of section 24(2) and cannot be read with section

24(1)(b). It was pointed out that this Court has taken the view in Delhi

Metro Rail Corporation Ltd. v. Tarun Pal Singh & Ors., (2018) 14 SCC 161

that the proviso should be read as part of section 24(2) of the Act of

2013, cannot be construed as proviso to section 24(1)(b) whereas in

Delhi Development Authority v. Virender Lal Bahri & Ors. (supra), a

different view has been taken while referring the matter, and it has been

observed that it should be treated as a proviso to section 24(1)(b) and

not to section 24(2). As the interpretation of section 24(2) is involved in

the matter, it is absolutely necessary to socio-justice and whether the

proviso is part of section 24(2) or has to be read as an independent

provision or it has to be treated as part of the proviso to section 24(1)(b),

the question is required to be decided as it arises for the purpose of the

very provisions of section 24(2).

168. It was submitted that the statutory provisions are to be read as

they exist. Relocation of a proviso by the interpretive process, resulting

in its placement at a different place is a drastic judicial measure which

can be adopted in rarest of rare cases, and such an exercise may

amount to encroaching upon the legislative field or causing violence to
155

the plain language used by the legislature. By the proviso, Parliament

has tried to balance the competitive new rights, and the proviso cannot

be lifted and bodily placed at a different place. It was also submitted on

behalf of the acquiring authorities that as the Section 24(1(b) ends with

a ‘full stop’ (.) Section 24 (2) ends with a colon (:). These punctuation

marks leave no room for any doubt that Parliament consciously used

the proviso as an exception to section 24(2). The placement of the

proviso needs no further comparative rules of interpretation. There is a

very clear indication of legislative intent in section 24(2) itself.

Punctuation plays a vital role in interpretation if some ambiguity is

there in its interpretation. It is argued that punctuations play a very

important role in interpreting statutes if some ambiguity is raised in its

interpretation. Considering the use of a particular punctuation mark is

an accepted method of statutory interpretation.

169. Considering the use of punctuation marks, as a statutory mode of

interpretation, full stop means the particular sentence ends and stands

detached from the next part. It was also submitted that the proviso is

to be read together with the main provision to which it is attached.

170. On the other hand, it was submitted on behalf of the landowners

that the proviso does not refer to the main factors of lapse under section

24(2). The proviso is not an exemption from lapsing if it is read as part

of Section 24(2), then the absurd consequences would follow. The

proviso is in accord with section 24(1)(b) and has to be read as part of
156

it. Reliance has been placed on D.D.A. v. Virendra Lal Bahri & Ors.

(supra). It was submitted that the proviso could not have been intended

to be part of section 24(2) dealing with lapsing of acquisition where the

subject-matter of the proviso is wholly unrelated to physical possession

of the land, but only relating to compensation not being deposited. It

was also submitted that if the proviso is read with section 24(2),

arbitrary results will follow. The proviso would be arbitrary and liable to

be struck down under Article 14 of the Constitution. In case notification

under section 4 applies only to a single plot of land or single owner, the

conditions of section 24(2) are not fulfilled acquisition would lapse, and

in a case where several pieces of land have been acquired, if

compensation in respect of majority landholdings has not been

deposited, such acquisition will not lapse, but only higher

compensation under the Act of 2013 would be paid. The words “award

being made five years or more prior to the commencement of the Act” are

absent in the proviso. Reading these words to proviso would do violence

to the literal language, and its plain meaning proviso and being a

beneficial provision must be construed in the way which furthers its

performance. It was also submitted that in respect of large chunks of

land carved out by the same notification, the compensation in respect

of the majority of landholdings has been deposited. In such a case no

lapse will take place because the proviso in such a case will not apply

and whether in respect of the majority of landholdings, compensation
157

has or has not been deposited, would have no bearing on the issue

whether lapsing does or does not take place under section 24(2).

With respect to the proviso, various questions arise for consideration.

(a) Interpretation:

171. The main question is whether under the scheme of section 24 the

proviso is treated as part of Section 24(1)(b) or it is part of the exception

carved out in section 24(2) particularly in view of the fact that the word

‘or’ has been interpreted by us as ‘and.’ In that context, when Delhi

Metro Rail Corporation Ltd. v. Tarun Pal Singh & Ors122 as well as when

the question was considered in Delhi Development Authority v. Virender

Lal Bahri & Ors., [SLP [C] No.37375/2016], the question did not come

up for consideration in any of the matters whether ‘or’ in two negative

conditions in Section 24(2) has to be read conjunctively or disjunctively.

When we read the word “or” as ‘and’ in the main part of section 24(2), it

is clear that the proviso has to stay as part of section 24(2) where it has

been placed by the legislature, and only then it makes sense. If ‘or’ used

in-between two negative conditions of ‘possession has not been taken’ or

‘compensation has not been paid,’ disjunctively, in that case, the proviso

cannot be operative and would become otiose and would make no sense

as part of Section 24(2). In case of amount not having been paid the

acquisition has to lapse, though possession (of the land) has been taken

would not be the proper interpretation of the main part as mentioned

122
(2018) 14 SCC 161
158

above, when “or” is read conjunctively, section 24(2) provided for lapse

in a case where possession has not been taken, nor compensation has

been paid, in such a case proviso becomes operative in given exigency

of not depositing amount with respect to majority of landholdings.

172. A reading of section 24(2) shows that in case possession has been

taken even if the compensation has not been paid, the proceedings shall

not lapse. In case payment has not been made nor deposited with

respect to the majority of the holdings in the accounts of the

beneficiaries, then all the beneficiaries specified in the notification

under Section 4 of the Act of 1894 shall get the enhanced compensation

under the provisions of the Act of 2013. Section 24(2) not only deals

with failure to take physical possession but also failure to make

payment of compensation. If both things have not been done, there is

lapse of the acquisition proceeding. But where payment has been made

though possession has been taken or payment has been made to some

of the persons but not to all, and it has also not been deposited as

envisaged in the proviso, in that event all beneficiaries (under the same

award) shall get higher compensation. This is because once possession

is been taken, there can be no lapse of the proceedings, and higher

compensation is intended on failure to deposit the compensation. Once

an award has been passed and possession has been taken, there is

absolute vesting of the land, as such higher compensation follows under

the proviso, which is beneficial to holders. In a case where both the
159

negative conditions have not been fulfilled, as mentioned in section

24(2), there is a lapse. Thus, the proviso, in our opinion is a wholesome

provision and is, in fact, a part of section 24(2); it fits in the context of

section 24(2) as deposit is related with the payment of compensation

and lapse is provided due to non-payment along with not taking

possession for five years or more whereas for non-deposit higher

compensation is provided. Thus, when one of the conditions has been

satisfied in case payment has been made, or possession has not been

taken, there is no lapse of the proceedings as both the negative

conditions must co-exist.

173. When we consider the provisions of section 24(1)(b) where an

award has been passed under section 11 of the Act of 1894, then such

proceedings shall continue under the provisions of the said Act as if it

has not been repealed. The only exception carved out is the period of 5

years or more and that too by providing a non-obstante clause in

Section 24(2) to anything contained in section 24(1). The non-obstante

clause qualifies the proviso also to Section 24(2). It has to be read as

part of Section 24(2) as it is an exception to Section 24(1)(b). In our

opinion, Section 24(1)(b) is a self-contained provision, and is also a part

of the non-obstante clause to the other provisions of the Act as provided

in sub-section (1). Parliament worked out an exception, by providing a

non-obstante clause in section 24(2), to Section 24(1). Compensation is

to be paid under Section 24(1)(b) under the Act of 1894 and not under
160

the Act of 2013. As such Section 24 (2) is an exception to section 24(1)(b)

and the proviso is also an exception which fits in with non-obstante

clause of Section 24 (2) only. Any other interpretation will be derogatory

to the provisions contained in Section 24(1)(b) which provides that the

pending proceedings shall continue under the Act of 1894 as if it had

not been repealed, that would include the part relating to compensation

too. Even if there is no lapse of proceedings under section 24(1)(a), only

higher compensation follows under Section 24(1)(a). Section 24(2) deals

with the award having been made five years or before the

commencement of the new Act. The legislative history also indicates/it

was intended that five years’ period should be adequate to make

payment of compensation and to take possession. In that spirit, the

proviso has been carved out as part of section 24(2). Thus when

Parliament has placed it at a particular place, by a process of reasoning,

there can be no lifting and relocation of the provision. To bodily lift it

would be an impermissible exercise. Unless it produces absurd results

and does not fit in the scheme of the Act and the provisions to which it

is attached such an interpretation, doing violence to the express

provision, is not a legitimate interpretative exercise. There is no need to

add it as the proviso to Section 24(1)(b) as it has not been done by the

legislature, and it makes sense where it has been placed. It need not be

lifted.

161

(b) Punctuation used in Section 24(2):

174. Parliament has used the full stop (.) after section 24(1) and colon

(:) after section 24(2). It cannot be gainsaid that punctuation plays a

vital role, particularly when an attempt is made to relocate any part of

the provision. The use of the colon is to introduce a sub-clause that

follows logically from the text before it. We are examining this aspect of

the colon, additionally. Though as the interpretation of the provision of

Section 24(2) and its proviso needs no further deliberation regarding its

placement, the same is to be read as a proviso to Section 24(2) and not

Section 24(1)(b). Use of punctuation colon reinforces our conclusion and

punctuation mark has been an accepted method of statutory

interpretation when such a problem arises. Though sometimes

punctuation can be ignored also but not generally. The full stop after

section 24(1)(b) expresses deliberate intent to end a particular sentence

and detach it from the next part. With regard to the meaning of the

punctuation colon, the University of Oxford Style Guide states as under:

“Use a colon to introduce a subclause which follows
logically from the text before it, is not a new concept and
depends logically on the preceding main clause. Do not use a
colon if the two parts of the sentence are not logically connected.”

175. The note of the University of England “Writing Correctly” has also

been relied upon on behalf of the State of Haryana. Following discussion

has been made:

“Colons have a number of functions in a sentence. If you use
colons in your writing, use them sparingly, and never use a colon
more than once in any sentence.

162

Rule 1: Colons can be used to introduce a list, but they must
follow a complete sentence (independent clause).

Rule 2: Colons can be used to explain, summarise or extend the
meaning in a sentence by introducing a word, phrase or clause
that enlarges on the previous statement.

Rule 3: Colons are used to separate the title from the subtitle.

Rule 4: Colons can be used to introduce a quotation in formal
academic writing.”
(emphasis supplied)

176. It is clear that the colon (:) has a reference to the previous

statement and enlarges the same and extends the meaning of the

sentence. The colon indicates that the text is intrinsically linked to the

previous provision preceding it, i.e., Section 24(2) in this case and not

section 24(1). The colon indicates that what follows. The colon proves,

explains, defines describes or lists elements of what precedes it. In case

the proviso is bodily lifted and placed after section 24(1(b), section 24(2)

will end with a “colon,” which is never done to end a provision. Certain

decisions have been referred to saying that importance and weightage

are to be given to punctuation marks. The earlier view was that

punctuations were added by the proof readers, and the Acts passed by

Parliament did not contain any punctuation. However, it was submitted

that in the past century, the English courts realised that the drafts

placed before the Parliament also carry punctuations and, thus, it is

important to give meaning to the same. Bennion on Statutory

Interpretation has this to say regarding punctuation marks:

“16.8 Punctuation is a part of an Act and may be considered in
construing a provision. It is usually of little weight, however, since
the sense of an Act should be the same with or without its
punctuation.

163


Although punctuation may be considered, it will generally be of
little use since the sense of an Act should be the same with or
without it. Punctuation is a device not for making meaning, but
for making meaning plain. Its purpose is to denote the steps that
ought to be made in oral reading and to point out the sense. The
meaning of a well-crafted legislative proposition should not turn
on the presence or absence of a punctuation mark.”

177. In Marshall v. Cottingham123 [1982] Ch 82 at 88, at 12 while

referring to the change of position and establishing that punctuation

may be used in interpretation, it was held that:

“the day is long past when the courts would pay no heed to
punctuation in an Act of Parliament.”
In Hanlon v Law Society124 it was held as under :

“… not to take account of punctuation disregards the reality
that literate people, such as parliamentary draftsmen, punctuate
what they write, if not identically, at least in accordance with
grammatical principles. Why should not other literate people,
such as judges, look at the punctuation in order to interpret the
meaning of the legislation as accepted by parliament?”
Yet again in Houston v Burns125, it was held that:

“Punctuation is a rational part of English composition and is
sometimes quite significantly employed. I see no reason for
depriving legal documents of such significance as attaches to
punctuation in other writings.”

178. Other decisions were also cited.126 On similar lines, the American

approach to the interpretation of punctuations is different. In Taylor v.

Caribou127 , it was held as under:

“We are aware that it has been repeatedly asserted by courts
and jurists that punctuation is no part of a statute, and that it
ought not to be regarded in construction. This rule in its origin
was founded upon common sense, for in England until 1849
statutes were entrolled upon parchment and enacted without
punctuation …. Such a rule is not applicable to conditions where,
as in this State, a bill is printed and is on the desk of every
member of the Legislature, punctuation and all, before its final

123
[1981] 3 All ER 8
124
[1981] AC 124 at 197
125
[1910] AC 337 at 348
126
Dingmar v. Dingmar 2007 (2) All ER 382; Kennedy v Information Commissioner and
another (Secretary of State for Justice intervening) [2012] 1 WLR 3524
127
102 Me. 401, 67 A.2 (1907)
164

passage. There is no reason why punctuation, which is intended
to and does assist in making clear and plain the meaning of all
things else in the English language, should be rejected in the case
of the interpretation of statutes. “Cessante ratione legis cessat
ipso lex.” Accordingly we find that it has been said that in
interpreting a statute punctuation may be resorted to when other
means fail …; that it may aid its construction …; that by it the
meaning may often be determined; that it is one of the means of
discovering the legislative intent …; that it may be of material
assistance in determining the legislative intention….”
(emphasis supplied)

In Aswini Kumar Ghose (supra) stated that:

“Punctuation is after all a minor element in the construction of a
statute, and very little attention is paid to it by English courts.
Cockburn, C.J. said in Stephenson v. Taylor: “On the Parliament
Roll there is no punctuation and we therefore are not bound by
that in the printed copies.” It seems, however, that in the Vellum
copies printed since 1850 there are some cases of punctuation,
and when they occur they can be looked upon as a sort of
contemporanea expositio. When a statute is carefully punctuated
and there is doubt about its meaning, a weight should
undoubtedly be given to the punctuation. I need not deny that
punctuation may have its uses in some cases, but it cannot
certainly be regarded as a controlling element and cannot be
allowed to control the plain meaning of a text.

********* *******
“77. The High Court has rejected the contention of the petitioner
Aswini Kumar Ghosh on two grounds. In the first place it has
been said that the comma was no part of the Act. That the
orthodox view of earlier English Judges was that punctuation
formed no part of the statute appears quite clearly from the
observations of Willes, J. in Claydon v. Green. Vigorous
expression was given to this view also by Lord Esher, M.R. in
Duke of Devonshire v. Connor where he said:

“In an Act of Parliament there are no such things as brackets
any more than there are such things as stops.”
This view was also adopted by the Privy Council in the matter of
interpretation of Indian statutes as will appear from the
observations of Lord Hobhouse in Maharani of Burdwan v.
Murtunjoy Singh
, namely, that “it is an error to rely on
punctuation in construing Acts of the legislature”. Same opinion
was expressed by the Privy Council in Pugh v. Ashutosh Sen. If,
however, the Rule regarding the rejection of punctuation for the
purposes of interpretation is to be regarded as of imperfect
obligation and punctuation is to be taken at least as
contemporanea expositio, it will nevertheless have to be
disregarded if it is contrary to the plain meaning of the statute. If
punctuation is without sense or conflicts with the plain meaning
of the words, the court will not allow it to cause a meaning to be
placed upon the words which they otherwise would not have.
This leads me to the second ground on which mainly the High
Court rejected the plea of the petitioner Aswini Kumar Ghosh,
165

namely, that the word “other” in the phrase “any other law” quite
clearly connects the Indian Bar Councils Act with other laws as
alternatives and subjects both to the qualification contained in
the adjectival clause. I find myself in complete agreement with
the High Court on this point. If the intention was that the
adjectival clause should not qualify the Indian Bar Councils Act,
then the use of the word “other” was wholly in apposite and
unnecessary. The use of that word unmistakably leads to the
conclusion that the adjectival clause also qualifies something
other than “other law”. If the intention were that the Indian Bar
Councils Act
should remain unaffected by the qualifying phrase
and should be superseded in toto for the purposes of this Act the
legislature would have said “or in any law regulating the
conditions etc.” It would have been yet simpler not to refer to the
Indian Bar Councils Act at all and to drop the adjectival clause
and to simply say “Notwithstanding anything contained in any
law”. In the light of the true meaning of the title of the Act as I
have explained above and having regard to the use of the word
“other” I have no hesitation in holding,
in agreement with the High Court, that what the non obstante
clause intended to exclude or supersede was not the whole of the
Indian Bar Councils Act but to exclude or supersede that Act and
any other law only insofar as they or either of them purported to
regulate the conditions subject to which a person not entered in
the roll of advocates of a High Court might be permitted to practise
in that High Court and that the comma, if it may at all be looked
at, must be disregarded as being contrary to this plain meaning
of the statute.”

179. In Jamshed N. Guzdar (supra) this court held that:

“42. The general jurisdiction of the High Courts is dealt with in
Entry 11-A under the caption “administration of justice”, which
has a wide meaning and includes administration of civil as well
as criminal justice. The expression “administration of justice” has
been used without any qualification or limitation wide enough to
include the “powers” and “jurisdiction” of all the courts except the
Supreme Court. The semicolon (;) after the words “administration
of justice” in Entry 11-A has significance and meaning. The other
words in the same entry after “administration of justice” only
speak in relation to “constitution” and “organisation” of all the
courts except the Supreme Court and High Courts. It follows that
under Entry 11-A the State Legislature has no power to constitute
and organise the Supreme Court and High Courts. It is an
accepted principle of construction of a Constitution that
everything necessary for the exercise of powers is included in the
grant of power. The State Legislature being an appropriate body
to legislate in respect of “administration of justice” and to invest
all courts within the State including the High Court with general
jurisdiction and powers in all matters, civil and criminal, it must
follow that it can invest the High Court with such general
jurisdiction and powers including the territorial and pecuniary
jurisdiction and also to take away such jurisdiction and powers
from the High Court except those, which are specifically conferred
under the Constitution on the High Courts. It is not possible to say
166

that investing the City Civil Court with unlimited jurisdiction,
taking away the same from the High Court, amounts to dealing
with “constitution” and “organisation” of the High Court. Under
Entry 11-A of List III the State Legislature is empowered to
constitute and organise City Civil Court and while constituting
such court the State Legislature is also empowered to confer
jurisdiction and powers upon such courts inasmuch as
“administration of justice” of all the courts including the High
Court is covered by Entry 11-A of List III, so long as Parliament
does not enact law in that regard under Entry 11-A. Entry 46 of
the Concurrent List speaks of the special jurisdiction in respect of
the matters in List III. Entry 13 in List III is “… Code of Civil
Procedure at the commencement of this Constitution …”. From
Entry 13 it follows that in respect of the matters included in the
Code
of Civil Procedure and generally in the matter of civil
procedure Parliament or the State Legislature, as provided by
Article 246(2) of the Constitution, acquire the concurrent
legislative competence. The 1987 Act deals with pecuniary
jurisdiction of the courts as envisaged in the Code of Civil
Procedure and as such the State Legislature was competent to
legislate under Entry 13 of List III for enacting the 1987 Act.

68. A Full Bench of the Punjab and Haryana High Court in
Rajinder Singh v. Kultar Singh AIR 1980 P&H 1, touching the
same topic stated thus: (AIR p. 1)
“So far as the High Courts are concerned, the topic of jurisdiction
and powers in general is not separately mentioned in any of the
entries of List I, but ‘administration of justice’ as a distinct topic
finds a place in Entry 3 of List II (now Entry 11-A of List III).
The expression ‘administration of justice’ occurring in Entry 3 of
List II of the VIIth Schedule has to be construed in its widest sense
so as to give power to the State Legislature to legislate on all
matters relating to administration of justice.
After the words ‘administration of justice’ in Entry 3 there is a
semicolon, and this punctuation cannot be discarded as being
inappropriate. The punctuation has been put with a definite
object of making this topic as distinct and not having relation only
to the topic that follows thereafter. Under Entry 78 of List I, the
topic of jurisdiction and powers of the High Courts is not dealt
with. Under Entry 3 of List II the State Legislature can confer
jurisdiction and powers or restrict or withdraw the jurisdiction
and powers already conferred on any of the courts except the
Supreme Court, in respect of any statute. Therefore, the State
Legislature has the power to make a law with respect to the
jurisdiction and powers of the High Court.”

180. There are several other decisions, which support the proposition

that punctuation marks, especially colons have a significant role in the

interpretation of words in a statute. These judgments include Falcon
167

Tyres Ltd. v. State of Karnataka128. It was submitted that the semicolon

after the word “cotton” did not mean that the first part of the section

was disjunctive from “such produce” as has been subjected to any

physical, chemical or other process. It was further submitted that

punctuation is not a safe tool in construction of statute and if the first

part of the section is read as disjunctive from the other part it conflicts

with Sl. No. 2 in the Second Schedule. Further it was submitted that

definition section which is the interpretation clause to the statute

begins with the expression “unless the context otherwise requires”. This

court held that:

“11. We do not find any substance in the submission of the
learned counsel for the appellant that the semicolon after the
word “cotton” does not mean that the first part of the section is
disjunctive from “such produce” as has been subjected to any
physical, chemical or other process. Section 2(A)(1) is in two parts,
it excludes two types of food from agricultural produce. According
to us, the definition of the agricultural and horticultural produce
does not say as to what would be included in the agricultural or
horticultural produce, in substance it includes all agricultural or
horticultural produce but excludes, (1) tea, coffee, rubber,
cashew, cardamom, pepper and cotton from the definition of the
agricultural or horticultural produce though all these products as
per dictionary meaning or in common parlance would be
understood as agricultural produce; and (2) “such produce as has
been subjected to any physical, chemical or other process for
being made fit for consumption”, meaning thereby that the
agricultural produce other than what has been excluded, which
has been subjected to any physical, chemical or other process for
making it fit for consumption would also be excluded from the
definition of the agricultural or horticultural produce except where
such agricultural produce is merely cleaned, graded, sorted or
dried. For example, if the potatoes are cleaned, graded, sorted or
dried, they will remain agricultural produce but in case raw
potato is subjected to a process and converted into chips for
human consumption it would cease to be agricultural produce for
the purposes of the Entry Tax Act. The words “such produce” in
the second part do not refer to the produce which has already
been excluded from the agricultural or horticultural produce but
refer to such other agricultural produce which has been subjected

128
(2006) 6 SCC 530
168

to any physical, chemical or other process for being made fit for
human consumption.”

The other judgment cited was State of Gujarat v. Reliance

Industries Ltd.129 With respect to ‘Full Stop’ and ‘Colon’, Vepa P. Sarathi

in the Interpretation of Statutes, Fifth Edition discussed the issue thus:

“The Stop. – The most important punctuation mark is the period
or full stop. It has to be placed at the end of a complete sentence
which is neither exclamatory nor interrogatory. Of course, in
legislative drafting exclamatory or interrogative sentences will
not occur. An incomplete sentence should however end with a
dash. It should be noticed carefully whether the final stop should
be inside or outside the quotes. One can tell easily by the sense.
Colon. – It implies that what follows explains and amplifies the
sentence that comes before it. It is generally used before a
quotation, or to take the place of some word such as “namely”.”

181. Aswini Kumar Ghose & Anr (supra) also dealt with full stops and

held that as long as punctuation does not detract from the meaning of

the words in the text, it can be a controlling factor in interpretation. In

State of West Bengal v. Swapan Kumar Guha and Ors 130, this court

observed that grammar and punctuation are hapless victims of the pace

of life and sometimes are used both as a matter of convenience and of

meaningfulness. Besides, how far a clause which follows upon a comma

governs every clause that precedes the comma is a matter not free from

doubt. This Court observed that:

“5. Since the sole question for consideration arising out of the FIR,
as laid, is whether the accused are conducting a money
circulation scheme, it is necessary to understand what is
comprehended within the statutory meaning of that expression.
Section 2(c) of the Act provides:

“2. (c) ‘money circulation scheme’ means any scheme, by
whatever name called, for the making of quick or easy money, or
for the receipt of any money or valuable thing as the consideration

129
(2017) 16 SCC 28
130
(1982) 1 SCC 561
169

for a promise to pay money, on any event or contingency relative
or applicable to the enrolment of members into the scheme,
whether or not such money or thing is derived from the entrance
money of the members of such scheme or periodical
subscriptions;”
Grammar and punctuation are hapless victims of the pace of life,
and I prefer in this case not to go merely by the commas used in
clause (c) because, though they seem to me to have been placed
both as a matter of convenience and of meaningfulness, yet, a
more thoughtful use of commas and other gadgets of punctuation
would have helped make the meaning of the clause clear beyond
controversy. Besides, how far a clause which follows upon a
comma governs every clause that precedes the comma is a matter
not free from doubt. I, therefore, consider it more safe and
satisfactory to discover the true meaning of clause (c) by having
regard to the substance of the matter as it emerges from the object
and purpose of the Act, the context in which the expression is
used and the consequences necessarily following upon the
acceptance of any particular interpretation of the provision, the
contravention of which is visited by penal consequences.”

182. The present case involves placement of colon preceding to the

Proviso to Section 24 (2) and not Section 24 (1), which ends with a full

stop, and it makes sense and the true meaning where Parliament has

placed it. The proviso is part of section 24(2). It is not permissible to

alter the provision and to read it as a proviso to section 24(1)(b), mainly

when it makes sense where Parliament so placed it. To read the proviso

as part of section 24(1)(b), will create repugnancy which the provisions

contained in section 24(1)(b). The window period of 5 years is provided

to complete the acquisition proceedings where the award has been

passed, and the provisions of the Act of 1894 shall be applied as if it

has not been repealed. Section 24(2) starts with a non-obstante clause;

it plainly is notwithstanding Section 24 (1), and the proviso to section

24(2) enlarges the scope of section 24(2). When the window period has

been provided under section 24(1)(b), i.e., section 24(2) and its proviso,

higher compensation cannot follow in case of an award which has been
170

passed within 5 years of the enactment of the Act of 2013 otherwise

anomalous results shall accrue. In case proviso is read as a part of

section 24(1)(b), it would be repugnant to the consideration of the

provision which has been carved out saving acquisition and providing

window period of 5 years to complete the acquisition proceedings. There

were cases under the Act of 1894, in which award may have been made

in December 2013, a few days before the Act was enforced on 1.1.2014.

As the provisions of the Act of 1894 are applicable to such awards,

obviously notice of the award has to be given under Section 12 of the

said Act. There is no question of outright deposit. In such event as the

deposit is to be made when the Collector is prevented by the exigencies

specified in Section 31(2) from making payment. The deposit is not

contemplated directly either in the court or the treasury, as the case

may be as provided in section 31(2), corresponding to section 77(2) of

the Act of 2013.

183. The proviso relates to the non-payment. Compensation is

deposited when the Collector is prevented from making payment. It is

the obligation made under section 31(1) to tender the amount and pay

unless prevented by the contingencies specified in section 31(2). Thus,

the deposit has a co-relation with the expression “payment has not been

made,” and the proviso makes sense with Section 24 (2) only. In case of

non-payment or prevention from payment, compensation is required to
171

be deposited as the case may be in the Reference Court or otherwise in

Treasury, if permissible.

184. The proviso uses the expression that the amount is to be deposited

in the account of beneficiaries. Earlier under the Act of 1894, there was

no such provision for depositing the amount in the bank account of

beneficiaries but the method which was used as per the forms which

were prescribed to deposit the amount, it was credited to the Reference

Court or in the Treasury in the names of the beneficiaries and as against

the award. It was not a separate account but an account of the

Reference Court or set apart in the treasury. The proviso has to be

interpreted and given the meaning with Section 24(2) as an amount was

required to be paid and on being prevented had to be deposited as

envisaged under the Act of 1894.

185. If we hold that even if the award has been passed within 5 years

and the compensation amount has not been deposited with respect to

such an award passed in the window period, higher compensation to

follow if it is not deposited with respect to the majority of the holdings

would amount to re-writing the statute. The provision of section 24(1)(a)

is clear if an award has not been passed, higher compensation to follow.

No lapse is provided. In case award has been passed within the window

period of section 24(1)(b), inter alia, the provisions for compensation

would be that of the Act of 1894. The only exception to section 24(1) is
172

created by the non-obstante clause in section 24(2) by providing that in

case the requisite steps have not been taken for 5 years or more, then

there is lapse as a negative condition. The proviso contemplates higher

compensation, in case compensation has not been paid, and the

amount has not been deposited with respect to the majority of the

holdings, to all the beneficiaries under the Act of 2013, who were

holding land on the date of notification under Section 4. If the proviso

is added, section 24(1)(b) will destroy the very provision of section

24(1)(b) providing proceedings to continue under the Act of 1894, which

is not the function of the proviso to substitute the main Section but to

explain it. It is not to cause repugnancy with the main provision. The

function of the proviso is to explain or widen the scope. It is a settled

proposition of law that the proviso cannot travel beyond the provision

to which it is attached. The proviso would travel beyond the Act of 1894

as it is the intention of section 24(1)(b) the proceedings to govern by the

Act of 1894. Thus, the proviso has no space to exist with section

24(1)(b), and it has rightly not been attached by Parliament, with

Section 24(2) and has been placed at the right place where it should

have been.

186. It is in the cases where there is no lapse under section 24(2) if

either step has been taken proviso operates to provide higher

compensation. In the cases where possession has been taken, but the

amount has not been deposited as required under the proviso, higher
173

compensation to all the beneficiaries has to follow as once possession

has been taken, the land is vested in the State and payment is necessary

for any acquisition. As such, Parliament has provided in such cases

higher compensation to follow as envisaged in the proviso to section

24(2). Lapse of acquisition is provided only in the exigencies where

possession has not been taken, nor compensation has been paid in the

proceedings for acquisition pending as on the date on which the Act of

2013 came into force, then the State Government has to initiate fresh

proceedings if it so desires. The proviso is part of the scheme of section

24(2), and the entire provision of section 24(2), including the proviso,

operates when inaction is there for a period of 5 years or more, as

contemplated therein.

187. The fundamental consideration is that the proviso cannot

supersede the main provision of section 24(1)(b) and destroy it. The

function of the proviso is to except out the pressing provisions to which

it is attached. In case possession has been taken, but only a few

beneficiaries have been paid, there is no lapse. Even if nobody has been

paid, there is no lapse once possession has been taken. In case

compensation has not been deposited with respect to the majority of the

holdings, there is no lapse, but higher compensation to all the

beneficiaries has to follow. The provision provides equal treatment to

all, not only to a few- and, in effect, is similar to Section 28A of the Act

of 1894- in case the obligation to pay or deposit has not been discharged
174

and there is no arrangement of money to discharge the obligation either

by paying or depositing in the Reference Court and, if permissible, in

the treasury. Section 24(2) saves land which has been vested in the

State, once award has been passed and possession of land. However, in

case compensation has not been deposited with respect to majority of

landowners, in any given award, all beneficiaries have to be paid higher

compensation under the new Act.

188. It was urged that section 24(1) and 24(2) deal with different

subjects. It was submitted that Section 24(1) deals with compensation,

whereas section 24(2) deals with the lapsing of the acquisition. We are

unable to accept the submission. Section 24(2) also deals with payment

of compensation and taking of possession. Section 24(1)(a) is

concerning a situation where no award has been made, higher

compensation under the new Act to follow. In section 24(1)(b) where the

award is made (at the time of coming into force of the new Act) further

proceedings would be under the new law; subject to Section 24(2), the

provisions of the Act of 1894 would apply to such an award. Thus, the

main part of section 24(2) deals with payment of compensation; also the

proviso which provides for higher compensation to be paid to all is in

the context of section 24(2) and cannot be lifted and added to Section

24(1)(b) in the aforesaid circumstances. What would be the majority of

the landholdings has to be seen in the context, what has been acquired

in the case of a single plot being acquired, and in case compensation
175

has not been deposited with respect to that, it will constitute the

majority. The majority does not depend upon the number of holdings

acquired, but what constitutes the majority as per the acquired area

under the notification.

189. Section 24(1)(a) operates where no award is made in a pending

acquisition proceeding; in such event all provisions of the new Act

relating to determination of compensation would apply. Section 24 (1)

(b) logically continues with the second situation, i.e. where the award

has been passed, and states that in such event, proceedings would

continue under the Act of 1894. Section 24 (2) – by way of an exception,

states that where an award is made but requisite steps have not been

taken for five years or more to take possession nor compensation has

been paid then there is lapse of acquisition. If one of the steps has been

taken, then the proviso can operate. Time is the essence. It is on the

basis of time-lag that the lapse is provided and in default of payment

for five years as provided on failure to deposit higher compensation is

to be paid. It is based on that time-lag higher compensation has to

follow. It is not the mere use of colon under section 24(2) but the

placement of the proviso next to Section 24 (2) and not below Section

24(1)(b). Thus, it is not permissible to alter a placement of proviso more

so when it is fully in consonance with the provisions of section 24(2).

Section 24(2) completely obliterates the old regime to the effect of its

field of operation. Under section 24(1)(a), there is a partial lapse of the
176

old regime because all proceedings, till the stage of award are preserved.

The award, in such proceedings, made after coming into force of the Act

of 2013 has to take into account its provisions, for determination of

compensation. Thus, proceedings upto the stage of the award are

deemed final under the old Act. In the case under section 24(1)(b), the

old regime prevails. The proviso is an exception to section 24(2) and in

part the new regime for payment of higher compensation in case of

default for 5 years or more after award.

In re: Proviso to be read as part of provision it is appended

190. A proviso has to be construed as a part of the clause to which it

is appended. A proviso is added to a principal provision to which it is

attached. It does not enlarge the enactment. In case the provision is

repugnant to the enacting part, the proviso cannot prevail. Though in

absolute terms of a later Act. Its placement has been considered, and

purpose has been considered in the following decisions. It was observed

in State of Rajasthan v. Leela Jain & Ors that131:

“14. . . . So far as a general principle of construction of a proviso
is concerned, it has been broadly stated that the function of a
proviso is to limit the main part of the section and carve out
something which but for the proviso would have been within the
operative part. ….”
(emphasis supplied)

Similarly, this court in Sales-tax Officer, Circle 1, Jabalpur v.

Hanuman Prasad132 stated that:

“5. …. It is well-recognised that a proviso is added to a principal
clause primarily with the object of taking out of the scope of that

131
1965 (1) SCR 276
132
1967 (1) SCR 831
177

principal clause what is included in it and what the Legislature
desires should be excluded. ….”
(emphasis supplied)

In Commissioner of Commercial Taxes, Board of Revenue, Madras

and Anr. v. Ramkishan Shrikishan Jhaver etc 133 it was observed:

“8. … Generally speaking, it is true that the proviso is an
exception to the main part of the section; but it is recognised that
in exceptional cases a proviso may be a substantive provision
itself. ….”
(emphasis supplied)

191. In S. Sundaram Pillai & Ors. v. V.R. Pattabiraman & Ors 134 , the

scope of a proviso was clarified. The relevant discussion is quoted as

under:

“27. The next question that arises for consideration is as to what
is the scope of a proviso and what is the ambit of an Explanation
either to a proviso or to any other statutory provision. We shall
first take up the question of the nature, scope and extent of a
proviso. The well established rule of interpretation of a proviso is
that a proviso may have three separate functions. Normally, a
proviso is meant to be an exception to something within the main
enactment or to qualify something enacted therein which but for
the proviso would be within the purview of the enactment. In
other words, a proviso cannot be torn apart from the main
enactment nor can it be used to nullify or set at naught the real
object of the main enactment.”
***
“29. Odgers in Construction of Deeds and Statutes (5th Edn.)
while referring to the scope of a proviso mentioned the following
ingredients:

“P. 317. Provisos —These are clauses of exception or qualification
in an Act, excepting something out of, or qualifying something in,
the enactment which, but for the proviso, would be within it.

P. 318. Though framed as a proviso, such a clause may
exceptionally have the effect of a substantive enactment.”

30. Sarathi in Interpretation of Statutes at pages 294-295 has
collected the following principles in regard to a proviso:

133

AIR (1968) SC 59
134 (1985) 1 SCC 591
178

(a) When one finds a proviso to a section the natural presumption
is that, but for the proviso, the enacting part of the section would
have included the subject-matter of the proviso.

(b) A proviso must be construed with reference to the preceding
parts of the clause to which it is appended.

(c) Where the proviso is directly repugnant to a section, the proviso
shall stand and be held a repeal of the section as the proviso
speaks the latter intention of the makers.

(d) Where the section is doubtful, a proviso may be used as a
guide to its interpretation: but when it is clear, a proviso cannot
imply the existence of words of which there is no trace in the
section.

(e) The proviso is subordinate to the main section.

(f) A proviso does not enlarge an enactment except for compelling
reasons.

(g) Sometimes an unnecessary proviso is inserted by way of
abundant caution.

(h) A construction placed upon a proviso which brings it into
general harmony with the terms of section should prevail.

(i) When a proviso is repugnant to the enacting part, the proviso
will not prevail over the absolute terms of a later Act directed to
be read as supplemental to the earlier one.

(j) A proviso may sometimes contain a substantive provision.

***

35. A very apt description and extent of a proviso was given by
Lord Loreburn in Rhondda Urban District Council v. Taff Vale
Railway Co., 1909 AC 253, where it was pointed out that
insertion of a proviso by the draftsman is not always strictly
adhered to its legitimate use and at times a section worded as a
proviso may wholly or partly be in substance a fresh enactment
adding to and not merely excepting something out of or qualifying
what goes before. To the same effect is a later decision of the
same Court in Jennings v. Kelly, 1940 AC 206, where it was
observed thus:

“We must now come to the proviso, for there is, I think, no doubt
that, in the construction of the section, the whole of it must be
read, and a consistent meaning, if possible, given to every part of
it. The words are:… ‘provided that such licence shall be granted
only for premises situate in the ward or district electoral division
in which such increase in population has taken place…’ There
seems to be no doubt that the words “such increase in
population” refer to the increase of not less than 25 per cent of
the population mentioned in the opening words of the section.”

36. While interpreting a proviso care must be taken that it is used
to remove special cases from the general enactment and provide
for them separately.

37. In short, generally speaking, a proviso is intended to limit the
enacted provision so as to except something which would have
otherwise been within it or in some measure to modify the
enacting clause. Sometimes a proviso may be embedded in the
main provision and becomes an integral part of it so as to amount
to a substantive provision itself.

179

***

43. We need not multiply authorities after authorities on this
point because the legal position seems to be clearly and
manifestly well established. To sum up, a proviso may serve four
different purposes:

(1) qualifying or excepting certain provisions from the main
enactment:

(2) it may entirely change the very concept of the intendment of
the enactment by insisting on certain mandatory conditions to be
fulfilled in order to make the enactment workable:
(3) it may be so embedded in the Act itself as to become an
integral part of the enactment and thus acquire the tenor and
colour of the substantive enactment itself; and

(4) it may be used merely to act as an optional addenda to the
enactment with the sole object of explaining the real intendment
of the statutory provision.”
(emphasis supplied)

192. Craies on Statute Law, 7th Edn., has observed, with respect to the

construction of provisos thus:

“The effect of an excepting or qualifying proviso, according to the
ordinary rules of construction, is to except out of the preceding
portion of the enactment, or to qualify something enacted therein,
which but for the proviso would be within it; and such a proviso
cannot be construed as enlarging the scope of an enactment
when it can be fairly and properly construed without attributing
to it that effect.”
(emphasis supplied)

R. v. Dibdin, 1910 P 57 (CA), held as under:

“The fallacy of the proposed method of interpretation is not far to
seek. It sins against the fundamental rule of construction that a
proviso must be considered with relation to the principal matter
to which it stands as a proviso. It treats it as if it were an
independent enacting clause instead of being dependent on the
main enactment. The courts … have refused to be led astray by
arguments such as those which have been addressed to us,
which depend solely on taking words absolutely in their strict
literal sense, disregarding the fundamental consideration that
they are appearing in the proviso.”
(emphasis supplied)
180

193. Ishverlal Thakorelal Almaula v. Motibhai Nagjibhai 135, considered

the effect of a proviso and said that its function is “to except or qualify

something enacted in the substantive clause, which but for the proviso

would be within that clause. It may ordinarily be presumed in construing

a proviso that it was intended that the enacting part of the section would

have included the subject-matter of the proviso.” Similar observations

and considerations weighed in Haryana State Cooperative Land

Development Bank Ltd. v. Haryana State Cooperative Land Development

Banks Employees Union & Anr.136 and other decisions noted below.137

In Subhaschandra Yograj Sinha (supra) it was observed that :

“(9) The law with regard to provisos is well settled and well
understood. As a general rule, a proviso is added to an enactment
to qualify or create an exception to what is in the enactment, and
ordinarily, a proviso is not interpreted as stating a general rule.

But, provisos are often added not as exceptions or qualifications
to the main enactment but as savings clauses, in which cases
they will not be construed as controlled by the section. The
proviso which has been added to Section 50 of the Act deals with
the effect of repeal. The substantive part of the section repealed
two Acts which were in force in the State of Bombay. If nothing
more had been said, Section 7 of the Bombay General clauses Act
would have applied, and all pending suits and proceedings
would have continued under the old law, as if the repealing Act
had not been passed. The effect of the proviso was to take the
matter out of Section 7 of the Bombay General Clauses Act and
to provide for a special saving. It cannot be used to decide
whether Section 12 of the Act is retrospective. It was observed by
Wood, V.C., in Fitzgerald v. Champneys, (1861) 70 ER 958 that
saving clauses are seldom used to construe Acts. These clauses
are introduced into Acts which repeal others, to safeguard rights
which, but for the savings, would be lost. The proviso here saves
pending suits and proceedings, and further enacts that suits and
proceedings then pending are to be transferred to the courts

135 1966 (1) SCR 367
136 (2004) 1 SCC 574
137 Shimbhu & Anr. v. State of Haryana, (2014) 13 SCC 318; Kedarnath Jute Manufacturing

Co. Ltd. v. The Commercial Tax Officer and Ors., 1965 (3) SCR 626. Shah Bhojraj Kuverji Oil
Mills & Ginning Factory v. Subhash Chandra Yograj Sinha
, AIR 1961 SC 1596; Dwarka
Prasad v. Dwarka Das Saraf
, 1976 (1) SCC 128; The Commissioner of Income-tax, Mysore,
Travancore-Cochin and Coorg, Bangalore v. The Indo Mercantile Bank Ltd., 1959 (Supp 2)
SCR 256 In Romesh Kumar Sharma v. Union of India and Ors., (2006) 6 SCC 510.
181

designated in the Act and are to continue under the Act and any
or all the provisions of the Act are to apply to them. The learned
Solicitor-General contends that the savings clause enacted by the
proviso, even if treated as substantive law, must be taken to
apply only to suits and proceedings pending at the time of the
repeal which, but for the proviso, would be governed by the Act
repealed. According to the learned Attorney-General, the effect of
the savings is much wider, and it applies to such cases as come
within the words of the proviso, whenever the Act is extended to
new areas.”
(emphasis supplied)

194. In Motiram Ghelabhai v. Jagan Nagar & Ors138 , the view taken in

Bhojraj (supra) was affirmed and applied. It was observed that provisos

are often added not as exceptions or qualifications to the main

enactment but as savings clauses, in which case they will not be

construed as controlled by the section. In Madhu Gopal v. VI Additional

District Judge & Ors.139 this Court has laid down that in any event, it is

a well-settled principle of construction that unless clearly indicated, a

proviso would not take away substantive rights given by the section or

the sub-section. In The King v. Dominion Engineering Co. Ltd.140, it was

held that where a section of an enactment contains two provisions and the

second proviso is repugnant in any way to the first, the second proviso

must prevail for it stands last in the enactment and speaks the last

intention of the makers. The following observations were made:

“(7) Proviso 2 qualifies the main enactment in the matter of
delivery no less than does proviso 1 and it also qualifies proviso
1 itself. For it provides “further” that “in any case where there is
no physical delivery of the goods,” the tax is to be payable when
the property in the goods passes to the purchaser. Thus where
there is no physical delivery the notional delivery which proviso
1 introduces is rendered inapplicable. Anger J. found in proviso
2 an alternative ground for his decision against the Crown and it

138
(1985) 2 SCC 279
139 1988 (4) SCC 644
140
AIR (34) 1947 PC 94
182

is the main ground of Hudson J.’s judgment in the Supreme Court.
In their Lordships’ view this proviso presents an insuperable
obstacle to the Crown’s claim. There has been no physical
delivery of the goods by the Dominion Company to the Pulp
Company. The proviso enacts that “in any case” where there has
been no physical delivery the tax is to be payable when the
property passes. The property in the goods in question has never
passed to the Pulp Company. Consequently the tax has nevern
become payable. If proviso 2 is repugnant in any way to proviso
1 it must prevail for it stands last in the enactment and so to quote
Lord Tenterden C.J., “speaks the last intention of the maker”
((1831), 2 B. & Ad. 818 at p.821). The word is with the
respondent, the Dominion Company, and must prevail.”

195. The proviso thus, is not foreign to compensation to be paid under

section 24(2). It provides what is dealt with in Section 24(2) and takes

to its logical conclusion, and provides for higher compensation, where

there is and can be no lapsing of acquisition proceedings. The rule of

construction- as is clear from the preceding case law discussed, is that

the proviso should be limited in its operation to the subject-matter in a

clause. A proviso is ordinarily a proviso and has to be harmoniously

construed with the provisions. In our opinion, the proviso is capable of

being harmoniously construed with Section 24(2) and not with section

24(1)(b), once we interpret the word ‘or’ as ‘nor’ in section 24(2).

196. In keeping with the ratio in the aforesaid decisions, this court is

of the considered view that the proviso cannot nullify the provision of

Section 24(1)(b) nor can it set at naught the real object of the enactment,

but it can further by providing higher compensation, thus dealing with

matters in Section 24 (2). Therefore, in effect, where award is not made

[Section 24 (1)(a)] as well as where award is made but compensation is

not deposited in respect of majority of the landowners in a notification
183

(for acquisition) [i.e. proviso to Section 24 (2)] compensation is payable

in terms of the new Act, i.e., Act of 2013.

197. For the aforesaid reasons, considering the placement of the

proviso, semi-colon having been used at the end of section 24(2),

considering the interpretation of section 24(1)(b) and the repugnancy

which would be caused in case the proviso is lifted which is not

permissible and particularly when we read the word ‘or’ as ‘nor’ in

section 24(2), it has to be placed where the legislature has legislated it,

it has not been wrongly placed as part of section 24(2) but is intended

for beneficial results of higher compensation for one and all where there

is no lapse, but amount not deposited as required. Higher compensation

is contemplated by the Act of 2013, which intention is fully carried

forward by the placement and interpretation.

In re: What is the meaning to be given to the word “paid” used in
section 24(2) and “deposited” used in the proviso to section 24(2)

198. Connected with this issue are questions like what is the

consequence of payment not being made under section 31(1) and what

are the consequences of amount not deposited under section 31(2). The

provision of section 24(2) when it provides that compensation has not

been paid where award has been made 5 years or more prior to the

commencement of the Act of 2013. In contradistinction to that, the

proviso uses the expression “an award has been made and

compensation in respect of a majority of land holdings has not been
184

deposited in the account of the beneficiaries”. We have to find out when

an amount is required to be deposited under the Act of 1894 and how

the payment is made under the Act of 1894. The provisions of Section

31 of the Act of 1894 are attracted to the interpretation of provisions of

section 24(2) to find out the meaning of the words ‘paid’ and ‘deposited’.

Section 31(1) makes it clear that on passing of award compensation has

to be tendered to the beneficiaries and Collector shall pay it to them.

The payment is provided only in section 31(1). The expression ‘tender’

and pay to them in section 31(1) cannot include the term ‘deposited.’

199. Section 31 (2) of the Act of 1894 deals with deposit in case

Collector is ‘prevented’ from making payment by one or more

contingencies mentioned in section 31(2). The deposit follows if the

Collector is prevented from making payment. In case Collector is

prevented from making payment due to contingencies such refusal to

receive the amount, or if there be no person competent to alienate the

land, or if there is a dispute as to the title to receive the compensation

or as to the apportionment of it, he (i.e. the Collector) may withhold it

or in case there is dispute as to apportionment, he may ask the parties

to get a decision from the Reference Court i.e., civil court and to clear

the title. In such exigencies, the amount of compensation is required to

be deposited in the court to which reference would be submitted under

section 18. Section 31(2) requires deposit in case of reference under
185

section 18 and not the reference, which may be sought under section

30 or section 28A of the Act of 1894.

200. Section 24(2) deals with the expression where compensation has

not been paid. It would mean that it has not been tendered for payment

under section 31(1). Though the word ‘paid’ amounts to a completed

event however once payment of compensation has been

offered/tendered under section 31(1), the acquiring authority cannot be

penalized for non-payment as the amount has remained unpaid due to

refusal to accept, by the landowner and Collector is prevented from

making the payment. Thus, the word ‘paid’ used in section 24(2) cannot

be said to include within its ken ‘deposit’ under section 31(2). For that

special provision has been carved out in the proviso to section 24(2),

which deals with the amount to be deposited in the account of

beneficiaries. Two different expressions have been used in section 24.

In the main part of section 24, the word ‘paid’ and in its proviso

‘deposited’ have been used.

201. The consequence of non-deposit of the amount has been dealt

with in section 34 of the Act of 1894. As per section 24(2), if the amount

has not been paid nor possession has been taken, it provides for lapse.

Whereas the proviso indicates amount has not been deposited with

respect to a majority of land holdings in a case initiated under the Act

of 1894 for 5 years or more. The period of five years need not have been
186

specified in the proviso as it is part of section 24(2) and has to be read

with it, particularly in view of the colon and placement by the legislature

as held above. Two different consequences of non-deposit of

compensation are: (i) higher compensation in a case where possession

has been taken, payment has been made to some and amount has not

been deposited with respect to majority of the holdings, (ii) in case there

is no lapse, the beneficiaries would be entitled to interest as envisaged

under section 34 from the date of taking possession at the rate of 9%

per annum for the first year and after that @ 15% per annum.

202. The word “paid” has been defined in the Oxford Dictionary to mean

thus:

“paid past and past participle of pay”; Give a sum of money thus owned.”

Cambridge English Dictionary, defines “paid” as follows:

“being given money for something.”

P. Ramanatha Aiyar’s Advance Law Lexicon, 3rd Edition, 2005,

uses the following definition of “paid”:

“applied; settled: satisfied.”

203. The word “paid” in Section 31(1) to the landowner cannot include

in its ambit the expression “deposited” in court. Deposit cannot be said

to be payment made to landowners. Deposit is on being prevented from

payment. However, in case there is a tender of the amount that is to

mean amount is made available to the landowner that would be a

discharge of the obligation to make the payment and in that event such
187

a person cannot be penalised for the default in making the payment. In

default to deposit in court, the liability is to make the payment of

interest under Section 34 of Act of 1894. Sections 32 and 33 (which

had been relied upon by the landowners’ counsel to say that valuable

rights inhere, in the event of deposit with court, thus making deposit

under Section 31 mandatory) provide for investing amounts in the

Government securities, or seeking alternative lands, in lieu of

compensation, etc. Such deposits, cannot fetch higher interest than

the15 per cent contemplated under Section 34, which is pari materia to

Section 80 of Act of 2013. Section 34 is pari materia to section 80 of

Act of 2013 in which also the similar rate of interest has been specified.

Even if the amount is not deposited in Reference Court nor with the

treasury as against the name of the person interested who is entitled to

receive it, if Collector has been prevented to make the payment due to

exigencies provided in Section 31(2), interest to be paid. However, in

case the deposit is made without tendering it to the person interested,

the liability to pay the interest under section 34, shall continue. Even

assuming deposit in the Reference Court is taken to be mandatory, in

that case too interest has to follow as specified in section 34. However,

acquisition proceeding cannot lapse due to non-deposit.

204. The concept of “deposit” is different and quite apart from the word

“paid”, due to which, lapse is provided in Section 24 of Act of 2013. In

the case of non-deposit for the majority of landholdings, higher
188

compensation would follow as such word “paid” cannot include in its

ambit word “deposited”. To hold otherwise would be contrary to

provisions contained in Section 24(2) and its proviso carrying different

consequences. It is provided in Section 34 of Act of 1894, in case

payment has not been tendered or paid, nor deposited the interest has

to be paid as specified therein. In Section 24(2) also lapse is provided

in case amount has not been paid and possession has not been taken.

205. In our considered opinion, there is a breach of obligation to

deposit even if it is taken that amount to be deposited in the reference

court in exigencies being prevented from payment as provided in Section

31(2). The default will not have the effect of reopening the concluded

proceedings. The legal position and consequence which prevailed from

1893 till 2013 on failure to deposit was only the liability for interest and

all those transactions were never sought to be invalidated by the

provisions contained in Section 24. It is only in the case where in a

pending proceeding for a period of five years or more, the steps have not

been taken for taking possession and for payment of compensation,

then there is a lapse under section 24(2). In case amount has not been

deposited with respect to majority of land holdings, higher

compensation has to follow. Both lapse and higher compensation are

qualified with the condition of period of 5 years or more.

206. It was submitted that mere tender of amount is not payment. The

amount has to be actually paid. In our opinion, when amount has been
189

tendered, the obligation has been fulfilled by the Collector. Landowners

cannot be forced to receive it. In case a person has not accepted the

amount wants to take the advantage of non-payment, though the

amount has remained due to his own act. It is not open to him to

contend that amount has not been paid to him, as such, there should

be lapse of the proceedings. Even in a case when offer for payment has

been made but not deposited, liability to pay amount along with interest

subsist and if not deposited for majority of holding, for that adequate

provisions have been given in the proviso also to Section 24(2). The

scheme of the Act of 2013 in Sections 77 and 80 is also the same as

that provided in Sections 31 and 34 of the Act of 1894.

207. It was urged that landowners can seek investment in an interest

bearing account, there is no doubt about that investment can be sought

from the court under Sections 32 and 33 of Act of 1894, but interest in

Government securities is not more than what is provided in section 34

at the rate of 9 percent from the date of taking possession for one year

and thereafter, at the rate of 15 percent. We take judicial notice of the

fact in no other Government security rate of interest is higher on the

amount being invested under sections 32 and 33 of the Act of 1894.

Higher rate of interest is available under section 34 to the advantage of

landowners. It was submitted that in case the amount is deposited in

the court, it is on behalf of the beneficiary. The submission overlooks

the form in which it used to be deposited in the treasury too, that
190

amount is also credited in the treasury payable to the beneficiary

specified in his name with land details, date of award, etc.

208. There is another reason why this court holds that such an

interpretation is reasonable and in tune with Parliamentary intent.

Under the old regime, it was open to the Collector to fix a convenient

date or dates for announcement of award, and tender payment. In the

event of refusal by the landowner to receive, or in other cases, such as

absence of the true owner, or in case of dispute as to who was to receive

it, no doubt, the statute provided that the amount was to be deposited

with the court: as it does today, under Section 77. Yet, neither during

the time when the Act of 1894 was in operation, nor under the Act of

2013, the entire acquisition does not lapse for non-deposit of the

compensation amount in court. This is a significant aspect which none

of the previous decisions have noticed. Thus, it would be incorrect to

imply that failure to deposit compensation [in court, under Section 31

(2)] would entail lapse, if the amounts have not been paid for five years

or more prior to the coming into force of the Act of 2013. Such an

interpretation would lead to retrospective operation, of a provision, and

the nullification of acquisition proceedings, long completed, by

imposition of a norm or standard, and its application for a time when it

did not exist.

209. If the expression “deposited” is held to be included in the

expression “paid” used in Section 24(2) of the Act of 2013, inconsistency
191

and repugnancy would be caused as between the proviso and the main

sub-section, which has to be avoided and the non-compliance of the

provisions of Section 31(2) is not fatal. Even if the amount has not been

deposited, higher compensation has to follow in the exigency proviso to

Section 24(2).

210. In Black’s Law Dictionary, the word “tender” has been defined to

mean thus:

“tender, n. (16c) 1. A valid and sufficient offer of
performance; specific, an unconditional offer of money or
performance to satisfy a debt or obligation a tender of
delivery. The tender may save the tendering party from a penalty
for non-payment or non-performance or may, if the other party
unjustifiably refuses the tender, place the other party in
default. Cf. OFFER OR PERFORMANCE; CONSIGNATION.”

211. It is apparent that “tender” of the amount saves the party

tendering it from the consequence to be visited on non-payment of the

amount. The obligation to make the payment has been considered in

various other laws and decisions. When obligation to payment is

fulfilled as to the scheme in the context of a particular act, for that

purpose, decisions under various other laws are relevant and cannot be

said to be irrelevant.

212. In The Straw Board Manufacturing Co. Ltd., Saharanpur v.

Gobind141 , this Court considered the provisions requiring payment of

one month’s wage under Section 33 of Industrial Disputes Act for

141
1962 (Supp 3) SCR 318
192

making a valid discharge or dismissal. This Court has held that the

employer has tendered the wages and that would amount for payment,

otherwise a workman can make the provision unworkable by refusing

to take the wages. This Court has observed thus:

“(8) Let us now turn to the words of the proviso in the background
of what we have said above. The proviso lays down that no
workman shall be discharged or dismissed unless he has been
paid wages for one month and an application has been made by
the employer to the authority before which the proceeding is
pending for approval of the action taken by the employer. It will
be clear that two kinds of punishment are subject to the
conditions of the proviso, namely, discharge or dismissal. Any
other kind of punishment is not within the proviso. Further
the proviso lays down two conditions, namely, (i) payment of
wages for one month and (ii) making of an application by the
employer to the authority before which the proceeding is pending
for approval of the action taken. It is not disputed before us that
when the proviso lays down the conditions as to payment of one
month’s wages, all that the employer is required to do in order to
carry out that condition is to tender the wages to the employee.
But if the employee chooses not to accept the wages he cannot
come forward and say that there has been no payment of wages
to him by the employer. Therefore, though S. 33 speaks of
payment of one month’s wages it can only mean that the
employer has tendered the wages and that would amount to
payment, for otherwise a workman could always make the
section unworkable by refusing to take the wages. So far as the
second condition about the making of the application is
concerned, the proviso requires that the application should be
made for approval of the action taken by the employer.”
(emphasis supplied)

213. In The Management of Delhi Transport Undertaking v. The

Industrial Tribunal, Delhi & Anr 142, a three-Judge Bench of this Court

has laid down the law to the similar effect. It is not actual payment, but

tender of amount which is necessary to fulfil obligation to pay. This

Court observed thus:

“4. …The proviso does not mean that the wages for one month
should have been actually paid, because in many cases the

142
1965 (1) SCR 998
193

employer can only tender the amount before the dismissal but
cannot force the employee to receive the payment before
dismissal becomes effective. In this case the tender was
definitely made before the order of dismissal became effective
and the wages would certainly have been paid if Hari Chand had
asked for them. There was no failure to comply with the provision
in this respect.”
(emphasis supplied

214. In Indian Oxygen Ltd. v. Narayan Bhoumik143, it was held that the

“the condition as to payment in the proviso does not mean that wages

have to be actually paid but if wages are tendered or offered, such a

tender or offer would be sufficient compliance” with the statute. The

Benares State Bank Ltd. v. The Commissioner of Income Tax, Lucknow144,

was decided in the context of Section 14(2)(c) of the Income Tax Act,

1922. It was observed that “paid” under Section 16 does not

contemplate actual receipt of the dividend by the Member of the

community. It is to be made unconditionally available to the members

entitled to it. It observed thus:

“5. …This Court observed in J. Dalmia v. Commissioner of
Income-tax, Delhi
, 53 ITR 83 that the expression “paid” in Section
16(2)
does not contemplate actual receipt of the dividend by the
member: in general, dividend may be said to be paid within the
meaning of Section 16(2) when the company discharges its
liability and makes the amount of dividend unconditionally
available to the member entitled thereto. …”

215. Two different expressions have been used in Section 24(2). The

expression “paid” has been used in Section 24(2) and whereas in the

proviso “deposited” has been used. “Paid” cannot include “deposit”, or

else Parliament would have used different expressions in the main sub-

143    (1968) 1 PLJR 94
144
      (1969) 2 SCC 316
                                       194

section and its proviso, if the meaning were to be the same. The Court

cannot add or subtract any word in the statute and has to give plain

and literal meaning and when compensation has not been paid under

Section 24(2), it cannot mean compensation has not been deposited as

used in the proviso. While interpreting the statutory provisions,

addition or subtraction in the legislation is not permissible. It is not

open to the court to either add or subtract a word. There cannot be any

departure from the words of law, as observed in legal maxim “A Verbis

Legis Non Est Recedendum”. In Principles of Statutory Interpretation

(14th Edition) by Justice G.P. Singh, plethora of decisions have been

referred. There is a conscious omission of the word “deposit” in Section

24(2), which has been used in the proviso. Parliament cannot be said

to have used the different words carrying the same meaning in the same

provision, whereas words “paid” and “deposited” carry a totally different

meaning. Payment is actually made to the landowner and deposit is

made in the court, that is not the payment made to the landowner. It

may be discharge of liability of payment of interest and not more than

that. Applying the rule of literal construction also natural, ordinary and

popular meaning of the words “paid” and “deposited” do not carry the

same meaning; the natural and grammatical meaning has to be given

to them, as observed in Principles of Statutory Interpretation by Justice

G.P. Singh (at page 91) thus:

“… Natural and grammatical meaning. The words of a statute
are first understood in their natural, ordinary or popular sense
and phrases and sentences are construed according to their
grammatical meaning, unless that leads to some absurdity or
195

unless there is something in the context, or in the object of the
statute to suggest the contrary.” “The true way”, according
to LORD BROUGHAM is, “to take the words as the Legislature
have given them, and to take the meaning which the words given
naturally imply, unless where the construction of those Words is,
either by the preamble or by the context of the words in question,
controlled or alter “; and in the words of VISCOUNT HALDANE,
L.C., if the language used “has a natural meaning we cannot
depart from that meaning unless reading the statute as a whole,
the context directs us to do so. In an oft-quoted passage, LORD
WENSLEYDALE stated the Rule thus: “In construing wills and
indeed statutes and all written instruments, the grammatical and
ordinary sense of the word is adhered to, unless that would lead
to some absurdity, or some repugnance or inconsistency with the
rest of the instrument in which case the grammatical and
ordinary sense of the words may be modified, so as to avoid that
absurdity, and inconsistency, but no further”. And stated LORD
ATKINSON: “In the construction of statutes, their words must be
interpreted in their ordinary grammatical sense unless there be
something in the context, or in the object of the statute in which
they occur or in the circumstances in which they are used, to
show that they were used in a special sense different from their
ordinary grammatical sense”. 28 VISCOUNT SIMON, L.C., said:
“The golden Rule is that the words of a statute must prima facie
be given their ordinary meaning”. Natural and ordinary meaning
of words should not be departed from “unless it can be shown
that the legal context in which the words are used requires a
different meaning”. Such a meaning cannot be departed from by
the judges “in the light of their own views as to policy” although
they can “adopt a purposive interpretation if they can find in the
statute read as a whole or in material to which they are permitted
by law to refer as aids to interpretation an expression of
Parliament’s purpose or policy”. For a modern statement of the
rule, one may refer to the speech of LORD SIMON OF GLAISDALE
in a case where he said: “Parliament is prima facie to be credited
with meaning what is said in an Act of Parliament. The drafting
of statutes, so important to a people who hope to live under
the Rule of law, will never be satisfactory unless courts seek
whenever possible to apply ‘the golden rule’ of construction, that
is to read the statutory language, grammatically and
terminologically, in the ordinary and primary sense which it
bears in its context, without omission or addition. Of
course, Parliament is to be credited with good sense; so that
when such an approach produces injustice, absurdity,
contradiction or stultification of statutory objective the language
may be modified sufficiently to avoid such disadvantage, though
no further”. The Rules stated above have been quoted with
approval by the Supreme Court…….”
(emphasis supplied)

216. The same work also notes that when two different expressions are

used in the same provision of a statute, there is a presumption that they
196

are not used in the same sense. The following passage is relevant

(Principles of Statutory Interpretation by Justice G.P. Singh at page 395):

“…….When in relation to the same subject matter, different words
are used in the same statute, there is a presumption that they are
not used in the same sense.

In construing the words ‘distinct matters’ occurring in Section 5 of
the Stamp Act, 1899, and in concluding that these words have
not the same meaning as the words ‘two or more of the
descriptions in Schedule I’ occurring in Section 6, VENKATARAMA
AIYAR, J., observed: “When two words of different import are
used in a statute in two consecutive provisions, it would be
difficult to maintain that they are used in the same sense.”
Similarly, while construing the word ‘gain’ Under Section 3(ff) of
the Bombay Municipal Corporation Act, 1888, which used the
words ‘profit or gain’, the Supreme Court relied on the dictionary
meanings of the words to hold that the word ‘gain’ is not
synonymous with the word ‘profit’ as it is not restricted to
pecuniary or commercial profits, and that any advantage or
benefit acquired or value addition made by some activities would
amount to ‘gain’…….”

***14. Brighton Parish Guardians v. Strand Union
Guardians, (1891) 2 QB 156, p. 167 (CA); Member, Board
of Revenue v. Arthur Paul Benthall
AIR 1956 SC 35, p. 38 : 1955
(2) SCR 842; CIT v. East West Import & Export (P.) Ltd.,
Jaipur AIR 1989 SC 836, p. 838 : (1989) 1 SCC 760; B.R.
Enterprises v. State of U.P
. AIR 1999 SC 1867, p. 1902: (1999) 9
SCC 700 (‘trade and business’ in Article 298 have different
meaning from ‘trade and commerce’ in Article 301); ShriIshal
Alloy Steels Ltd. v. JayaswalasNeco Ltd., JT 2001 (3) SC 114, p.
119: (2001) 3 SCC 609 : AIR 2001 SC 1161 (The words ‘a bank’
and ‘the bank’ in Section 138 N.I. Act, 1881 do not have the same
meaning); The Oriental Insurance Co. Ltd. V. Hansrajbhai v.
Kodala AIR 2001 SC 1832, p. 1842 : (2001) 5 SCC 175; Kailash
Nath Agarwal v. Pradeshiya Indust and Inv. Corporation of
U.P., 2003 AIR SCW 1358, p. 1365: (2003) 4 SCC 305, p. 313.
(The words ‘proceeding’ and ‘suit’ used in the same Section
construed differently); But in Paramjeet Singh Pathak v. ICDS
Ltd
., (2006) 13 SCC 322: AIR 2007 SC 168 different view was
taken therefore in Zenith Steel Tubes v. Sicom Ltd., (2008) 1 SCC
533: AIR 2008 SC 451 case referred to a larger Bench; D.L.F.
Qutab Enclave Complex Educational Charitable Trust v. State of
Haryana
, 2003 AIR SCW 1046, p. 1057: AIR 2003 SC 1648 :
(2003) 5 SCC 622 (The expressions ‘at his own cost’ and ‘at its
cost,’ used in one Section given different meanings)”
197

217. In Privy Council decisions in Crawford v. Spooner145 and Lord

Howard de Walden v. IRC & Anr146 following observations have been

made:

“… we cannot aid the legislature’s defective phrasing of an Act,
we cannot add or mend and, by construction, makeup
deficiencies which are left there.


It is contrary to all rules of construction to read words into an Act
unless it is necessary to do so. Similarly, it is wrong and
dangerous to proceed by substituting some other words for words
of the statute. Speaking briefly the court cannot reframe the
legislation for the very good reason that it has no power to
legislate.”

218. In V.L.S. Finance Ltd. (supra) this Court observed that:

“17. Ordinarily, the offence is compounded under the provisions
of the Code of Criminal Procedure and the power to accord
permission is conferred on the court excepting those offences for
which the permission is not required. However, in view of the non-
obstante clause, the power of composition can be exercised by the
court or the Company Law Board. The legislature has conferred
the same power on the Company Law Board which can exercise
its power either before or after the institution of any prosecution
whereas the criminal court has no power to accord permission for
composition of an offence before the institution of the proceeding.
The legislature in its wisdom has not put the rider of prior
permission of the court before compounding the offence by the
Company Law Board and in case the contention of the appellant
is accepted, same would amount to addition of the words “with
the prior permission of the court” in the Act, which is not
permissible.

18. As is well settled, while interpreting the provisions of a
statute, the court avoids rejection or addition of words and resorts
to that only in exceptional circumstances to achieve the purpose
of the Act or give purposeful meaning. It is also a cardinal rule of
interpretation that words, phrases, and sentences are to be given
their natural, plain, and clear meaning. When the language is
clear and unambiguous, it must be interpreted in an ordinary
sense, and no addition or alteration of the words or expressions
used is permissible. As observed earlier, the aforesaid enactment
was brought in view of the need of leniency in the administration
of the Act because a large number of defaults are of technical

145
(1846) 6 Moore PC 1
146
(1948) 2 AER 825
198

nature, and many defaults occurred because of the complex
nature of the provision.

(emphasis supplied)

219. In Bharat Aluminium Company v. Kaiser Aluminium Technical

Services Inc.147 , this Court observed thus:

“65. Mr. Sorabjee has also rightly pointed out the observations
made by Lord Diplock in Duport Steels Ltd. v. Sirs, (1980) 1 WLR

142. In the aforesaid judgment, the House of Lords disapproved
the approach adopted by the Court of Appeal in discerning the
intention of the legislature; it is observed that: (WLR p. 157 C-D)
“… the role of the judiciary is confined to ascertaining from the
words that Parliament has approved as expressing its intention
what that intention was, and to giving effect to it. Where the
meaning of the statutory words is plain and unambiguous, it is
not for the Judges to invent fancied ambiguities as an excuse for
failing to give effect to its plain meaning because they themselves
consider that the consequences of doing so would be inexpedient,
or even unjust or immoral. In controversial matters such as are
involved in industrial relations, there is room for differences of
opinion as to what is expedient, what is just and what is morally
justifiable. Under our Constitution it is Parliament’s opinion on
these matters that is paramount.”

(emphasis supplied)

In the same judgment, it is further observed: (WLR p. 157 F)
“… But if this be the case it is for Parliament, not for the judiciary,
to decide whether any changes should be made to the law as
stated in the Acts….”
(emphasis supplied)
***

67. We are unable to accept the submission of the learned
counsel for the appellants that the omission of the word “only”
from Section 2(2) indicates that applicability of Part I of the
Arbitration Act, 1996 is not limited to the arbitrations that take
place in India. We are also unable to accept that Section 2(2)
would make Part I applicable even to arbitrations which take
place outside India. In our opinion, a plain reading of Section 2(2)
makes it clear that Part I is limited in its application to arbitrations
which take place in India. We are in agreement with the
submissions made by the learned counsel for the respondents,
and the interveners in support of the respondents, that
Parliament by limiting the applicability of Part I to arbitrations
which take place in India has expressed a legislative declaration.
It has clearly given recognition to the territorial principle.
Necessarily therefore, it has enacted that Part I of the Arbitration
Act, 1996 applies to arbitrations having their place/seat in India.

***

147
(2012) 9 SCC 552
199

82. Another strong reason for rejecting the submission made by
the learned counsel for the appellants is that if Part I were to be
applicable to arbitrations seated in foreign countries, certain
words would have to be added to Section 2(2). The section would
have to provide that “this part shall apply where the place of
arbitration is in India and to arbitrations having its place out of
India.” Apart from being contrary to the contextual intent and
object of Section 2(2), such an interpretation would amount to a
drastic and unwarranted rewriting/alteration of the language of
Section 2(2). As very strongly advocated by Mr Sorabjee, the
provisions in the Arbitration Act, 1996 must be construed by their
plain language/terms. It is not permissible for the court while
construing a provision to reconstruct the provision. In other
words, the court cannot produce a new jacket, whilst ironing out
the creases of the old one. In view of the aforesaid, we are unable
to support the conclusions recorded by this Court as noticed
earlier.”
(emphasis supplied)

220. In Harbhajan Singh (supra) the following observations were made:

“7. …. Ordinary, grammatical and full meaning is to be assigned
to the words used while interpreting a provision to honour the rule
— the legislature chooses appropriate words to express what it
intends, and therefore, must be attributed with such intention as
is conveyed by the words employed so long as this does not result
in absurdity or anomaly or unless material — intrinsic or external
— is available to permit a departure from the rule.”
(emphasis supplied)

221. In The Member, Board of Revenue v. Arthur Paul Benthall 148 this

Court held as under:

“4. We are unable to accept the contention that the word
“matter” in S. 5 was intended to convey the same meaning as the
word “description” in S. 6. In its popular sense, the expression
“distinct matters” would connote something different from distinct
“categories”. Two transactions might be of the same description,
but all the same, they might be distinct.

If A sells Black-acre to X and mortgages White-acre to Y, the
transactions fall under different categories, and they are also
distinct matters. But if A mortgages Black-acre to X and
mortgages White-acre to Y, the two transactions fall under the
same category, but they would certainly be distinct matters.
If the intention of the legislature was that the expression
‘distinct matters’ in S. 5 should be understood not in its popular
sense but narrowly as meaning different categories in the
Schedule, nothing would have been easier than to say so. When
two words of different import are used in a statute in two
consecutive provisions, it would be difficult to maintain that they

148
1955 (2) SCR 842,
200

are used in the same sense, and the conclusion must follow that
the expression “distinct matters” in S. 5 and “descriptions” in
section 6 have different connotations.”
(emphasis supplied)

222. In Commissioner of Income Tax, New Delhi v. M/s. East West

Import and Export (P) Ltd149, it was observed as under:

“7. The Explanation has reference to the point of time at two
places: the first one has been stated as “at the end of the previous
year” and the second, which is in issue, is “in the course of such
previous year”. Counsel for the revenue has emphasised upon the
feature that in the same Explanation reference to time has been
expressed differently and if the legislative intention was not to
distinguish and while stating “in the course of such previous
year” it was intended to convey the idea of the last day of the
previous year, there would have been no necessity of expressing
the position differently. There is abundant authority to support
the stand of the counsel for the revenue that when the situation
has been differently expressed the legislature must be taken to
have intended to express a different intention.”
(emphasis supplied)

Several other decisions have reiterated the same proposition, i.e

that when the legislature uses two different expressions in the same

statute, they must be given different meanings, to carry out legislative

intent.150

223. The land owners had argued that the obligation to pay gets

discharged only when compensation is actually paid and/or deposited.

Even if it is received under protest under Section 31(1), it is finally

accepted by the landowners post-settlement by the Reference Court. We

149
(1989) 1 SCC 760
150B.R. Enterprises v. State of U.P. and Ors., (1999) 9 SCC 700; Kailash Nath Agarwal and
Ors. v. Pradeshiya Industrial & Investment Corporation of U.P. Ltd. and Anr
., (2003) 4 SCC
305 (which interpreted “proceeding” and “suit” differently; In DLF Qutab Enclave Complex
Educational Charitable Trust v. State of Haryana and Ors
., (2003) 5 SCC 622 (where “at his
cost” and “at its cost” were interpreted to mean different situations.
201

are not able to accept the submission as Section 34 of the Act of 1894,

is clear even if the amount is not paid or deposited, it carries interest.

The logic behind this is that if the State is retaining the amount with

peace and its liability to pay does not cease, but it would be liable to

make the payment with interest as envisaged therein. Once tender is

made, obligation to pay is fulfilled so that the amount cannot be said to

have been paid, but obligation to pay has been discharged and if a

person who has not accepted it, cannot penalise the other party for

default to pay and non-deposit carries only interest as money had been

retained with the Government.

224. Thus, in our opinion, the word “paid” used in Section 24(2) does

not include within its meaning the word “deposited”, which has been

used in the proviso to Section 24(2). Section 31 of the Act of 1894, deals

with the deposit as envisaged in Section 31(2) on being ‘prevented’ from

making the payment even if the amount has been deposited in the

treasury under the Rules framed under Section 55 or under the

Standing Orders, that would carry the interest as envisaged under

Section 34, but acquisition would not lapse on such deposit being made

in the treasury. In case amount has been tendered and the landowner

has refused to receive it, it cannot be said that the liability arising from

non-payment of the amount is that of lapse of acquisition. Interest

would follow in such a case also due to non-deposit of the amount.

Equally, when the landowner does not accept the amount, but seeks a
202

reference for higher compensation, there can be no question of such

individual stating that he was not paid the amount (he was determined

to be entitled to by the collector). In such case, the landowner would be

entitled to the compensation determined by the Reference court.

In re: Rules framed under Section 55 and the Standing Orders
issued by State Governments

225. It was urged on behalf of acquiring Authorities that various State

Governments have framed rules under Section 55 of the Act of 1894

and/or have issued the Standing Orders/instructions with respect to

the Government money under Article 283 of the Constitution of India.

These Standing Orders and Rules have remained in force from time

immemorial; their provisions require the amount to be tendered, notice

to be issued to the landowners to collect the amount of compensation

awarded to them. If they do not appear and apply to the reference under

Section 18, the officer shall cause the amounts due to be paid into the

treasury as revenue deposits payable to the persons to whom they are

respectively due and vouched for in the accompanying form (marked E).

When the payee ultimately claims the payment, they shall be paid in

the same manner as ordinary revenue deposits. The Land Acquisition

(Bihar and Orissa) Rules were framed under Section 55 of the Act of

1894. Rule 10 thereof is extracted hereunder:

“10. In giving notice of the award under Section 12(2) and
tendering payment Under Section 31(1), to such of the persons
interested as were not present personally or by their
representatives when the award was made, the officer shall
require them to appear personally or by representatives by a
certain date to receive payment of the compensation awarded to
them, intimating also that no interest will be allowed to them if
203

they fail to appear. If they do not appear, and do not apply for
reference to the Civil Court Under Section 18, the officer shall after
any further endeavour to secure their attendance that may seem
desirable, cause the amounts due to be paid into the Treasury as
Revenue deposits payable to the persons to whom they are
respectively due and vouched for in the accompanying form
(marked E). The officer shall also give notice to the payees of such
deposits, the Treasury in which the deposits specifying have been
made. When the payees ultimately claim payment of sums placed
in deposit, the amounts will be paid to them in the same manner
as ordinary revenue deposits. The officer should, as far as
possible, arrange to make the payments due in or near the village
to which the payees belong, in order that the number of
undisbursed sums to be placed in deposit on account of non-
attendance may be reduced to a minimum. Whenever payment is
claimed through a representative whether before or after deposit
of the amount awarded, such representative, must show legal
authority for receiving the compensation on behalf of his
principal.”
(emphasis supplied)

226. In the State of Assam, rules have also been framed under Section

55 of the Act of 1894, dealing with the deposit. Rule 9 provides that in

case reference is not sought under Section 18, the amount has to be

deposited in treasury. Rule 9 is extracted hereunder:

“9. In giving notice of the award Under Section 12(2) and
tendering payment Under Section 31(1), to such of the persons
interested as were not present personally or by their
representatives when the award was made, the Collector shall
require them to appear personally or by representatives by a
certain date, to receive payment of the compensation awarded to
them intimating also that no interest will be allowed to them, if
they fail to appear. If they do not appear and do not apply for a
reference to the Civil Court Under Section 18, he shall, after any
further endeavour to secure their attendance or make payment
that may seem desirable, cause the amounts due to be paid into
the WW as revenue deposits payable to the persons to whom they
are respectively due, and vouched for in the form prescribed or
approved by Government from time to time. He shall also give
notice to the payees of such deposits, specifying the Treasury in
which the deposits have been made. When the payees ultimately
claim payment of sums placed in deposit, the amount will be paid
to them in the same manner as ordinary revenue deposits. The
Collector should, as far as possible, arrange to make the payment
due in or near the village to which the land pertains in order that
the number of undisbursed sum to be placed in deposit on
account of nonattendance may be reduced to a minimum.
Whenever payment is claimed through a representative, such
204

representative, must show legal authority for receiving the
compensation on behalf of the principal.”
(emphasis supplied)

227. In the State of Karnataka too similar rules were framed in 1965

under Section 55 of the Act of 1894. Similarly, in the State of Kerala

also Rule 14(2) of the Land Acquisition (Kerala) Rules, 1990 were framed

under Section 55 of the Act of 1894, provided that payment relating to

award shall be made or the amount shall be credited to the court or

revenue deposit (treasury) within one month from the date of the award.

Similar rules were framed in the State of Bihar and Orissa.

228. Standing Order No.28 was issued in 1909 by the State of Punjab

and was applicable to Delhi also, which provided five modes of payment

in para 74 and 75 thus:

“74. Methods of making payments.—There are five methods
of making payments:

(1) By direct payments, see Para 75(I) infra
(2) By order on treasury, see Para 75(II) infra
(3) By money order, see Para 75(III) infra
(4) By cheque, see Para 75(IV) infra
(5) By deposit in a treasury, see Para 75(V) infra

75. Direct payments.— * * *
(V) By treasury deposit.— In giving notice of the award under
Section 12(2) and tendering payment under Section 31(1) to such
of the persons interested as were not present personally or by
their representatives when the award was made, the officer shall
require them to appear personally or by representatives by a
certain date to receive payment of the compensation awarded to
them, intimating also that no interest will be allowed to them if
they fail to appear, if they do not appear and do not apply for a
reference to the civil court under Section 18, the officer shall after
any further endeavours to secure their attendance that may seem
desirable, cause the amounts due to be paid to the treasury as
revenue deposits payable to the persons to whom they are
respectively due and vouched for in the form marked E below.
The officer shall also give notice to the payees of such deposits,
205

specifying the treasury in which the deposit has been made.

When the payees ultimately claim payment of sums placed in
deposit, the amounts will be paid to them in the same manner as
ordinary revenue deposit. The officer should, as far as possible,
arrange to make the payments due in or near the village to which
the payee belong in order that the number of undisbursed sums
to be placed in deposits on account of non-attendance may be
reduced to a minimum. Whenever payment is claimed through a
representative whether before or after deposit of the amount
awarded, such representative, must have legal authority for
receiving the compensation on behalf of his principal.”

Sub-para (V) of the above made it clear that payment is credited

to the treasury when a person who is served with a notice under Section

12(2) of the Act of 1894, is not present and the award is passed. When

a notice is given to receive the payment of compensation and in case

they fail to appear, the amount has to be paid to the treasury as revenue

deposit payable to the landowner.

229. Rules and the Standing Orders are binding on the concerned

Authorities and they have to follow them. They deposit the amounts in

court only when a reference (for higher compensation) is sought, not
206

otherwise. Even if a person refuses to accept it and the amount is

deposited in court or even it is not tendered, only higher interest follows

under Section 34. Once Rules have prevailed since long and even if it

is assumed that deposit in court is mandatory on being prevented from

payment as envisaged under Section 31(1), the only liability to make the

payment of higher interest is fastened upon the State. The liability to

pay the amount with interest would subsist. When amounts are

deposited in court, there would occur a procedural irregularity and the

adverse consequence envisaged is under Section 34 of the Act of 1894.

The consequence of non-deposit in the court is that the amount of the

landowner cannot be invested in the Government securities as

envisaged under Sections 32 and 33 of the Act of 1894, in which interest

is not more 15 per cent. Thus, no prejudice is caused to the landowners

rather they stand to gain and still payment is safe as it is kept in the

court. We have already held that there is a distinction between the

expression “paid” and “deposited”, thus the amount being deposited as

per Rules in the treasury or as per the Standing Orders considering the

scheme of Section 31 read with Section 34 of the Act of 1894, which are

pari materia to Sections 77 and 80 of the Act of 2013. We are of the

considered opinion that acquisition cannot be invalidated, only higher

compensation would follow in case amount has not been deposited with

respect to majority of land holdings, all the beneficiaries would be

entitled for higher compensation as envisaged in the proviso to Section

24(2).

207

230. Deposit in treasury in place of deposit in court causes no prejudice

to the landowner or any other stakeholder as their interest is adequately

safeguarded by the provisions contained in Section 34 of the Act of

1894, as it ensures higher rate of interest than any other Government

securities. Their money is safe and credited in the earmarked quantified

amount and can be made available for disbursement to him/them.

There is no prejudice caused and every infraction of law would not

vitiate the act.

231. In Jankinath Sarangi v. State of Orissa151, this Court observed that

every infraction of law would not vitiate the act. It has further been

observed that test is actual prejudice has been caused to a person by

the supposed denial to him of a particular right. Following observations

have been made:

“5. From this material it is argued that the principles of natural
justice were violated because the right of the appellant to have
his own evidence recorded was denied to him and further that
the material which was gathered behind his back was used in
determining his guilt. In support of these contentions a number of
rulings are cited chief among which are State of Bombay v. Narul
Latif Khan
, (1965) 3 SCR 135; State of Uttar Pradesh v. Sri C.S.
Sharma
, (1967) 3 SCR 848 and Union of India v. T.R. Varma,
(1958) SCR 499. There is no doubt that if the principles of natural
justice are violated, and there is a gross case, this Court would
interfere by striking down the order of dismissal, but there are
cases and cases. We have to look to what actual prejudice has
been caused to a person by the supposed denial to him of a
particular right. Here the question was a simple one, viz. whether
the measurement book prepared for the contract work had been
properly scrutinised and checked by the appellant or not. He did
the checking in March 1954 and immediately thereafter in May
1954 the Executive Engineer re-checked the measurements and
found that the previous checking had not been done properly.

151 (1969) 3 SCC 392
208

Between March and May there could not be much rainfall, if at
all, and the marks of digging according to the witnesses could not
be obliterated during that time. It is however said that at the 6th
and 7th mile the checking was done in July and by that time rains
might have set in. Even so the witnesses at the sites of the pits
could not be so considerably altered as to present a totally wrong
picture. If anything had happened the earth would have swollen
rather than contracted by reason of rain and the pits would have
become bigger and not smaller. Anyway the questions which
were put to the witnesses were recorded and sent to the Chief
Engineer and his replies were received. No doubt the replies were
not put in the hands of the appellant but he saw them at the time
when he was making the representations and curiously enough
he used those replies in his defence. In other words, they were
not collected behind his back and could be used to his advantage
and he had an opportunity of so using them in his defence. We
do not think that any prejudice was caused to the appellant in
this case by not examining the two retired Superintending
Engineers whom he had cited or any one of them. The case was
a simple one whether the measurement book had been properly
checked. The pleas about rain and floods were utterly useless
and the Chief Engineer’s elucidated replies were not against the
appellant. In these circumstances a fetish of the principles of
natural justice is not necessary to be made. We do not think that
a case is made out that the principles of natural justice are
violated. The appeal must fail and is accordingly dismissed, but
we will make no order as to costs.”
(emphasis supplied)

232. In Sunil Kumar Banerjee v. State of West Bengal and Ors.,152 the

Court observed:

“3. There is no substance in the contention of the appellant that
the 1955 Rules and not the 1969 Rules were followed. As pointed
out by the High Court, in the charges framed against the
appellant and in the first show cause notice the reference was
clearly to the 1969 Rules. The appellant himself mentioned in one
of his letters that the charges have been framed under the 1969
Rules. The enquiry report mentions that Shri Mukherjee was
appointed as an Enquiry Officer under the 1969 Rules. It is,
however true that the appellant was not questioned by the
Enquiry Officer under Rule 8(19) which provided as follows:

“The enquiring authority may, after the member of the services
closes his case and shall if the member of the service has not
examined himself generally question him on the circumstances
appearing against him in the evidence for the purpose of enabling
the member of the service to explain any circumstances appearing
in the evidence against him.”
It may be noticed straight away that this provision is akin to
Section 342 of the Criminal Procedure Code of 1898 and Section
313
of the Criminal Procedure Code of 1973. It is now well
established that mere non-examination or defective examination

152
(1980) 3 SCC 304
209

under Section 342 of the 1898 Code is not a ground for
interference unless prejudice is established, vide, K.C. Mathew v.
State of Travancore-Cochin
, AIR 1956 SC 24; Bibhuti Bhusan Das
Gupta v. State of W.B
., AIR 1969 SC 381 We are similarly of the
view that failure to comply with the requirements of Rule 8(19) of
the 1969 Rules does not vitiate the enquiry unless the delinquent
officer is able to establish prejudice. In this case the learned
Single Judge the High Court as well as the learned Judges of the
Division Bench found that the appellant was in no way
prejudiced by the failure to observe the requirement of Rule 8(19).
The appellant cross-examined the witnesses himself, submitted
his defence in writing in great detail and argued the case himself
at all stages. The appellant was fully alive to the allegations
against him and dealt with all aspects of the allegations in his
written defence. We do not think that he was in the least
prejudiced by the failure of the Enquiry Officer to question him in
accordance with Rule 8(19).

(emphasis supplied)”

A similar view has been taken in the State of Andhra Pradesh v.

Thakkidiram Reddy153 and other decisions.

233. There is a dual obligation, namely, part mandatory and part

directory. In Howard v. Secretary of State for the Environment, (1975)

Q.B. 235, Lord Denning has cited a portion from the speech of Lord

Penzance, which is extracted hereunder:

“Now the distinction between matters that are directory and
matters that are imperative is well known to us all in the common
language of the courts at Westminster … A thing has been
ordered by the legislature to be done. What is the consequence if
it is not done? In the case of statutes that are said to be
imperative, the courts have decided that if it is not done the whole
thing fails, and the proceedings that follow upon it are all void.
On the other hand, when the courts hold a provision to be
mandatory or directory, they say that, although such provision
may not have been complied with, the subsequent proceedings
do not fail.”
Later Lord Denning M.R. said, at pp. 242-243:

“The section is no doubt imperative in that the notice of appeal
must be in writing and must be made within the specified time.
But I think it is only directory as to the contents. Take first the
requirement as to the ‘grounds’ of appeal. The section is either

153
(1998) 6 SCC 554
210

imperative in requiring ‘the grounds’ to be indicated, or it is not.
That must mean all or none. I cannot see any justification for the
view that it is imperative as to one ground and not imperative as
to the rest. If one was all that was necessary, an appellant would
only have to put in one frivolous or hopeless ground and then
amend later to add his real grounds. That would be a futile
exercise. Then as to ‘stating the facts.’ It cannot be supposed
that the appellant must at all cost state all the facts on which he
bases his appeal. He has to state the facts, not the evidence: and
the facts may depend on evidence yet to be obtained, and may
not be fully or sufficiently known at the time when the notice of
appeal is given. All things, considered, it seems to me that the
section, in so far as the ‘grounds’ and ‘facts’ are concerned, must
be construed as directory only: that is, as desiring information to
be given about them. It is not to be supposed that an appeal
should fail altogether simply because the grounds are not
indicated, or the facts stated. Even if it is wanting in not giving
them, it is not fatal. The defects can be remedied later, either
before or at the hearing of the appeal, so long as an opportunity
is afforded of dealing with them.”
(emphasis supplied)

234. In Belvedere Court Management Ltd. v. Frogmore Developments

Ltd.154, a distinction was made between essential and supportive

provisions. The following observations are pertinent:

“By way of final comment I would add that I am strongly
attracted to the view that legislation of the present kind should
be evaluated and construed on an analytical basis. It should be
considered which of the provisions are substantive and which are
secondary, that is, simply part of the machinery of the legislation.
Further, the provisions which fall into the latter category should
be examined to assess whether they are essential parts of the
mechanics or are merely supportive of the other provisions so that
they need not be insisted on regardless of the circumstances. In
other words, as in the construction of contractual and similar
documents, the status and effect of a provision has to be
assessed having regard to the scheme of the legislation as a
whole and the role of that provision in that scheme – for example,
whether some provision confers an option properly so called,
whether some provision is equivalent to a condition precedent,
whether some requirement can be fulfilled in some other way or
waived. Such an approach when applied to legislation such as
the present would assist to enable the substantive rights to be
given effect to and would help to avoid absurdities or unjustified
lacunae.”
(emphasis supplied)

154
(1996) 3 W.L.R. 1008 at p. 1032
211

235. In Sharif-ud-Din (supra) the difference between mandatory and

directory rules was pointed out thus:

“9. The difference between a mandatory rule and a directory rule
is that while the former must be strictly observed, in the case of
the latter substantial compliance may be sufficient to achieve the
object regarding which the rule is enacted. Certain broad
propositions which can be deduced from several decisions of
courts regarding the rules of construction that should be followed
in determining whether a provision of law is directory or
mandatory may be summarised thus: The fact that the statute
uses the word “shall” while laying down a duty is not conclusive
on the question whether it is a mandatory or directory provision.
In order to find out the true character of the legislation, the court
has to ascertain the object which the provision of law in question
has to subserve and its design and the context in which it is
enacted. If the object of a law is to be defeated by non-compliance
with it, it has to be regarded as mandatory. But when a provision
of law relates to the performance of any public duty and the
invalidation of any act done in disregard of that provision causes
serious prejudice to those for whose benefit it is enacted and at
the same time who have no control over the performance of the
duty, such provision should be treated as a directory one. Where,
however, a provision of law prescribes that a certain act has to
be done in a particular manner by a person in order to acquire a
right and it is coupled with another provision which confers an
immunity on another when such act is not done in that manner,
the former has to be regarded as a mandatory one. A procedural
rule ordinarily should not be construed as mandatory if the defect
in the act done in pursuance of it can be cured by permitting
appropriate rectification to be carried out at a subsequent stage
unless by according such permission to rectify the error later on,
another rule would be contravened. Whenever a statute
prescribes that a particular act is to be done in a particular
manner and also lays down that failure to comply with the said
requirement leads to a specific consequence, it would be difficult
to hold that the requirement is not mandatory and the specified
consequence should not follow.”
(emphasis supplied)

236. Similarly, in Ram Deen Maurya (Dr.) v. State of Uttar Pradesh and

Ors155 this Court observed that non-compliance with the directory

provision does not affect the validity of the act done in breach thereof.

155

(2009) 6 SCC 735
212

In Rai Vimal Krishna and Ors. v. State of Bihar & Ors. 156, this Court

considered the mode of publication and held that publication in a

newspaper was the only effective mode and that the provision was

mandatory.

237. This Court also considered the effect of non-deposit of the amount

in Hissar Improvement v. Smt. Rukmani Devi and Anr157 and held that

in case compensation has not been paid or deposited, the State is liable

to pay interest as provided in Section 34. The Court held thus:

“5. It cannot be gainsaid that interest is due and payable to the
landowner in the event of the compensation not being paid or
deposited in time in court. Before taking possession of the land,
the Collector has to pay or deposit the amount awarded, as
stated in Section 31, failing which he is liable to pay interest as
provided in Section 34.

6. In the circumstances, the High Court was right in stating that
interest was due and payable to the landowner. The High Court
was justified in directing the necessary parties to appear in the
executing court for determination of the amount.”

238. In Kishan Das v. State of U.P158 , this Court observed that where

land owners themselves delayed the acquisition proceedings, it is

discretionary for the court to award the interest and they cannot get the

premium on their dilatory tactics. This Court stated that:

“4. In the light of the operation of the respective provisions of
Sections 34 and 28 of the Act, it would be difficult to direct
payment of interest. In fact, Section 23(1-A) is a set-off for loss in
cases of delayed awards to compensate the person entitled to
receive compensation; otherwise a person who is responsible for
the delay in disposal of the acquisition proceedings will be paid
premium for dilatory tactics. It is stated by the learned counsel
for the respondents that the amount of interest was also
calculated and total amount was deposited in the account of the

156 (2003) 6 SCC 401
157
1990 Supp SCC 806
158
(1995) 6 SCC 240
213

appellants by the Land Acquisition Officer after passing the
award, i.e., on 15-11-1976 in a sum of Rs 20,48,615. Under these
circumstances, the liability to pay interest would arise when
possession of the acquired land was taken and the amount was
not deposited. In view of the fact that compensation was
deposited as soon as the award was passed, we do not think
that it is a case for us to interfere at this stage.”
(emphasis supplied)

239. In D-Block Ashok Nagar (Sahibabad) Plot Holders’ Assn. v. State of

U.P.159, it was observed that liability to pay interest under Section 34

arises from the date of taking possession.

240. It was argued that in fact in many cases, reference was sought as

such the amounts being deposited in the treasury were not valid.

Reference was sought for higher compensation and landowners had

declined to accept the compensation for no good reason they could have

received it under protest reserving their right to seek the reference and

in case compensation was not paid or deposited, they could have

claimed it along with interest as envisaged under Section 34.

241. It is clear that once land is acquired, award passed and possession

has been taken, it has vested in the State. It had been allotted to

beneficiaries. A considerable infrastructure could have been developed

and a third-party interest had also intervened. The land would have

been given by the acquiring authorities to the beneficiaries from whose

schemes the land had been acquired and they have developed immense

159
(1997) 10 SCC 77
214

infrastructure. We are unable to accept the submission that merely by

deposit of amount in treasury instead of court, we should invalidate all

the acquisitions, which have taken place. That is not what is

contemplated under Section 24(2). We are also not able to accept the

submission that when law operates these harsh consequences need not

be seen by the court. In our opinion, that submission is without merit

in as such consequences are not even envisaged on proper

interpretation of Section 24(2), as mentioned above.

242. The proviso to Section 24(2) of the Act of 2013, intends that the

Collector would have sufficient funds to deposit it with respect to the

majority of landholdings. In case compensation has not been paid or

deposited with respect to majority of land holdings, all the beneficiaries

are entitled for higher compensation. In case money has not been

deposited with the Land Acquisition Collector or in the treasury or in

court with respect to majority of landholdings, the consequence has to

follow of higher compensation as per proviso to Section 24(2) of the Act

of 2013. Even otherwise, if deposit in treasury is irregular, then the

interest would follow as envisaged under Section 34 of Act of 1894.

Section 24(2) is attracted if acquisition proceeding is not completed

within 5 years after the pronouncement of award. Parliament

considered the period of 5 years as reasonable time to complete the

acquisition proceedings i.e., taking physical possession of the land and

payment of compensation. It is the clear intent of the Act of 2013, that
215

provision of Section 24(2) shall apply to the proceeding which is pending

as on the date on which the Act of 2013, has been brought into force

and it does not apply to the concluded proceedings. It was urged before

us by one of the Counsel that lands in the Raisina Hills and Lutyens’

Zones of Delhi were acquired in 1913 and compensation has not been

paid. The Act of 2013 applies only to the pending proceedings in which

possession has not been taken or compensation has not paid and not

to a case where proceedings have been concluded long back, Section

24(2) is not a tool to revive those proceedings and to question the validity

of taking acquisition proceedings due to which possession in 1960s,

1970s, 1980s were taken, or to question the manner of deposit of

amount in the treasury. The Act of 2013 never intended revival such

claims. In case such landowners were interested in questioning the

proceedings of taking possession or mode of deposit with the treasury,

such a challenge was permissible within the time available with them

to do so. They cannot wake from deep slumber and raise such claims

in order to defeat the acquisition validly made. In our opinion, the law

never contemplates -nor permits- misuse much less gross abuse of its

provisions to reopen all the acquisitions made after 1984, and it is the

duty of the court to examine the details of such claims. There are

several litigations before us where landowners, having lost the challenge

to the validity of acquisition proceedings and after having sought

enhancement of the amount in the reference succeeding in it
216

nevertheless are seeking relief arguing about lapse of acquisition after

several rounds of litigation.

243. The expression used in Section 24(1)(b) is ‘where an award under

Section 11 has been made”, then ‘such proceedings shall continue’ under

the provisions of the said Act of 1894 as if the said Act has not been

repealed’. The expression “proceedings shall continue” indicates that

proceedings are pending at the time; it is a present perfect tense and

envisages that proceedings must be pending as on the date on which

the Act of 2013 came into force. It does not apply to concluded

proceedings before the Collector after which it becomes functus officio.

Section 24 of the Act of 2013, does not confer benefit in the concluded

proceedings, of which legality if question has to be seen in the

appropriate proceedings. It is only in the pending proceedings where

award has been passed and possession has not been taken nor

compensation has been paid, it is applicable. There is no lapse in case

possession has been taken, but amount has not been deposited with

respect to majority of land holdings in a pending proceeding, higher

compensation under the Act of 2013 would follow under the proviso to

Section 24(2). Thus, the provision is not applicable to any other case in

which higher compensation has been sought by way of seeking a

reference under the Act of 1894 or where the validity of the acquisition

proceedings have been questioned, though they have been concluded.
217

Such case has to be decided on their own merits and the provisions of

Section 24(2) are not applicable to such cases.

In re: Issue no.4: mode of taking possession under the Act of 1894

244. Section 16 of the Act of 1894 provided that possession of land may

be taken by the State Government after passing of an award and

thereupon land vest free from all encumbrances in the State

Government. Similar are the provisions made in the case of urgency in

Section 17(1). The word “possession” has been used in the Act of 1894,

whereas in Section 24(2) of Act of 2013, the expression “physical

possession” is used. It is submitted that drawing of panchnama for

taking over the possession is not enough when the actual physical

possession remained with the landowner and Section 24(2) requires

actual physical possession to be taken, not the possession in any other

form. When the State has acquired the land and award has been

passed, land vests in the State Government free from all encumbrances.

The act of vesting of the land in the State is with possession, any person

retaining the possession, thereafter, has to be treated as trespasser and

has no right to possess the land which vests in the State free from all

encumbrances.

245. The question which arises whether there is any difference between

taking possession under the Act of 1894 and the expression “physical

possession” used in Section 24(2). As a matter of fact, what was

contemplated under the Act of 1894, by taking the possession meant
218

only physical possession of the land. Taking over the possession under

the Act of 2013 always amounted to taking over physical possession of

the land. When the State Government acquires land and drawns up a

memorandum of taking possession, that amounts to taking the physical

possession of the land. On the large chunk of property or otherwise

which is acquired, the Government is not supposed to put some other

person or the police force in possession to retain it and start cultivating

it till the land is used by it for the purpose for which it has been

acquired. The Government is not supposed to start residing or to

physically occupy it once possession has been taken by drawing the

inquest proceedings for obtaining possession thereof. Thereafter, if any

further retaining of land or any re-entry is made on the land or someone

starts cultivation on the open land or starts residing in the outhouse,

etc., is deemed to be the trespasser on land which in possession of the

State. The possession of trespasser always inures for the benefit of the

real owner that is the State Government in the case.

246. It was urged on behalf of acquiring authorities and the states that

there is no conflict of opinion with respect to the mode of taking

possession in IDA v Shailendra and Pune Municipal Corporation & Anr

(supra), and that the latter is not a decision as to the aspect of

possession. A two-Judge Bench decision in Shree Balaji Nagar

Residential Association (supra) has been overruled in the Indore

Development Authority case (supra). The view taken in Indore
219

Development Authority (supra) has to prevail as the decision in Velaxan

Kumar (supra), was rendered by a two judge Bench of this court. This

court, however, proceeds to examine the matter afresh as issues have

been framed.

247. The concept of possession is complex one. It comprises the right

to possess and to exclude others, essential is animus possidendi.

Possession depends upon the character of the thing which is possessed.

If the land is not capable of any use, mere non-user of it does not lead

to the inference that the owner is not in possession. The established

principle is that the possession follows title. Possession comprises of the

control over the property. The element of possession is the physical

control or the power over the object and intention or will to exercise the

power. Corpus and animus are both necessary and have to co-exist.

Possession of the acquired land is taken under the Act of 1894 under

Section 16 or 17 as the case may be. The government has a right to

acquire the property for public purpose. The stage under Section 16

comes for taking possession after issuance of notification under Section

4(1) and stage of Section 9(1). Under section 16, vesting is after passing

of the award on taking possession and under section 17 before passing

of the award.

248. Mitra’s “Law of Possession and Ownership of Property”, 2nd Edn.,

expressions ‘trespass’ and ‘trespasser’ have been dealt with by the
220

learned Author with the help of Words and Phrases, Permanent Edition,

West Publishing Co. which has also been quoted with respect to who is

a trespasser:

“A “trespasser” is a person who enters or remains upon land in
the possession of another without a privilege to do so created by
the possessor’s consent or otherwise. In re Wimmer’s Estate, 182
P.2d 119, 121, 111 Utah 444.”

“A “trespasser” is one entering or remaining on land in another’s
possession without a privilege to do so created by possessor’s
consent, express or implied, or by law. Keesecker v. G.M.
Mckelvey Co., 42 N.E. 2d 223, 226, 227, 68 Ohio App. 505.”

249. One who enters or remains in possession on land of another

without a privilege to do so, is also treated as a trespasser. On the

strength of Full Bench decision of Patna High Court in S.M. Yaqub v.

T.N. Basu160, Mitra, has referred to the observation that the possession

should not be confused with occupation. A person may be in actual

possession of the property without occupying it for a considerable time.

The person who has a right to utilise the whole in any way he likes.

Possession in part is good enough to infer that the person is in

possession of the rest. Learned Author has referred to Jowitt’s

Dictionary of English Law, Ed. 1969, so as to explain what constitutes

possession.

“There are three requisites of possession. First, there must be
actual or potential physical control. Secondly, the physical control
is not possession unless accompanied by intention hence if a
thing is put into the hand of a sleeping person he has no
possession of it. Thirdly, the possibility and intention must be
visible or evidence by external signs for if the thing shows no
signs of being under the control of anyone, it is not possession.”

160
AIR 1949 Pat 146
221

250. In order to constitute possession, a person should be in physical

control. The same is not possession unless and until the intention is

there and thirdly, possibility and intention must be visible; otherwise,

it is not possession. Mitra has further dealt with how to determine

possession. The relevant extract is quoted hereunder:

“36. Who is in possession – Determination of.—In Jones
v. Chopman, (1849) 2 Ex. 803: 18 LJ Ex. 456: 76 PR 794; Maule,
J, expounded the doctrine thus:

“If there are two persons in a field, each asserting that the field
is his, and each doing some act in the assertion of the right of
possession, and if the question is, which of these two is in actual
possession, I answer, the person who has the title is in actual
possession and the other person is a trespasser.

In such a case who is in possession is to be determined by the
fact of the title and having the same apparent actual possession;

The question as to which of the two really is in possession is
determined by the fact of the possession; following the title, that
is by the law, which makes it follow the title.”

In Kynoch Limited v. Rowlands, (1912) 1Ch 527; LJ Ch 340; 106
LT 316; per Joyce, J, where his Lordship says:

“It is a well settled principle with reference to land at all events
…… that where possession in fact is underterminate or the
evidence is undecisive, possession, in law follows the right to
possess. As far back as the time of Littleton it was said, “Where
two be in one house or other tenements together to claim the said
lands and tenements, and the one claimeth by one title, and the
other by another title, the law shall adjudge him in possession
that has right to have the possession of the same tenements.”
(emphasis supplied)

251. A person with title is considered to be in actual possession. The

other person is a trespasser. The possession in law follows the right to

possess as held in Kynoch Limited v. Rowlands161. Ordinarily, the owner

161
(1912) 1Ch 527
222

of the property is presumed to be in possession and presumption as to

possession is in his favour. In Superintendent and Remembrancer of

Legal Affairs, West Bengal v. Anil Kumar Bhunja & Ors., 162, this Court

observed that possession implies a right and a fact; the right to enjoy

annexed to the right of property and the fact of the real intention. It

involves the power of control and intent to control. Possession is

annexed to right of property.

“13. “Possession” is a polymorphous term which may have
different meanings in different contexts. It is impossible to work
out a completely logical and precise definition of “possession”
uniformally applicable to all situations in the contexts of all
statutes. Dias and Hughes in their book on Jurisprudence say
that if a topic ever suffered from too much theorising it is that of
“possession.” Much of this difficulty and confusion is (as pointed
out in Salmond’s Jurisprudence, 12th Edn., 1966) caused by the
fact that possession is not purely a legal concept. “Possession,”
implies a right and a fact; the right to enjoy annexed to the right
of property and the fact of the real intention. It involves power of
control and intent to control. (See Dias and Hughes, ibid.)

14. According to Pollock and Wright,
“when a person is in such a relation to a thing that, so far as
regards the thing, he can assume, exercise or resume manual
control of it at pleasure, and so far as regards other persons, the
thing is under the protection of his personal presence, or in or on
a house or land occupied by him or in any receptacle belonging to
him and under his control, he is in physical possession of the
thing.”

15. While recognising that “possession” is not a purely legal
concept but also a matter of fact, Salmond (12th Edn., p. 52)
describes “possession, in fact”, as a relationship between a
person and a thing. According to the learned Author the test for
determining “whether a person is in possession of anything is
whether he is in general control of it”.

252. In Ram Dass v. Davinder163, this Court stated that possession and

occupation in common parlance may be used interchangeably, but in

162
(1979) 4 SCC 274
163 (2004) 3 SCC 684
223

law possession amounts to holding property as an owner, while to

occupy is to keep possession by being present in it. In Bhinka & Ors. v.

Charan Singh, Bhinka & Ors. v. Charan Singh 164, this court considered

the dichotomy between taking and retaining possession. They are

mutually exclusive expressions and apply to two different situations.

The word ‘taking’ applies to a person taking possession of a land

otherwise than in accordance with the provisions of the law, while the

word ‘retaining’ applies to a person taking possession in accordance

with the provisions of the law, but subsequently retaining the same

illegally. In Bhinka & Ors. (supra), as to retaining possession, it was

observed:

“14. If the appellants did not take possession of the disputed
lands, did they retain possession of the same in accordance with
the provisions of the law for the time being in force? The
dichotomy between taking and retaining indicates that they are
mutually exclusive and apply to two different situations. The
word “taking” applies to a person taking possession of a land
otherwise than in accordance with the provisions of the law,
while the word “retaining” to a person taking possession in
accordance with the provisions of the law but subsequently
retaining the same illegally. So construed, the appellants’
possession of the lands being illegal from the inception, they
could not be described as persons retaining possession of the
said lands in accordance with the provisions of any law for the
time being in force, so as to be outside the scope of Section 180
of the Act.”

253. Under section 16 of the Act of 1894, vesting of title in the

Government, in the land took place immediately upon taking

possession. Under Sections 16 and 17 of the Act of 1894, the acquired

land became the property of the State without any condition or

164
1959 (Suppl 2) SCR 798
224

limitation either as to title or possession. Absolute title thus vested in

the State.

254. This Court in V. Chandrasekaran & Anr. v. Administrative Officer

& Ors165 dealt with the concept of vesting under the Act of 1894. The

facts of the said case indicated that the appellants and the officials of

the State and Development Board connived with each other to enable

the appellant to grab/encroach upon the public land, which was

acquired and falsified the documents so as to construct flats thereon.

Considering the gravamen of the fraud, the Chief Secretary of the State

was directed to trace out such officials and to take suitable action

against each of them. It was also held by this Court that alienation of

land subsequent to notification under Section 4(1) is void and no title

passes on the basis of such sale deed. This Court held that once land

vested in the State free from all encumbrances, it cannot be divested.

Once land has been acquired, it cannot be restored to tenure-

holders/persons interested, even if it is not used for the purpose for

which it is so acquired. Once possession of land has been taken, it vests

in the State free from all encumbrances. Under sections 16 and 17, the

acquired property becomes the property of the Government without any

limitation or condition either as to title or possession. Reliance has been

placed on Fruit and Vegetable Merchants Union (supra):

“19. That the word “vest” is a word of variable import is shown
by provisions of Indian statutes also. For example, Section 56 of

165 (2012) 12 SCC 133
225

the Provincial Insolvency Act (5 of 1920) empowers the court at
the time of the making of the order of adjudication or thereafter to
appoint a receiver for the property of the insolvent and further
provides that “such property shall thereupon vest in such
receiver”. The property vests in the receiver for the purpose of
administering the estate of the insolvent for the payment of his
debts after realising his assets. The property of the insolvent
vests in the receiver not for all purposes but only for the purpose
of the Insolvency Act and the receiver has no interest of his own
in the property. On the other hand, Sections 16 and 17 of the
Land Acquisition Act (Act 1 of LA), provide that the property so
acquired, upon the happening of certain events, shall “vest
absolutely in the Government free from all encumbrances”. In the
cases contemplated by Sections 16 and 17 the property acquired
becomes the property of Government without any conditions or
limitations either as to title or possession. The legislature has
made it clear that the vesting of the property is not for any limited
purpose or limited duration. It would thus appear that the word
“vest” has not got a fixed connotation, meaning in all cases that
the property is owned by the person or the authority in whom it
vests. It may vest in title, or it may vest in possession, or it may
vest in a limited sense, as indicated in the context in which it may
have been used in a particular piece of legislation. The provisions
of the Improvement Act, particularly Sections 45 to 49 and 54 and
54-A when they speak of a certain building or street or square or
other land vesting in a municipality or other local body or in a
trust, do not necessarily mean that ownership has passed to any
of them.”
(emphasis supplied)

255. In National Textile Corporation Ltd. v. Nareshkumar Badrikumar

Jagad & Ors166, the concept of vesting was considered. This court

observed that vesting means an absolute and indefeasible right.

Vesting, in general sense, means vesting in possession. Vesting may

include vesting of interest too. This Court observed thus:

“38. “Vesting” means having obtained an absolute and
indefeasible right. It refers to and is used for transfer or
conveyance. “Vesting” in the general sense, means vesting in
possession. However, “vesting” does not necessarily and always
means possession but includes vesting of interest as well.
“Vesting” may mean vesting in title, vesting in possession or
vesting in a limited sense, as indicated in the context in which it
is used in a particular provision of the Act. The word “vest” has
different shades, taking colour from the context in which it is
used. It does not necessarily mean absolute vesting in every
situation and is capable of bearing the meaning of a limited
vesting, being limited, in title as well as duration. Thus, the word

166
2011 (12) SCC 695
226

“vest” clothes varied colours from the context and situation in
which the word came to be used in the statute. The expression
“vest” is a word of ambiguous import since it has no fixed
connotation and the same has to be understood in a different
context under different sets of circumstances. [Vide Fruit &
Vegetable Merchants Union v. Delhi Improvement Trust
, AIR 1957
SC 344, Maharaj Singh v. State of U.P. AIR 1976 SC 2602,
Municipal Corpn. of Hyderabad v. P.N. Murthy AIR 1987 SC 802,
Vatticherukuru Village Panchayat v. Nori Venkatarama
Deekshithulu
1991 Supp (2) SCC 228, M. Ismail Faruqui v. Union
of India
AIR 1995 SC 605, SCC p. 404, para 41, Govt. of A.P. v.
Nizam
, Hyderabad (1996) 3 SCC 282, K.V. Shivakumar v.
Appropriate Authority
(2000) 3 SCC 485, Municipal Corpn. of
Greater Bombay v. Hindustan Petroleum Corpn
. AIR 2001 SC
3630 and Sulochana Chandrakant Galande v. Pune Municipal
Transport
(2010) 8 SCC 467.]”
(emphasis supplied)

256. Thus, it is apparent that vesting is with possession and the statute

has provided under Sections 16 and 17 of the Act of 1894 that once

possession is taken, absolute vesting occurred. It is an indefeasible right

and vesting is with possession thereafter. The vesting specified under

section 16, takes place after various steps, such as, notification under

section 4, declaration under section 6, notice under section 9, award

under section 11 and then possession. The statutory provision of

vesting of property absolutely free from all encumbrances has to be

accorded full effect. Not only the possession vests in the State but all

other encumbrances are also removed forthwith. The title of the

landholder ceases and the state becomes the absolute owner and in

possession of the property. Thereafter there is no control of the land-

owner over the property. He cannot have any animus to take the

property and to control it. Even if he has retained the possession or

otherwise trespassed upon it after possession has been taken by the
227

State, he is a trespasser and such possession of trespasser enures for

his benefit and on behalf of the owner.

257. After the land has vested in the State, the total control is of the

State. Only the State has a right to deal with the same. In Municipal

Corporation of Greater Bombay & Ors. v. Hindustan Petroleum

Corporation & Anr167, this Court discussed the concept of vesting in the

context of Section 220 of the Bombay Municipal Corporation Act. It has

referred to various decisions including that of Richardson v. Robertson,

(1862) 6 LT 75 thus:

“8. It is no doubt true that Section 220 provides that any drain
which vests in the Corporation is a municipal drain and shall be
under the control of the Corporation. In this context, the question
arises as to what meaning is required to assign to the word “vest”
occurring in Section 220 of the Act? In Richardson v. Robertson 6
LT at p. 78, it was observed by Lord Cranworth as under: (LT p.

78)
“The word ‘vest’ is a word, at least, of ambiguous import.
Prima facie ‘vesting’ in possession is the more natural
meaning. The expressions ‘investiture’ — ‘clothing’ — and
whatever else be the explanation as to the origin of the
word, point prima facie rather to the enjoyment than to the
obtaining of a right. But I am willing to accede to the
argument that was pressed at the Bar, that by long usage
‘vesting’ originally means the having obtained an absolute
and indefeasible right, as contradistinguished from the not
having so obtained it. But it cannot be disputed that the
word ‘vesting’ may mean, and often does mean, that which
is its primary etymological signification, namely, vesting in
possession.”

15. We are, therefore, of the view that the word “vest” means
vesting in title, vesting in possession or vesting in a limited sense,
as indicated in the context in which it is used in a particular
provision of the Act.”
(emphasis supplied)

167
2001 (8) SCC 143
228

258. The word ‘vest’ has to be construed in the context in which it is

used in a particular provision of the Act. Vesting is absolute and free

from all encumbrances that includes possession. Once there is vesting

of land, once possession has been taken, section 24(2) does not

contemplate divesting of the property from the State as mentioned

above.

259. Now, the court would examine the mode of taking possession

under the Act of 1894 as laid down by this Court. In Balwant Narayan

Bhagde (supra) it was observed that the act of Tehsildar in going on the

spot and inspecting the land was sufficient to constitute taking of

possession. Thereafter, it would not be open to the Government or the

Commission to withdraw from the acquisition under Section 48(1) of the

Act. It was held thus:

“28. We agree with the conclusion reached by our brother
Untwalia, J., as also with the reasoning on which the conclusion
is based. But we are writing a separate judgment as we feel that
the discussion in the judgment of our learned Brother Untwalia,
J., in regard to delivery of “symbolical” and “actual” possession
under Rules 35, 36, 95 and 96 of Order 21of the Code of Civil
Procedure, is not necessary for the disposal of the present
appeals and we do not wish to subscribe to what has been said
by our learned Brother Untwalia, J., in that connection, nor do we
wish to express our assent with the discussion of the various
authorities made by him in his judgment. We think it is enough to
state that when the Government proceeds to take possession of
the land acquired by it under the Land Acquisition Act, LA, it must
take actual possession of the land since all interests in the land
are sought to be acquired by it. There can be no question of taking
“symbolical” possession in the sense understood by judicial
decisions under the Code of Civil Procedure. Nor would
possession merely on paper be enough. What the Act
contemplates as a necessary condition of vesting of the land in
the Government is the taking of actual possession of the land.
How such possession may be taken would depend on the nature
of the land. Such possession would have to be taken as the
nature of the land admits of. There can be no hard and fast rule
laying down what act would be sufficient to constitute taking of
229

possession of land. We should not, therefore, be taken as laying
down an absolute and inviolable rule that merely going on the
spot and making a declaration by beat of drum or otherwise
would be sufficient to constitute taking of possession of land in
every case. But here, in our opinion, since the land was lying
fallow and there was no crop on it at the material time, the act of
the Tehsildar in going on the spot and inspecting the land for the
purpose of determining what part was waste and arable and
should, therefore, be taken possession of and determining its
extent, was sufficient to constitute taking of possession. It
appears that the appellant was not present when this was done
by the Tehsildar, but the presence of the owner or the occupant
of the land is not necessary to effectuate the taking of possession.
It is also not strictly necessary as a matter of legal requirement
that notice should be given to the owner or the occupant of the
land that possession would be taken at a particular time, though
it may be desirable where possible, to give such notice before
possession is taken by the authorities, as that would eliminate
the possibility of any fraudulent or collusive transaction of taking
of mere paper possession, without the occupant or the owner ever
coming to know of it.”

260. In Tamil Nadu Housing Board v. A. Viswam (supra) it was held that

drawing of Panchnama in the presence of witnesses would constitute a

mode of taking possession. This court observed:

“9. It is settled law by series of judgments of this Court that one
of the accepted modes of taking possession of the acquired land
is recording of a memorandum or Panchnama by the LAO in the
presence of witnesses signed by him/them and that would
constitute taking possession of the land as it would be
impossible to take physical possession of the acquired land. It
is common knowledge that in some cases the owner/interested
person may not cooperate in taking possession of the land.”
(emphasis supplied)

261. In Banda Development Authority (supra) this Court held that

preparing a Panchnama is sufficient to take possession. This Court has

laid down thus:

“37. The principles which can be culled out from the above noted
judgments are:

(i) No hard-and-fast rule can be laid down as to what act would
constitute taking of possession of the acquired land.

(ii) If the acquired land is vacant, the act of the State authority
concerned to go to the spot and prepare a panchnama will
230

ordinarily be treated as sufficient to constitute taking of
possession.

(iii) If crop is standing on the acquired land or building/structure
exists, mere going on the spot by the authority concerned will, by
itself, be not sufficient for taking possession. Ordinarily, in such
cases, the authority concerned will have to give notice to the
occupier of the building/structure or the person who has
cultivated the land and take possession in the presence of
independent witnesses and get their signatures on the
panchnama. Of course, refusal of the owner of the land or
building/structure may not lead to an inference that the
possession of the acquired land has not been taken.

(iv) If the acquisition is of a large tract of land, it may not be
possible for the acquiring/designated authority to take physical
possession of each and every parcel of the land and it will be
sufficient that symbolic possession is taken by preparing
appropriate document in the presence of independent witnesses
and getting their signatures on such document.

(v) If beneficiary of the acquisition is an agency/instrumentality
of the State and 80% of the total compensation is deposited in
terms of Section 17(3-A) and substantial portion of the acquired
land has been utilised in furtherance of the particular public
purpose, then the court may reasonably presume that possession
of the acquired land has been taken.”

262. In State of Tamil Nadu and Anr. v. Mahalakshmi Ammal and Ors.,

(supra), this court dealt with the effect of vesting on possession and

mode of taking it and opined thus:

“9. It is well-settled law that publication of the declaration under
Section 6 gives conclusiveness to public purpose. Award was
made on 26-9-1986 and for Survey No. 2/11 award was made
on 31-8-1990. Possession having already been undertaken on
24-11-1981, it stands vested in the State under Section 16 of the
Act free from all encumbrances and thereby the Government
acquired absolute title to the land. The initial award having been
made within two years under Section 11 of the Act, the fact that
subsequent award was made on 31-8-1990 does not render the
initial award invalid. It is also to be seen that there is stay of
dispossession. Once there is stay of dispossession, all further
proceedings necessarily could not be proceeded with as laid
down by this Court. Therefore, the limitation also does not stand
as an impediment as provided in the proviso to Section 11-A of
the Act. Equally, even if there is an irregularity in service of notice
under Sections 9 and 10, it would be a curable irregularity and
on account thereof, award made under Section 11 does not
become invalid. Award is only an offer on behalf of the State. If
compensation was accepted without protest, it binds such party
but subject to Section 28-A. Possession of the acquired land
would be taken only by way of a memorandum, Panchnama,
which is a legally accepted norm. It would not be possible to take
231

any physical possession. Therefore, subsequent continuation, if
any, had by the erstwhile owner is only illegal or unlawful
possession which does not bind the Government nor vested under
Section 16 divested in the illegal occupant. Considered from this
perspective, we hold that the High Court was not justified in
interfering with the award.”

263. In Balmokand Khatri Educational and Industrial Trust, Amritsar v.

State of Punjab & Ors168, this Court ruled that under compulsory

acquisition it is difficult to take physical possession of land. The normal

mode of taking possession is by way of drafting the Panchnama in the

presence of Panchas. This Court observed thus:

“4. It is seen that the entire gamut of the acquisition proceedings
stood completed by 17-4-1976 by which date possession of the
land had been taken. No doubt, Shri Parekh has contended that
the appellant still retained their possession. It is now well-settled
legal position that it is difficult to take physical possession of the
land under compulsory acquisition. The normal mode of taking
possession is drafting the panchnama in the presence of panchas
and taking possession and giving delivery to the beneficiaries is
the accepted mode of taking possession of the land. Subsequent
thereto, the retention of possession would tantamount only to
illegal or unlawful possession.

5. Under these circumstances, merely because the appellant
retained possession of the acquired land, the acquisition cannot
be said to be bad in law. It is then contended by Shri Parekh that
the appellant-Institution is running an educational institution and
intends to establish a public school and that since other land was
available, the Government would have acquired some other land
leaving the acquired land for the appellant. In the counter-
affidavit filed in the High Court, it was stated that apart from the
acquired land, the appellant also owned 482 canals 19 marlas of
land. Thereby, it is seen that the appellant is not disabled to
proceed with the continuation of the educational institution which
it seeks to establish. It is then contended that an opportunity may
be given to the appellant to make a representation to the State
Government. We find that it is not necessary for us to give any
such liberty since acquisition process has already been
completed.”

168
(1996) 4 SCC 212
232

264. In P.K. Kalburqi v. State of Karnataka and Ors., 169, with respect of

mode of possession, this Court laid down as under:

“6. Moreover, the Hon’ble Minister who passed the order of
denotification of the lands in question sought to make a
distinction between symbolic possession and actual possession
and proceed to pass the order on the basis of his understanding
of the law that symbolic possession did not amount to actual
possession, and that the power to withdraw from the acquisition
could be exercised at any time before “actual possession” was
taken. This view appears to be contrary to the majority decision
of this Court in Balwant Narayan Bhagde v. M.D. Bhagwat,
wherein this Court observed that how such possession would be
taken would depend on the nature of the land. Such possession
would have to be taken as the nature of the land admits of. There
can be no hard-and-fast rule laying down what act would be
sufficient to constitute taking of possession of land. In the instant
case the lands of which possession was sought to be taken were
unoccupied, in the sense that there was no crop or structure
standing thereon. In such a case only symbolic possession could
be taken, and as was pointed out by this Court in the aforesaid
decision, such possession would amount to vesting the land in
the Government. Moreover, four acres and odd belonging to the
appellant was a part of the larger area of 118 acres notified for
acquisition. We are, therefore, satisfied that the High Court has
not committed any error in holding that possession of the land
was taken on 6-11-1985. Even the order of the Minister on which
considerable reliance has been placed by the appellant indicates
that possession of the lands was taken, though symbolic.”

265. In Sita Ram Bhandar Society, New Delhi (supra) this Court held

that when possession of large area of land is to be taken, then it is

permissible to take possession by drawing Panchnama. A similar view

was expressed in Om Prakash Verma & Ors (supra) which stated that:

“85. As pointed out earlier, the expression “civil appeals are
allowed” carry only one meaning i.e. the judgment of the High
Court is set aside and the writ petitions are dismissed. Moreover,
the determination of surplus land based on the declaration of
owners has become final long back. The notifications issued
under Section 10 of the Act and the panchnama taking
possession are also final. On behalf of the State, it was asserted
that the possession of surplus land was taken on 20-7-1993 and
the panchnama was executed showing that the possession has
been taken. It is signed by the witnesses. We have perused the
details which are available in the paper book. It is settled law
that where possession is to be taken of a large tract of land

169
(2005) 12 SCC 489
233

then it is permissible to take possession by a properly executed
panchnama. [Vide Sita Ram Bhandar Society v. Govt. (NCT of
Delhi
) (2009) 10 SCC 501.]

86. It is not in dispute that the panchnama has not been
questioned in any proceedings by any of the appellants. Though
it is stated that Chanakyapuri Cooperative Society was in
possession at one stage and Shri Venkateshawar Enterprises
was given possession by the owners and possession was also
given to Golden Hill Construction Corporation and thereafter it
was given to the purchasers, the fact remains that the owners are
not in possession. In view of the same, the finding of the High
Court that the possession was taken by the State legally and
validly through a panchnama is absolutely correct and deserves
to be upheld.”

266. In M. Venkatesh and Ors. v. Commissioner, Bangalore Development

Authority, etc.170, a three-Judge Bench of this Court has opined that one

of the modes of taking possession is by drawing panchnama. The Court

observed:

“17. To the same effect are the decisions of this Court in Ajay
Krishan Shinghal v. Union of India
(1996) 10 SCC 721, Mahavir
v. Rural Institute
(1995) 5 SCC 335, Gian Chand v. Gopala (1995)
2 SCC 528, Meera Sahni v. Lt. Governor of Delhi (2008) 9 SCC
177 and Tika Ram v. State of U.P. (2009) 10 SCC 689 More
importantly, as on the date of the suit, the respondents had not
completed 12 years in possession of the suit property so as to
entitle them to claim adverse possession against BDA, the true
owner. The argument that possession of the land was never
taken also needs notice only to be rejected for it is settled that
one of the modes of taking possession is by drawing a
panchnama which part has been done to perfection according to
the evidence led by the defendant BDA. Decisions of this Court in
T.N. Housing Board v. A. Viswam (1996) 8 SCC 259 and Larsen
& Toubro Ltd. v. State of Gujarat
(1998) 4 SCC 387, sufficiently
support BDA that the mode of taking possession adopted by it
was a permissible mode.”

267. In Ram Singh v. Jammu Development Authority 171, this Court

stated that the mode of taking possession is by drawing a Panchnama.

Concerning the mode of taking possession in any other land, law to a

170 (2015) 17 SCC 1
171
2017 (13) SCC 474
234

similar effect has been laid down in NAL Layout Residents Association

v. Bangalore Development Authority172. Certain decisions were cited with

respect to other statutes regarding coalfields etc. and how the

possession is taken and vesting is to what extent. Those have to be seen

in the context of the particular Act. Possession comprises of various

rights, thus it has to be couched in a particular statute for which we

have a plethora of decisions of this Court. Hence, we need not fall back

on the decisions in other cases. The decision in Burrakur Coal Co. Ltd.

(supra) held that a person can be said to be in possession of minerals

contained in a well-defined mining area even though his actual physical

possession is confined to a small portion. Possession in part extends to

the whole of the area. The decision does not help the cause of the

petitioner. Once possession has been taken by drawing a Panchnama,

the State is deemed to be in possession of the entire area and not for a

part. There is absolute vesting in Government with possession and

control free from all encumbrances as specifically provided in Section

16 of the Act of 1894.

268. Maguni Charan Dwivedi v. State of Orissa173 , dealt with the

provision of land laws requiring actual cultivating possession with

which we are not concerned here. Sri Tarkeshwar Sio Thakur Jiu v. Dar

Dass Dey & Co.174, it was again a case relating to mining. The decision

172 (2018) 12 SCC 400
173
1976 (2) SCC 134
174 1979 (3) SCC 106
235

is of no avail. The decision in Ramesh Bejoy Sharma v. Pashupati Rai175

related to khas possession and physical possession of the tenant with

which we are not concerned in the instant case, and the decision has

no relevance so as to determine the expression. In the instant case, we

are not dealing with the question, what are the rights to be conferred

on the actual cultivators under revenue laws?

269. Karanpura Development Co. v. Union of India176, was again a case

of mines. In Larsen & Toubro Ltd. v. State of Gujarat177, this Court relied

upon Tamil Nadu Housing Board v. A. Viswam, (supra), Balmokand

Khatri Educational & Industrial Trust (supra) and held that drawing of

Panchnama is sufficient to take possession and acquisition was held to

be valid.

270. The decision in Velaxan Kumar (supra) cannot be said to be laying

down the law correctly. The Court considered the photographs also to

hold that the possession was not taken. Photographs cannot evidence

as to whether possession was taken or not. Drawing of a Panchnama is

an accepted mode of taking possession. Even after re-entry, a

photograph can be taken; equally, it taken be taken after committing

trespass. Such documents cannot prevail over the established mode of

proving whether possession is taken, of lands. Photographs can be of

little use, much less can they be a proof of possession. A person may

175 (1979) 4 SCC 27
176 (1988) Supp. SCC 488
177
(1998) 4 SCC 387
236

re-enter for a short period or only to have photograph. That would not

impinge adversely on the proceedings of taking possession by drawing

Panchnama, which has been a rarely recognised and settled mode of

taking possession.

271. In the decision in Raghbir Singh Sehrawat v. State of Haryana178,

the observation made was that it is not possible to take the possession

of entire land in a day on which the award was declared, cannot be

accepted as laying down the law correctly and same is contrary to a

large number of precedents. The decision in Narmada Bachao Andolan

v. State of M.P179, is confined to particular facts of the case. The

Commissioner was appointed to find out possession on the spot. DVDs.

and CDs were seen to hold that the landowners were in possession. The

District Judge, Indore, recorded the statements of the tenure-holder.

We do not approve the method of determining the possession by

appointment of Commissioner or by DVDs and CDs as an acceptable

mode of proving taking of possession. The drawing of Panchnama

contemporaneously is sufficient and it is not open to a court

Commissioner to determine the factum of possession within the purview

of Order XXVII, Rule 9 CPC. Whether possession has been taken, or not,

is not a matter that a court appointed Commissioner cannot opine.

However, drawing of Panchnama by itself is enough and is a proof of the

fact that possession has been taken.

178

(2012) 1 SCC 792
179
(2011) 7 SCC 639
237

272. It was submitted on behalf of landowners that under Section 24

the expression used is not possession but physical possession. In our

opinion, under the Act of 1894 when possession is taken after award is

passed under section 16 or under section 17 before the passing of the

award, land absolutely vests in the State on drawing of Panchnama of

taking possession, which is the mode of taking possession. Thereafter,

any re-entry in possession or retaining the possession is wholly illegal

and trespasser’s possession inures for the benefit of the owner and even

in the case of open land, possession is deemed to be that of the owner.

When the land is vacant and is lying open, it is presumed to be that of

the owner by this Court as held in Kashi Bai v. Sudha Rani Ghose180.

Mere re-entry on Government land once it is acquired and vests

absolutely in the State (under the Act of 1894) does not confer, any right

to it and Section 24(2) does not have the effect of divesting the land once

it vests in the State.

273. In Maria Margadia Sequeria v Erasmo Jack De Sequeria 181,

approving a decision of this Court, this court clarified what amounts to

“possession” in law and held:

“Possession is flexible term and is not necessarily restricted to
mere actual possession of the property. The legal conception of
possession may be in various forms. The two elements of
possession are the corpus and the animus. A person though in
physical possession may not be in possession in the eye of law,
if the animus be lacking. On the contrary, to be in possession, it
is not necessary that one must be in actual physical contact. To
gain the complete idea of possession, one must consider

180 AIR 1958 SC 434
181
2012 (5) SCC 370
238

(i) the person possessing, (ii) the things possessed and, (iii) the
persons excluded from possession. A man may hold an object
without claiming any interest therein for himself. A servant
though holding an object, holds it for his master. He has,
therefore, merely custody of the thing and not the possession
which would always be with the master though the master may
not be in actual contact of the thing. It is in this light in which the
concept of possession has to be understood in the context of a
servant and master.”

************** ***** **************

Principles of law which emerge in Maria Margadia Sequeria (supra)

are crystallized as under:-

“1. No one acquires title to the property if he or she was allowed
to stay in the premises gratuitously. Even by long possession of
years or decades such person would not acquire any right or
interest in the said property.”

274. In the decision reported as National Thermal Power Ltd v Mahesh

Dutta182 this court held that:

“28. When possession is to be taken over in respect of the fallow
or Patit land, a mere intention to do so may not be enough. It is,
however, the positive stand by the appellant that the lands in
question are agricultural land and crops used to be grown
therein. If the lands in question are agricultural lands, not only
actual physical possession had to be taken but also they were
required to be properly demarcated. If the land had standing
crops, as has been contended by Mr. Raju Ramachandran, steps
in relation thereto were required to be taken by the Collector. Even
in the said certificate of possession, it had not been stated that
there were standing crops on the land on the date on which
possession was taken. We may notice that delivery of possession
in respect of immoveable property should be taken in the manner
laid down in Order XXI Rule 35 of the Code of Civil Procedure.

29. It is beyond any comprehension that when possession is
purported to have been taken of the entire acquired lands, actual
possession would be taken only of a portion thereof. The
certificate of possession was either correct or incorrect. It cannot
be partially correct or partially incorrect. Either the possession
had actually been delivered or had not been delivered. It cannot
be accepted that possession had been delivered in respect of
about 10 acres of land and the possession could not be taken in
respect of the rest 55 acres of land. When the provisions of
Section 17 are taken recourse to, vesting of the land takes effect
immediately.

30. Another striking feature of the case is that all the actions had
been taken in a comprehensive manner. The Collector in his

182
2009 (8) SCC 339
239

certificate of possession dated 16th November, 1984 stated that
the possession had been taken over in respect of the entire land;
the details of the land and the area thereof had also been
mentioned in the certificate of possession; even NTPC in its letter
dated 24th February, 1986 stated that possession had not been
delivered only in respect of land situated in four villages
mentioned therein. Indisputably NTPC got possession over
10.215 acres of land. It raised constructions thereover. It is
difficult to comprehend that if the NTPC had paid 80% of the total
compensation as provided for under sub-section (3A) of Section
17
of the Act, out of 65.713 acres of land it had obtained
possession only in respect of about 10.215 acres of land and still
for such a long time it kept mum. Ex-facie, therefore, it is difficult
to accept that merely symbolic possession had been taken.”

275. In V. Chandrasekaran & Anr. v. Administrative Officer & Ors.183,

the land was acquired and possession was handed over to the

authorities. Later on the land was sold, documents were manipulated,

and flats were constructed in an illegal manner. It was held that the

land once acquired, cannot be restored. The State has no right to

reconvey the land and no person can claim such a right nor derive an

advantage. Sale of land after a notification under section 4 of the LA Act

was held to be void. It was held in the facts of the case that the judicial

process cannot be used to subvert its way. Such persons must not be

permitted to profit from the frivolous litigation, and they must be

prevented from taking false pleas by relying on forged documents or

illegal action.

276. We have seen the blatant misuse of the provisions of section 24(2).

Acquisitions that were completed several decades before even to say 50-

183 (2012) 12 SCC 133
240

60 years ago, or even as far back as 90 years ago were questioned; cases

filed were dismissed. References were sought claiming higher

compensation and higher compensation had been ordered. Now, there

is a fresh bout of litigation started by erstwhile owners even after having

received the compensation in many cases by submitting that possession

has not been taken and taking of possession by drawing a Panchnama

was illegal and they are in physical possession. As such, there is lapse

of proceedings.

277. The court is alive to the fact that are a large number of cases

where, after acquisition land has been handed over to various

corporations, local authorities, acquiring bodies, etc. After depositing

compensation (for the acquisition) those bodies and authorities have

been handed possession of lands. They, in turn, after development of

such acquired lands have handed over properties; third party interests

have intervened and now declaration is sought under the cover of

section 24(2) to invalidate all such actions. As held by us, section 24

does not intend to cover such cases at all and such gross misuse of the

provisions of law must stop. Title once vested, cannot be obliterated,

without an express legal provision; in any case, even if the landowners’

argument that after possession too, in case of non-payment of

compensation, the acquisition would lapse, were for arguments’ sake,

be accepted, these third party owners would be deprived of their lands,

lawfully acquired by them, without compensation of any sort. Thus, we
241

have no hesitation to overrule the decisions in Velaxan Kumar (supra)

and Narmada Bachao Andolan (supra), with regard to mode of taking

possession. We hold that drawing of Panchnama of taking possession is

the mode of taking possession in land acquisition cases, thereupon land

vests in the State and any re-entry or retaining the possession thereafter

is unlawful and does not inure for conferring benefits under section

24(2) of the Act of 2013.

In Re Question No.5: the effect of interim order of Court

278. On behalf of acquiring authorities, it was submitted that period

spent during the interim stay or injunction by which Authorities have

not been able to take possession or to make payment, has to be

excluded from computing the period of 5 years or more as provided in

Section 24(2). It was submitted that in case authorities are restrained

by interim order passed by the court in a pending litigation, the land

acquisition cannot lapse by including the period for which interim stay

order preventing the Authorities from taking action has operated.

Reliance has been placed on the principles contained in maxim “actus

curiae neminem gravabit”. It was also submitted even in the absence of

the provisions specifically excluding the period of interim

stay/injunction having been made in Section 24(2) of the Act, 2013, the

aforesaid principles are attracted and the period has to be excluded.

279. The landowners, on the other hand argued that there is no valid

reason to exclude the period spent during the interim order by the court
242

from the prescribed period of 5 years under Section 24(2) of the Act of

2013. For the main reason that the legislature has not specially

provided for exclusion of such period in Section 24 and secondly, where

Parliament has desired to exclude the period of interim order has made

provision for exclusion of such period in proviso to Section 19 and

explanation to Section 69 of the Act of 2013. In the Act of 1894, there

was a similar provision made in Section 6 and explanation to Section

11A. During the process of consultation of the stakeholders while

enacting the Act of 2013, the Government of NCT of Delhi had suggested

that an explanation be added in the provisions of Section 24 to exclude

the period of interim order passed by the court. The suggestion was not

accepted by the Department of Land Reforms on the ground that same

would be in conflict with the retrospective effect of the clause.

Ultimately, in the final recommendation, the period of interim order of

the court was not made. Thus, it is “casus omissus” which cannot be

applied by the court. The maxim “actus curiæ neminem gravabit” is not

applied and is rare if ever applied to interpret the statute.

280. In Padma Sundar Rao (supra), a Constitution Bench of this Court

has declined to rely on the maxim and similarly in Khandaka Jain

Jewellers, (supra), the maxim was not applied. It was urged that in

Snell’s Equity (33rd Edition), 2015 with respect to the maxim, it has been

observed that maxim of equity is not a specific rule of principle of law.

It is a statement of a broad theme which underlies equitable concepts
243

and principles. As a result, the utility of equitable maxim is limited. It

can provide some support to the court when there is some uncertainty

as to the scope of a particular rule of principle and a court in exercising

an equitable discretion may apply the same.

281. Reference was also made to decision of Parson Tools and Plants

(supra) to contend that court cannot supply the omission by engrafting

on it or introducing in it under the guise of interpretation. To do so, it

would be entrenching upon the preserves of the legislature. Where

under Section 24 cut-off date is prescribed and there is no starting point

and period for completion of task, the notion of excluding time spent in

litigations is an alien concept to the provisions. The court must assume

that the old law was oppressive and unjust and such introduction of

exclusion of time may create complication in the working of the statute.

It was also submitted that common law principles can be excluded by

the legislature by express or implied implication in the statute itself. In

this regard, reliance has been placed upon Union of India v. SICOM

Ltd184. It was submitted on behalf of landowners that no provision had

been enacted by issuing any ordinance and later amending the law, for

providing for exclusion of the time spent on interim order under Section

24(2), but Ordinance lapsed. The legislature could have amended the

provisions as such the court cannot exclude the period.

184

(2009) 2 SCC 121
244

282. Before we go to various rival submissions, the pivotal question for

consideration is the interpretation of Section 24 and aims and objectives

of the Act of 2013. Section 24 contemplates that the proceedings

initiated under the Act of 1894, are pending as on the date on which

Act of 2013 has been enacted and if no award has been passed in the

proceedings, then there is no lapse and only determination of

compensation has to be made under the Act of 2013. Where an award

has been passed, it is provided under Section 24(1)(b), the pending

proceedings shall continue under the provisions of the Act of 1894 as if

the old Act has not been repealed. The provisions totally exclude the

applicability of any provision of Act of 2013. There are two requirements

under Section 24(2), which are to be met by the Authorities, where

award has been made 5 years or more prior to the commencement of

the Act of 2013, if the physical possession of the land has not been

taken nor compensation has been paid. If possession has been taken,

compensation has to be paid by the acquiring authorities. The time of

five years is provided for authorities to take action, not to sleep over the

matter. In case of lethargy or machinery and default on the part of the

Authorities and for no other reason the lapse is provided. Lapse is

provided only in case of default by Authorities acquiring the land, not

caused by any other reason or order of the court. When the

interpretation of the provision is clear, there was no necessity for

Parliament to make such a provision under Section 24(2) for exclusion

of the period of the interim order. Though it has excluded the period of
245

interim order for making declaration under the proviso to Sections 19(7)

and exclusion has also been made for computation of the period under

Section 69 of the Act of 2013. It is due to the necessity to provide so in

view of the language of the provision. Under section 69 of the Act of

2013, additional compensation at the rate of 12 per cent has to be given

on market value for the period commencing from the date of the

publication of the preliminary notification under Section 11. The

additional compensation at the rate of 12 per cent has been excluded

for the period acquisition proceedings have been held up on account of

the interim injunction order of any court. The provisions of Section 24

cast an obligation upon the Authorities to take steps meaning thereby

that it is open to them to take such steps, and inaction or lethargy on

their part has not been countenanced by Parliament. Resultantly, lapse

of proceedings takes place. It is by the very nature of the provisions if

it was not possible for authorities for any reason not attributable to

them or the Government to take requisite steps, the period has to be

excluded. The Minister concerned Shri Jairam Ramesh in answer to

the debate quoted above has made it clear that time limit of five years

has been fixed for the Authorities to take action. If we do not exclude

the period of interim order, the very spirit of the provision will be

violated.

283. With respect to fixation of period is five years for the executive

Authorities to take the requisite steps, Delhi Development Authority v.
246

Sukhbir Singh and Ors. (supra) observed that what the legislature is in

effect telling the executive is that they ought to have put their house in

order and completed the acquisition proceedings within a reasonable

time after the pronouncement of award. Not having done so even after

a leeway of five years, would cross the limits of legislative tolerance, after

which the whole proceeding would be deemed to have lapsed. Thus, it

is apparent from the decision of Delhi Development Authority v. Sukhbir

Singh and Ors. (supra), which is relied upon by the landowners, that

time limit is fixed for the executive authorities to take steps. In case

they are prevented by the court’s order, obviously, as per the

interpretation of the provisions is that such period has to be excluded.

In case such a provision would have been made, it would have been “ex

abundanti cautela”. There was no necessity of making such a provision

even if this proposition has been discussed during the formulation of

legislation. However, the provision providing exclusion has been

enacted. It casts an obligation upon the Authorities to take requisite

steps within five years, that by itself excludes such period of interim

order.

284. It was pointed out that in certain States, amendments have been

incorporated in Section 24(2), excluding the period of interim order

passed by the Court. In our opinion, there is no such necessity for

providing exclusion of time and it has been done by the States “ex

abundanti cautela” and there is no doubt about it that Central
247

Government has also tried to introduce the provision of the exclusion of

time by issuance of ordinances, however, they lapsed. It was due to the

interpretation and the decision rendered by this Court in Shree Balaji

Nagar Residential Association (supra), which cannot be said to be laying

down the law correctly.

285. The intent of the Act of 2013, is not to benefit litigants only. It

has introduced a new regime which is beneficial to the landowners. The

provisions of Section 24 by itself do not intend to confer the benefits on

litigating parties, while as per Section 114 of the Act of 2013 and section

6 of the General Clauses Act, has to be litigated as per the provisions of

the Act of 1894.

286. Section 24 treats land acquisition proceedings as one and

prescribes the transition mechanism for the said proceedings.

Possession of the land holdings in normal course is to be taken at one

go, not in piecemeal by the Authorities. Once award is made,

possession can be taken and on that the land vests in State under

section 16, and under Section 17(1) of the Act of 1894, the possession

of any land can be taken for public purposes in cases of urgency without

passing of the award. The expression “acquisition proceedings” is

referred to in sub-sections (1) and (2) of Section 24 and its proviso

makes it clear that in case in majority of the landholdings compensation

has not been deposited, all the beneficiaries as on the date of

notification under Section 4 (of the Act of 1894) shall be entitled to
248

compensation in accordance with the provisions of the Act of 2013.

That also intends to give benefits to all the concerned. Payment of

compensation too has to be made. Possession of land holdings is to be

taken in terms of the notification under Section 4 and declaration under

section 6 and payment has to be made to the beneficiaries. In case

payment has not been made to the landowners nor is possession taken,

there is a lapse. In case compensation has not been deposited within 5

years with respect to majority of land holdings, then all the beneficiaries

are entitled for higher compensation under the Act of 2013.

287. In the opinion of this court it is not the intendment of the Act of

2013 that those who have litigated should get benefits of higher

compensation as contemplated under Section 24 benefit is conferred on

all beneficiaries. It is not intended by the provisions that in piecemeal

the persons who have litigated and have obtained the interim order

should get the benefits of the provisions of the Act of 2013. Those who

have accepted the compensation within 5 years and handed over the

possession too, are to be benefited, in case amount has not been

deposited with respect to majority of holdings. There are cases in which

projects have come up in part and as per plan rest of the area is required

for planned development with respect to which interim stays have been

obtained. It is not the intendment of the law to deliver advantage to

relentless litigants. It cannot be said hence, that it was due to the

inaction of the authorities that possession could not be taken within 5
249

years. Public policy is not to foment or foster litigation but put an end

to it. In several instances, in various High Courts writ petitions were

dismissed by single judge Benches and the writ appeals were pending

for a long time and in which, with respect to part of land of the projects,

efforts were made to obtain the benefit of Section 24(2). Parliament in

our view did not intend to confer benefits to such litigants for the

aforementioned reasons. Litigation may be frivolous or may be worthy.

Such litigants have to stand on the strength of their own case and in

such a case provisions of Section 114 of the Act of 2013 and Section 6

of the General Clauses Act, 1897, are clearly attracted and such

proceedings have to be continued under the provisions of the old Act

that would be in the spirit of Section 24(1)(b) itself of the Act of 2013.

Section 6(b) of the General Clauses Act, 1897, provides that repeal will

not affect the previous operation of any enactment so repealed or

anything duly done or suffered thereunder. Section 6(c) states that

repeal would not affect any right, privilege, obligation or liability

acquired, accrued or incurred under any enactment so repealed. When

there is a provision itself in Section 24(1)(b) of continuance of the

proceedings where award has been passed under the Act of 1894, for

the purposes of Section 24 as provided in Section 24(b), the provisions

of Section 114 is clearly attracted so as the provisions of Section 6 of

the General Clauses Act, 1897, to the extent of non obstante clause of

Section 24, where possession has not been taken nor payment has been

made, there is a lapse, that too by the inaction of the Authorities. Any
250

court’s interim order cannot be said to be inaction of the authorities or

agencies; thus, time period is not to be included for counting the 5 years

period as envisaged in Section 24(2). As per proviso to Section 24(2),

where possession has been taken, but compensation has not been paid

or deposited with respect to majority of land holdings, all the

beneficiaries would be entitled for higher compensation only to that

extent, the provisions of Section 114 of the Act of 2013, would be

superseded but it would not obliterate the general application of Section

6 of the General Clauses Act, 1897, which deals with effect of repeal

except as provided in section 24(2) and its proviso.

288. It was submitted on behalf of acquiring authorities that principle

of casus omissus is not necessarily applicable in all the cases. Reliance

has been placed on Seaford Court Estates Ltd. v. Asher185, in which

following observations have been made:

“The question for decision in this case is whether we are at
liberty to extend the ordinary meaning of “burden” so as to
include a contingent burden of the kind I have described. Now
this court has already held that this sub-section is to be liberally
construed so as to give effect to the governing principles embodied
in the legislation (Winchester Court Ld. v. Miller); and I think we
should do the same. Whenever a statute comes up for
consideration it must be remembered that it is not within human
powers to foresee the manifold sets of facts which may arise,
and, even if it were, it is not possible to provide for them in terms
free from all ambiguity. The English language is not an
instrument of mathematical precision. Our literature would be
much the poorer if it were. This is where the draftsmen of Acts of
Parliament have often been unfairly criticized. A judge, believing
himself to be fettered by the supposed rule that he must look to
the language and nothing else, laments that the draftsmen have
not provided for this or that, or have been guilty of some or other
ambiguity. It would certainly save the judges trouble if Acts of
Parliament were drafted with divine prescience and perfect

185 (1949) 2 K.B. 481
251

clarity. In the absence of it, when a defect appears a judge
cannot simply fold his hands and blame the draftsman. He must
set to work on the constructive task of finding the intention of
Parliament, and he must do this not only from the language of the
statute, but also from a consideration of the social conditions
which gave rise to it, and of the mischief which it was passed to
remedy, and then he must supplement the written word sc as to
give “force and life” to the intention of the legislature. That was
clearly laid down by the resolution of the judges in Heydon’s
case, and it is the safest guide to-day. Good practical advice on
the subject was given about the same time by Plowden in his
second volume Evston v. Studd. Put into homely metaphor it is
this: A judge should ask himself the question: If the makers of the
Act had themselves come across this ruck in the texture of it, how
would they have straightened it out? He must then do as they
would have done. A judge must not alter the material of which it
is woven, but he can and should iron out the creases.
Approaching this case in that way, I cannot help feeling that the
legislature had not specifically in mind a contingent burden such
as we have here. If it had, would it not have put it on the same
footing as an actual burden? I think it would. It would have
permitted an increase of rent when the terms were so changed as
to put a positive legal burden on the landlord. If the parties
expressly agreed between themselves the amount of the increase
on that account the court would give effect to their agreement.
But if, as here, they did not direct their minds to the point, the
court has itself to assess the amount of the increase. It has to
say how much the tenant should pay “in respect of” the transfer
of this burden to the landlord. It should do this by asking what
a willing tenant would agree to pay and a willing landlord would
agree to accept in respect of it. Just as in the earlier cases the
courts were able to assess the value of the “fair wear and tear”
clause, and of a “cooker.” So they can assess the value of the hot
water clause and translate it fairly in terms of rent; and what
applies to hot water applies also to the removal of refuse and so
forth. I agree that the appeal should be allowed, and with the
order proposed by Asquith LJ.”
(emphasis supplied)

289. Reliance was also placed on M. Pentiah v. Muddala

Veeramallappa186, in which this Court observed that where the

language of a statute in its ordinary meaning and grammatical

construction, leads to a manifest contradiction of the apparent purpose

of the enactment or to some inconvenience or absurdity, hardship or

186
(1961) 2 SCR 295
252

injustice, which is not intended, a construction may be put upon it

which modifies the meaning of the words and even the structure of the

sentence. In Hameedia Hardware Stores v. B. Mohan Lal Sowcar187 , it

was held that absurdity has to be avoided. In that decision reliance was

placed on the decision in Seaford Court Estates Ltd. (supra), wherein it

was observed that when a defect or omission appears, a judge cannot

simply fold his hands and blame the draftsman. It is the duty to give

force and life to the intention of the legislature. The court has to

construe the words of the statute in a reasonable way having regard to

the context.

290. Again, in Madan Singh Shekhawat v. Union of India188 , the

decision in Seaford Court Estates Ltd. (supra) has been followed.

Following observations have been made:

“18. Applying the above rule, we are of the opinion that the rule-
makers did not intend to deprive the army personnel of the benefit
of the disability pension solely on the ground that the cost of the
journey was not borne by the public exchequer. If the journey was
authorised, it can make no difference whether the fare for the
same came from the public exchequer or the army personnel
himself.”

291. There cannot be any dispute with the above propositions.

However, in the present case, when we construe the provisions of

Section 24, it clearly ousts the period spent during the interim stay of

the court. Five years’ period is fixed for the purpose to take action, if

they have not taken the action for 5 years or more, then there is lapse,

187 (1988) 2 SCC 513
188 (1999) 6 SCC 459
253

not otherwise. Even if there had been a provision made with respect to

the exclusion of time spent in the court proceedings with respect to

interim stay due to court’s order, it could have been ex abundanti

cautela, which has been considered by this Court in Union of India and

Ors. v. Modi Rubber Ltd189. It would have been superfluous to make

such a provision. Following observations were made in Modi Rubber

Ltd. (supra):

“7. Both these notifications, as the opening part shows, are
issued under Rule 8(1) of the Central Excise Rules, 1944 and
since the definition of ‘duty’ in Rule 2, clause (v) must necessarily
be projected in Rule 8(1) and the expression “duty of excise” in
Rule 8(1) must be read in the light of that definition, the same
expression used in these two notifications issued under Rule 8(1)
must also be interpreted in the same sense, namely, duty of
excise payable under the Central Excises and Salt Act, 1944 and
the exemption granted under both these notifications must be
regarded as limited only to such duty of excise. But the
respondents contended that the expression “duty of excise” was
one of large amplitude and in the absence of any restrictive or
limitative words indicating that it was intended to refer only to
duty of excise leviable under the Central Excises and Salt Act,
1944, it must be held to cover all duties of excise whether leviable
under the Central Excises and Salt Act, 1944 or under any other
enactment. The respondents sought to support this contention by
pointing out that whenever the Central Government wanted to
confine the exemption granted under a notification to the duty of
excise leviable under the Central Excises and Salt Act, 1944, the
Central Government made its intention abundantly clear by using
appropriate words of limitation such as “duty of excise leviable …
under Section 3 of the Central Excises and Salt Act, 1944” or
“duty of excise leviable … under the Central Excises and Salt Act,
1944” or “duty of excise leviable … under the said Act” as in the
Notification No. CER-8(3)/55-C.E. dated September 17, 1955,
Notification No. 255/77-C.E. dated July 20, 1977, Notification No.
CER-8(1)/55-C.E. dated September 2, 1955, Notification No. CER-
8(9)/55-C.E. dated December 31, 1955, Notification No. 95/61-
C.E. dated April 1, 1961, Notification No. 23/55-C.E. dated April
29, 1955 and similar other notifications. But, here said the
respondents, no such words of limitation are used in the two
notifications in question and the expression “duty of excise” must,
therefore, be read according to its plain natural meaning as
including all duties of excise, including special duty of excise and
auxiliary duty of excise. Now, it is no doubt true that in these
various notifications referred to above, the Central Government

189
(1986) 4 SCC 66
254

has, while granting exemption under Rule 8(1), used specified
language indicating that the exemption, total or partial, granted
under each such notification is in respect of excise duty leviable
under the Central Excises and Salt Act, 1944. But, merely
because, as a matter of drafting, the Central Government has in
some notifications specifically referred to the excise duty in
respect of which exemption is granted as “duty of excise” leviable
under the Central Excises and Salt Act, 1944, it does not follow
that in the absence of such words of specificity, the expression
“duty of excise” standing by itself must be read as referring to all
duties of excise. It is not uncommon to find that the legislature
sometimes, with a view to making its intention clear beyond
doubt, uses language ex abundanti cautela though it may not be
strictly necessary and even without it the same intention can be
spelt out as a matter of judicial construction and this would be
more so in case of subordinate legislation by the executive. The
officer drafting a particular piece of subordinate legislation in the
Executive Department may employ words with a view to leaving
no scope for possible doubt as to its intention or sometimes even
for greater completeness, though these words may not add
anything to the meaning and scope of the subordinate legislation.
Here, in the present notifications, the words duty of excise
leviable under the Central Excises and Salt Act, 1944’ do not find
a place as in the other notifications relied upon by the
respondents. But, that does not necessarily lead to the inference
that the expression “duty of excise” in these notifications was
intended to refer to all duties of excise including special and
auxiliary duties of excise. The absence of these words does not
absolve us from the obligation to interpret the expression “duty of
excise” in these notifications. We have still to construe this
expression — what is its meaning and import — and that has to
be done bearing in mind the context in which it occurs. We have
already pointed out that these notifications having been issued
under Rule 8(1), the expression “duty of excise” in these
notifications must bear the same meaning which it has in Rule
8(1) and that meaning clearly is — excise duty payable under the
Central Excises and Salt Act, 1944 as envisaged in Rule 2 clause

(v). It cannot in the circumstances bear an extended meaning so
as to include special excise duty and auxiliary excise duty.”
(emphasis supplied)

292. Relying on State of U.P. and Ors. v. Hindustan Aluminium Corpn.

and Ors.,190 it was submitted that whether a piece of legislation has

spent itself or exhausted in operation are matters of law and no such

rights exist in a citizen to ask for a declaration that the law has been

impliedly repealed on any such ground. In extreme and clear cases, no

190 (1979) 3 SCC 229
255

doubt, an antiquated law may be said to have become obsolete and,

more so, if it is a penal law and has become incapable of user by a

drastic change in the circumstances. Craies on Statute Law, Seventh

Edition, has discussed about different classes of enactments such as

expired, spent, repealed in general terms, virtually repealed, superseded

and obsolete.

293. The Act of 2013 operates prospectively. Section 114 of the Act of

2013, effects a repeal, but with certain savings, in accordance with

Section 24. Thus, acquisition proceedings are preserved under the Act

of 1894, till the stage of making of award; where award is not made, the

provisions of compensation under the Act of 2013 apply; where award

is made, further proceedings would be under the new Act (of 2013). In

case possession has been taken by the authorities concerning awards

which were made 5 years or before, under the Act of 1894 and such

proceedings are pending, that would be due to inaction of the

authorities on the date on which the Act of 2013 came into force. The

lapse (of acquisition) and higher compensation to follow only under

Section 24(2), where compensation is not paid, nor possession of lands

is taken. A period of 5 years or more has been provided under Section

24. In the case, however, where possession is taken, but compensation

is not deposited in respect of majority landholdings, compensation

under the Act of 2013 is payable to all- including those who received

compensation earlier.

256

294. Reliance has been placed on the decision in Syndicate Bank v.

Prabha D. Naik and Anr191, in which it was observed that the legislature

is supposed to be conscious of the needs of the society at large and the

prevalent laws. It was held that there is no reason for assuming that

the legislature was not aware of the difficulties and the prevailing

situation. There is no dispute with the aforesaid proposition; however,

it does not espouse the cause of the landowners.

295. The correctness of the decision of Shree Balaji Nagar Residential

Association (supra) was doubted in Yogesh Neema and Ors. (supra), and

the matter was referred to a larger Bench. In Shree Balaji Nagar

Residential Association (supra) following observations were made:

“11. From a plain reading of Section 24 of the 2013 Act, it is clear
that Section 24(2) of the 2013 Act does not exclude any period
during which the land acquisition proceeding might have
remained stayed on account of stay or injunction granted by any
court. In the same Act, the proviso to Section 19(7) in the context of
limitation for publication of declaration under Section 19(1) and
the Explanation to Section 69(2) for working out the market value
of the land in the context of delay between preliminary
notification under Section 11 and the date of the award,
specifically provide that the period or periods during which the
acquisition proceedings were held up on account of any stay or
injunction by the order of any court be excluded in computing the
relevant period. In that view of the matter, it can be safely
concluded that the legislature has consciously omitted to extend
the period of five years indicated in Section 24(2) even if the
proceedings had been delayed on account of an order of stay or
injunction granted by a court of law or for any reason. Such casus
omissus cannot be supplied by the court in view of law on the
subject elaborately discussed by this Court in Padma Sundara
Rao v. State of T.N (2002) 3 SCC 533.

12. Even in the Land Acquisition Act of 1894, the legislature had
brought about amendment in Section 6 through an Amendment
Act
of 1984 to add Explanation 1 for the purpose of excluding the

191
(2001) 4 SCC 713
257

period when the proceeding suffered stay by an order of the court,
in the context of limitation provided for publishing the declaration
under Section 6(1) of the Act. To a similar effect was the
Explanation to Section 11-A, which was added by Amendment
Act
68 of 1984. Clearly, the legislature has, in its wisdom, made
the period of five years under Section 24(2) of the 2013 Act
absolute and unaffected by any delay in the proceedings on
account of any order of stay by a court. The plain wordings used
by the legislature are clear and do not create any ambiguity or
conflict. In such a situation, the court is not required to depart
from the literal rule of interpretation.”

296. This Court held that the conscious omission by Parliament in

Section 24(2) to exclude the period, an interim order operates is to be

given effect and that the court should not fill in the gap. In Indore

Development Authority (supra), the decision rendered in Shree Balaji

Nagar Residential Association (supra) was overruled with consensus and

it was not the subject matter in Pune Municipal Corporation (supra).

However, the learned counsel for the parties had urged that this

question arises as such it should be framed and considered by the

present larger Bench. Hence, we have examined the matter afresh.

297. In cases where some landowners have chosen to take recourse to

litigation (which they have a right to) and have obtained interim orders

on taking possession or orders of status quo, as a matter of practical

reality it is not possible for the authorities or State officials to take the

possession or to make payment of the compensation. In several

instances, such interim orders also impeded the making of an award.

Now, so far as awards (and compensation payments, pursuant to such

proceedings were concerned) the period provided for making of awards

under the Act of 2013 could be excluded by virtue of Explanation to
258

Section 11A.192 Thus, no fault of inaction can be attributed to the

authorities and those who had obtained such interim orders, cannot

benefit by their own action in filing litigation, which may or may not be

meritorious. Apart from the question of merits, when there is an interim

order with respect to the possession or order of status quo or stay of

further proceedings, the authorities cannot proceed; nor can they pay

compensation. Their obligations are intertwined with the scheme of

land acquisition. It is observed that authorities may wait in the

proceedings till the interim order is vacated.

298. In our considered opinion, litigation which initiated by the

landowners has to be decided on its own merits and the benefits of

Section 24(2) should not be available to the litigants. In case there is

no interim order, they can get the benefits they are entitled to, not

otherwise as a result of fruit of litigation, delays and dilatory tactics and

some time it may be wholly frivolous pleas and forged documents as

observed in V. Chandrasekaran (supra) mentioned above.

192
“11-A. Period within which an award shall be made
The Collcctor shall make an award under section 11 within a period of two years from the
date of the publication of the declaration and ifno award is made within that period. the
entire proceedings for the acquisition ofthc land shall lapse:

Provided that in a case where thc said declaration has been published before the
commencement of the Land Acquisition (Amendment) Act. 1984 the award shall be made
within a period oftwo years from such commencements.
Explanation: In computing the period of two years referred to in this section. the period
during which any action or proceeding to be taken in pursuance of the s..’lid declaration is
stayed by an order ofa court shall be excluded.

259

299. In Abhey Ram (Dead) by L.Rs. and Ors. v. Union of India and

Ors193., this Court considered the extended meaning of words “stay of

the action or proceedings”. It was observed that any type of orders

passed by this Court would be an inhibitive action on the part of the

Authorities to proceed further. This Court observed thus:

“9. Therefore, the reasons given in B.R. Gupta v. Union of India,
37 (1989) DLT 150 (Del) DB, are obvious with reference to the
quashing of the publication of the declaration under Section 6 vis-
à-vis the writ petitioners therein. The question that arises for
consideration is whether the stay obtained by some of the
persons who prohibited the respondents from publication of the
declaration under Section 6 would equally be extendible to the
cases relating to the appellants. We proceed on the premise that
the appellants had not obtained any stay of the publication of the
declaration but since the High Court in some of the cases has, in
fact, prohibited them as extracted hereinbefore, from publication
of the declaration, necessarily, when the Court has not restricted
the declaration in the impugned orders in support of the
petitioners therein, the officers had to hold back their hands till
the matters were disposed of. In fact, this Court has given
extended meaning to the orders of stay or proceeding in various
cases, namely, Yusufbhai Noormohmed Nendoliya v. State of
Gujarat
, (1991) 4 SCC 531, Hansraj H. Jain v. State of
Maharashtra
, (1993) 3 SCC 634, Sangappa Gurulingappa Sajjan
v. State of Karnataka
, (1994) 4 SCC 145, Gandhi Grah Nirman
Sahkari Samiti Ltd. v. State of Rajasthan
, (1993) 2 SCC 662, G.
Narayanaswamy Reddy v. Govt. of Karnataka
, (1991) 3 SCC 261
and Roshnara Begum v. Union of India, (1986) 1 Apex Dec 6. The
words “stay of the action or proceeding” have been widely
interpreted by this Court and mean that any type of the orders
passed by this Court would be an inhibitive action on the part of
the authorities to proceed further. When the action of conducting
an enquiry under Section 5-A was put in issue and the
declaration under Section 6 was questioned, necessarily unless
the Court holds that enquiry under Section 5-A was properly
conducted and the declaration published under Section 6 was
valid, it would not be open to the officers to proceed further into
the matter. As a consequence, the stay granted in respect of some
would be applicable to others also who had not obtained stay in
that behalf. We are not concerned with the correctness of the
earlier direction with regard to Section 5-A enquiry and
consideration of objections as it was not challenged by the
respondent Union. We express no opinion on its correctness,
though it is open to doubt.”

193
(1997) 5 SCC 421
260

300. In Om Parkash v. Union of India and Ors.194, it was observed that

interim order of stay granted in one of the matters of the landowners

would put complete restraint on the respondents to proceed further to

issue declaration under Section 6 of the Act. It was observed as under:

“72. Thus, in other words, the interim order of stay granted in
one of the matters of the landowners would put complete restraint
on the respondents to have proceeded further to issue notification
under Section 6 of the Act. Had they issued the said notification
during the period when the stay was operative, then obviously
they may have been hauled up for committing contempt of court.
The language employed in the interim orders of stay is also such
that it had completely restrained the respondents from
proceeding further in the matter by issuing
declaration/notification under Section 6 of the Act.”

301. In Suresh Chand v. Gulam Chisti195, this Court considered the

provision where tenant would not be entitled to the protection of Section

39. If the suit had prolonged beyond ten years, then the tenant would

be entitled to such protection. The interpretation suggested was not

accepted by this Court as that would encourage the tenant to protract

the litigation. This Court frowned upon obtaining of fruits by

protracting the litigation on the ground of public policy. This Court

observed thus:

“17. It was argued that the words ‘commencement of this Act’
should be construed to mean the date on which the moratorium
period expired and the Act became applicable to the demised
building. Such a view would require this Court to give different
meanings to the same expression appearing at two places in the
same section. The words ‘on the date of commencement of this
Act’ in relation to the pendency of the suit would mean July 15,
1972 as held in Om Prakash Gupta v. Dig Vijendrapal Gupta,
(1982) 2 SCC 61, but the words ‘from such date of
commencement’ appearing immediately thereafter in relation to
the deposit to be made would have to be construed as the date of
actual application of the Act at a date subsequent to July 15,
1972. Ordinarily, the rule of construction is that the same

194
(2010) 4 SCC 17
195
(1990) 1 SCC 593
261

expression where it appears more than once in the same statute,
more so in the same provision, must receive the same meaning
unless the context suggests otherwise. Besides, such an
interpretation would render the use of prefix ‘such’ before the
word ‘commencement’ redundant. Thirdly such an interpretation
would run counter to the view taken by this Court in Atma Ram
Mittal case, (1988) 4 SCC 284, wherein it was held that no man
could be made to suffer because of the court’s fault or court’s
delay in the disposal of the suit. To put it differently, if the suit
could be disposed of within the period of 10 years, the tenant
would not be entitled to the protection of Section 39, but if the suit
is prolonged beyond ten years, the tenant would be entitled to
such protection. Such an interpretation would encourage the
tenant to protract the litigation, and if he succeeds in delaying the
disposal of the suit till the expiry of 10 years, he will secure the
benefit of Section 39, otherwise not. We are, therefore, of the
opinion that it is not possible to uphold the argument.”

302. In Shyam Sunder and Ors. v. Ram Kumar and Anr.196, a

Constitution Bench of this Court observed that substantive rights of the

parties are to be examined on the date of the suit unless the legislature

makes such rights retrospective. The Court made following

observations:

“28. From the aforesaid decisions the legal position that emerges
is that when a repeal of an enactment is followed by a fresh
legislation, such legislation does not affect the substantive rights
of the parties on the date of the suit or adjudication of the suit
unless such a legislation is retrospective and a court of appeal
cannot take into consideration a new law brought into existence
after the judgment appealed from has been rendered because the
rights of the parties in an appeal are determined under the law
in force on the date of the suit. However, the position in law would
be different in the matters which relate to procedural law, but so
far as substantive rights of parties are concerned, they remain
unaffected by the amendment in the enactment. We are,
therefore, of the view that where a repeal of provisions of an
enactment is followed by fresh legislation by an amending Act,
such legislation is prospective in operation and does not affect
substantive or vested rights of the parties unless made
retrospective either expressly or by necessary intendment. We
are further of the view that there is a presumption against the
retrospective operation of a statute and further a statute is not to
be construed to have a greater retrospective operation than its
language renders necessary, but an amending Act which affects
the procedure is presumed to be retrospective unless the
amending Act provides otherwise. We have carefully looked into
the new substituted Section 15 brought in the parent Act by the

196
(2001) 8 SCC 24
262

Amendment Act, 1995 but do not find it either expressly or by
necessary implication retrospective in operation which may affect
the rights of the parties on the date of adjudication of the suit and
the same is required to be taken into consideration by the
appellate court. In Shanti Devi v. Hukum Chand, (1996) 5 SCC
768, this Court had occasion to interpret the substituted Section
15
with which we are concerned and held that on a plain reading
of Section 15, it is clear that it has been introduced prospectively
and there is no question of such section affecting in any manner
the judgment and decree passed in the suit for pre-emption
affirmed by the High Court in the second appeal. We are
respectfully in agreement with the view expressed in the said
decision and hold that the substituted Section 15 in the absence
of anything in it to show that it is retrospective, does not affect
the right of the parties which accrued to them on the date of the
suit or on the date of passing of the decree by the court of the first
instance. We are also of the view that the present appeals are
unaffected by the change in law insofar it related to the
determination of the substantive rights of the parties and the
same are required to be decided in the light of the law of pre-
emption as it existed on the date of passing of the decree.”
(emphasis supplied)

303. In Sarah Mathew (supra), it was observed that delay caused by the

court in taking cognizance cannot deny justice to the litigant. A court

of law would interpret and make the reasonable construction rather

than applying a doctrine which would make the provision

unsustainable and ultra vires the Constitution. This Court observed

thus:

“37. We are inclined to take this view also because there has to
be some amount of certainty or definiteness in matters of
limitation relating to criminal offenses. If, as stated by this Court,
taking cognizance is the application of mind by the Magistrate to
the suspected offense, the subjective element comes in. Whether
a Magistrate has taken cognizance or not will depend on facts
and circumstances of each case. A diligent complainant or the
prosecuting agency which promptly files the complaint or initiates
prosecution would be severely prejudiced if it is held that the
relevant point for computing limitation would be the date on
which the Magistrate takes cognizance. The complainant or the
prosecuting agency would be entirely left at the mercy of the
Magistrate, who may take cognizance after the limitation period
because of several reasons; systemic or otherwise. It cannot be
the intention of the legislature to throw a diligent complainant out
of the court in this manner. Besides, it must be noted that the
complainant approaches the court for redressal of his grievance.

263

He wants action to be taken against the perpetrators of crime.
The courts functioning under the criminal justice system are
created for this purpose. It would be unreasonable to take the
view that delay caused by the court in taking cognizance of a
case would deny justice to a diligent complainant. Such an
interpretation of Section 468 CrPC would be unsustainable and
would render it unconstitutional. It is well settled that a court of
law would interpret a provision which would help to sustain the
validity of the law by applying the doctrine of reasonable
construction rather than applying a doctrine which would make
the provision unsustainable and ultra vires the Constitution. (U.P.
Power Corpn. Ltd. v. Ayodhya Prasad Mishra
. (2008) 10 SCC

139)”

304. When the authorities are disabled from performing duties due to

impossibility, would be a good excuse for them to save them from rigour

of provisions of Section 24(2). A litigant may be right or wrong. He

cannot be permitted to take advantage of a situation created by him of

interim order. The doctrine “commodum ex-injuria sua Nemo habere

debet” that is convenience cannot accrue to a party from his own wrong.

Provisions of Section 24 do not discriminate litigants or non-litigants

and treat them differently with respect to the same acquisition,

otherwise, anomalous results may occur and provisions may become

discriminatory in itself.

305. In Union of India v. Shiv Raj197, this Court did not consider the

question of exclusion of the time. In Karnail Kaur and Ors. v. State of

Punjab and Ors., (supra) and in Shree Balaji Nagar Residential

Association (supra), various aspects including the interpretation of

provisions of Section 24 were not taken into consideration. Thus, the

said rulings cannot be said to be laying down good law.

197

2014 (6) SCC 564
264

306. In Union of India and Ors. v. North Telumer Colliery & Ors198, this

Court observed that delaying tactics should not be permitted to fructify.

By causing delay, the owner would get huge amount of interest, but he

may not get a penny out of the principal amount. It would amount to

conferring unjust benefit on the owners which can never be the

intention of the Parliament. This Court observed:

“8. The High Court’s conclusions are primarily based on the
interpretation of Section 18(5) of the Coal Act. The High Court has
quoted the meaning of words “enure” and “benefit” from various
dictionaries. No dictionary or any outside assistance is needed to
understand the meaning of these simple words in the context and
scheme of the Coal Act. The interest has to enure to the benefit of
the owners of the coal mines. The claims before the Commissioner
under the Coal Act are from the creditors of the owners, and the
liabilities sought to be discharged are also of the owners of the
coal mines. When the debts are paid and the liabilities
discharged, it is only the owners of coal mines who are benefited.
Taking away the interest amount by the owners without
discharging their debts and liabilities would be unreasonable.
They have only to adopt delaying tactics to postpone the
disbursement of claims and consequently earn more interest. Due
to such delay, the owner would get huge amount of interest
though ultimately, he may not get a penny out of principal amount
on the final settlement of claims. It would amount to conferring
unjust benefit on the owners which can never be the intention of
the Parliament. We do not agree with the interpretation given by
the High Court and hold that the interest accruing under the Coal
Act
is the money paid to the Commissioner in relation to the coal
mine and the same has to be utilized by the Commissioner in
meeting the claims of the creditors and discharging other
liabilities in accordance with the provisions of the Coal Act.”

307. It may not be doubtful conduct to file frivolous litigation and

obtain stay; but benefit of Section 24 (2) should not be conferred on

those who prevented the taking of possession or payment of

compensation, for the period spent during the stay.

198

1989 (3) SCC 411
265

308. In Padma Sundara Rao (Dead) & Ors. (supra), this Court

considered the question of casus omissus and observed thus:

“12. The rival pleas regarding rewriting of statute and casus
omissus need careful consideration. It is a well-settled principle
in law that the court cannot read anything into a statutory
provision which is plain and unambiguous. A statute is an edict
of the legislature. The language employed in a statute is the
determinative factor of legislative intent. The first and primary
rule of construction is that the intention of the legislation must be
found in words used by the legislature itself. The question is not
what may be supposed and has been intended, but what has
been said. “Statutes should be construed, not as theorems of
Euclid,” Judge Learned Hand said, “but words must be construed
with some imagination of the purposes which lie behind them.”
(See Lenigh Valley Coal Co. v. Yensavage, 218 FR 547) The view
was reiterated in Union of India v. Filip Tiago De Gama of Vedem
Vasco De Gama
(1990) 1 SCC 277.

13. In D.R. Venkatchalam v. Deputy Transport Commissioner
(1977) 2 SCC 273, it was observed that Courts must avoid the
danger of a priori determination of the meaning of a provision
based on their own preconceived notions of ideological structure
or scheme into which the provision to be interpreted is somewhat
fitted. They are not entitled to usurp legislative function under the
disguise of interpretation.

14. While interpreting a provision, the court only interprets the
law and cannot legislate it. If a provision of law is misused and
subjected to the abuse of process of law, it is for the legislature
to amend, modify, or repeal it, if deemed necessary. (See Rishabh
Agro Industries Ltd. v. P.N.B. Capital Services Ltd., (2000) 5 SCC

515) The legislative casus omissus cannot be supplied by the
judicial interpretative process. The language of Section 6(1) is
plain and unambiguous. There is no scope for reading something
into it, as was done in Narasimhaiah’s case. In Nanjudaiah’s
case, the period was further stretched to have the time period run
from the date of service of the High Court’s order. Such a view
cannot be reconciled with the language of Section 6(1). If the view
is accepted, it would mean that a case can be covered by not only
clause (i) and/or clause (ii) of the proviso to Section 6(1), but also
by a non-prescribed period. The same can never be the legislative
intent.

16. The plea relating to the applicability of the stare decisis
principles is clearly unacceptable. The decision in K.
Chinnathambi Gounder v. Government of T.N
., AIR 1980 Mad 251
was rendered on 22-6-1979, i.e., much prior to the amendment
by the 1984 Act. If the legislature intended to give a new lease of
life in those cases where the declaration under Section 6 is
quashed, there is no reason why it could not have done so by
specifically providing for it. The fact that the legislature
specifically provided for periods covered by orders of stay or
266

injunction clearly shows that no other period was intended to be
excluded and that there is no scope for providing any other period
of limitation. The maxim actus curiae neminem gravabit
highlighted by the Full Bench of the Madras High Court has no
application to the fact situation of this case.”

309. There is no dispute with the aforesaid proposition that casus

omissus cannot be applied by the court and in case of clear necessity,

the court has to interpret the law, if the provision of law is misused and

subjected to abuse of process of law. It is for the legislature to amend,

modify and repeal a law, if deemed necessary. Because of the above-

mentioned interpretation of the provisions of Section 24 itself, we are

unable to accept the submission made. We are not applying casus

omissus as urged. In Padma Sundara Rao (supra), this Court

considered the period of limitation for issuances of declaration under

Section 6 of the Act of 1894. The period has been stretched further in

the case of State of Karnataka v. D.C. Nanjudaiah 199. Few expressions

in the aforesaid decision were held to be incorrect. In Padma Sundara

Rao (supra), this Court held that when a period, which the legislature

has specifically provided, is covered by orders of stay and injunction, no

other period could be intended to be excluded by providing time period

to run from the date of service of the High Court’s order and it would

not be open to court to add to that period. The question in Padma

Sundara Rao (supra) was totally different and it was of counting the

period over and above excluded in the provisions, inter alia, from the

very interpretation of Section 24.

199

(1996) 10 SCC 619
267

310. As regards application of the maxim to a statute, in Rana Girders

Ltd. v. Union of India200, this Court observed that the statutory provision

would prevail upon the common law principles. The decision in Rana

Girders Ltd. (supra) was considered in Union of India (supra) where this

Court observed thus:

“9. Generally, the rights of the Crown to recover the debt would
prevail over the right of a subject. Crown debt means the “debts
due to the State or the King; debts which a prerogative entitles
the Crown to claim priority for before all other creditors.” [See
Advanced Law Lexicon by P. Ramanatha Aiyar (3rd Edn.), p.
1147.] Such creditors, however, must be held to mean unsecured
creditors. The principle of Crown debt as such pertains to the
common law principle. A common law, which is law within the
meaning of Article 13 of the Constitution, is saved in terms of
Article 372 thereof. Those principles of common law, thus, which
were existing at the time of coming into force of the Constitution
of India, are saved by reason of the aforementioned provision. A
debt that is secured or which by reason of the provisions of a
statute becomes the first charge over the property having regard
to the plain meaning of Article 372 of the Constitution of India
must be held to prevail over the Crown debt, which is an
unsecured one.

10. It is trite that when Parliament or a State Legislature makes
an enactment, the same will prevail over the common law. Thus,
the common law principle which was existing on the date of
coming into force of the Constitution of India must yield to a
statutory provision. To achieve the same purpose, Parliament as
also the State Legislatures inserted provisions in various
statutes, some of which have been referred to hereinbefore,
providing that the statutory dues shall be the first charge over the
properties of the taxpayer. This aspect of the matter has been
considered by this Court in a series of judgments.”

311. There is no doubt that common law principles have to be weighed

upon the statutory provision and latter has to prevail, but the statutory

provision itself makes it clear that in the instant matter such period has

to be excluded, thus, the principles of common law also apply with full

200
2013 (10) SCC 746
268

force. In Mary Angel and Ors. v. State of T.N.201, the maxim “expressio

unius est exclusio alterius” came to be considered by this Court. It was

held that maxim needs to be applied when its application having regard

to the subject matter to which it is to be applied, leads to inconsistency

or injustice. This Court observed:

“19. Further, for the rule of interpretation on the basis of the
maxim “expressio unius est exclusio alterius,” it has been
considered in the decision rendered by the Queen’s Bench in the
case of Dean v. Wiesengrund, (1955) 2 QB 120. The Court
considered the said maxim and held that after all, it is no more
than an aid to construction and has little if any, weight where it
is possible to account for the “inclusio unius” on grounds other
than the intention to affect the “exclusio alterius.” Thereafter, the
Court referred to the following passage from the case of
Colquhoun v. Brooks, (1887) 19 QBD 400, QBD at 406 wherein
the Court called for its approval—
“… ‘The maxim “expressio unius est exclusio alterius” has been
pressed upon us. I agree with what is said in the court below by
Wills, J., about this maxim. It is often a valuable servant, but a
dangerous master to follow in the construction of statutes or
documents. The exclusio is often the result of inadvertence or
accident, and the maxim ought not to be applied, when its
application, having regard to the subject-matter to which it is to
be applied, leads to inconsistency or injustice.’ In my opinion, the
application of the maxim here would lead to inconsistency and
injustice, and would make Section 14(1) of the Act of 1920
uncertain and capricious in its operation.”

312. The maxim “lex non cogit ad impossibilia” means that the law does

not expect the performance of the impossible. Though payment is

possible but the logic of payment is relevant. There are cases in which

compensation was tendered, but refused and then deposited in the

treasury. There was litigation in court, which was pending (or in some

cases, decided); earlier references for enhancement of compensation

were sought and compensation was enhanced. There was no challenge

201
1999 (5) SCC 209
269

to acquisition proceedings or taking possession etc. In pending matters

in this Court or in the High Court even in proceedings relating to

compensation, Section 24 (2) was invoked to state that proceedings have

lapsed due to non-deposit of compensation in the court or to deposit in

the treasury or otherwise due to interim order of the court needful could

not be done, as such proceedings should lapse.

313. In Chander Kishore Jha v. Mahabir Prasad202 , an election petition

was to be presented in the manner prescribed in Rule 6 of Chapter XXI-

E of the Patna High Court Rules. The rules stipulated that the election

petition, could under no circumstances, be presented to the Registrar

to save the period of limitation. The election petition could be presented

in the open court upto 4.15 p.m. i.e., working hours of the court. The

Chief Justice had passed the order that court shall not sit for the rest

after 3.15 p.m. Thus, the petition filed the next day was held to be

within time. In Mohammed Gazi v. State of M.P. & Ors203., the maxim

“actus curiae neminem gravabit” came up for consideration along with

maxim “lex non cogit ad impossibilia” – the law does not compel a man

to perform act which is not possible. Following observations had been

made:

“7. In the facts and circumstances of the case, the maxim of
equity, namely, actus curiae neminem gravabit — an act of the
court shall prejudice no man, shall be applicable. This maxim is
founded upon justice and good sense, which serves a safe and
certain guide for the administration of law. The other maxim is,
lex non cogit ad impossibilia — the law does not compel a man to

202
1999 (8) SCC 266
203
2000 (4) SCC 342
270

do what he cannot possibly perform. The law itself and its
administration are understood to disclaim as it does in its general
aphorisms, all intention of compelling impossibilities, and the
administration of law must adopt that general exception in
consideration of particular cases. The applicability of the
aforesaid maxims has been approved by this Court in Raj Kumar
Dey v. Tarapada Dey
, (1987) 4 SCC 398 and Gursharan Singh v.
New Delhi Municipal Committee
, (1996) 2 SCC 459.”

314. Another Roman Law maxim “nemo tenetur ad impossibilia”, means

no one is bound to do an impossibility. Though such acts of taking

possession and disbursement of compensation are not impossible, yet

they are not capable of law performance, during subsistence of a court’s

order; the order has to be complied and cannot be violated. Thus, on

equitable principles also, such a period has to be excluded. In Industrial

Finance Corporation of India Ltd. v. Cannanore Spinning & Weaving Mills

Ltd. & Ors.204, this Court observed that where law creates a duty or

charge and the party is disabled to perform it, without any default and

has no remedy over, there the law will in general excuse him. This Court

relying upon the aforesaid maxim observed as under:

“30. The Latin maxim referred to in the English judgment lex non
cogit ad impossibilia also expressed as impotentia excusat legem
in common English acceptation means, the law does not compel
a man to do that which he cannot possibly perform. There ought
always thus to be an invincible disability to perform the
obligation, and the same is akin to the Roman maxim nemo
tenetur ad impossible. In Broom’s Legal Maxims, the state of the
situation has been described as below:

“It is, then, a general rule which admits of ample practical
illustration, that impotentia excusat legem; where the law
creates a duty or charge, and the party is disabled to
perform it, without any default in him, and has no
remedy over, there the law will in general excuse him (t):

and though impossibility of performance is, in general, no
excuse for not performing an obligation which a party has
expressly undertaken by contract, yet when the
obligation is one implied by law, impossibility of
performance is a good excuse. Thus in a case in which

204
2002 (5) SCC 54
271

consignees of a cargo were prevented from unloading a
ship promptly by reason of a dock strike, the Court, after
holding that in the absence of an express agreement to
unload in a specified time there was implied obligation to
unload within a reasonable time, held that the maxim lex
non cogit ad impossibilia applied, and Lindley, L.J., said:
‘We have to do with implied obligations, and I am not
aware of any case in which an obligation to pay damages
is ever cast by implication upon a person for not doing
that which is rendered impossible by causes beyond his
control.’ ”

315. In HUDA and Anr. v. Dr. Babeswar Kanhar & Anr 205, this Court

considered the general principle that a party prevented from doing an

act by some circumstances beyond his control, can do so at the first

subsequent opportunity as held in Sambasiva Chari v. Ramasami

Reddi206. In Dr. Babeswar Kanhar (supra), it was observed thus:

“5. What is stipulated in clause 4 of the letter dated 30-10-2001
is a communication regarding refusal to accept the allotment. This
was done on 28-11-2001. Respondent 1 cannot be put to a loss
for the closure of the office of HUDA on 1-12-2001 and 2-12-2001
and the postal holiday on 30-11-2001. In fact, he had no control
over these matters. Even the logic of Section 10 of the General
Clauses Act, 1897, can be pressed into service. Apart from the
said section and various provisions in various other Acts, there is
the general principle that a party prevented from doing an act by
some circumstances beyond his control, can do so at the first
subsequent opportunity (see Sambasiva Chari v. Ramasami
Reddi
, (1898) 8 MLJ 265). The underlying object of the principle
is to enable a person to do what he could have done on holiday,
on the next working day. Where, therefore, a period is prescribed
for the performance of an act in a court or office, and that period
expires on holiday, then the act should be considered to have
been done within that period if it is done on the next day on which
the court or office is open. The reason is that the law does not
compel the performance of an impossibility. (See Hossein Ally v.

Donzelle, ILR (1880) 5 Cal 906.) Every consideration of justice
and expediency would require that the accepted principle, which
underlies Section 10 of the General Clauses Act, should be
applied in cases where it does not otherwise in terms apply. The
principles underlying are lex non cogit ad impossibilia (the law
does not compel a man to do the impossible) and actus curiae
neminem gravabit (the act of court shall prejudice no man). Above
being the position, there is nothing infirm in the orders passed by
the forums below. However, the rate of interest fixed appears to

205 (2005) 1 SCC 191
206 ILR (1899) 22 Mad 179
272

be slightly on the higher side and is reduced to 9% to be paid with
effect from 3-12-2001, i.e., the date on which the letter was
received by HUDA.”

316. In re Presidential Poll207, this Court made similar observations.

When there is a disability to perform a part of the law, such a charge

has to be excused. When performance of the formalities prescribed by

a statute is rendered impossible by circumstances over which the

persons concerned have no control, it has to be taken as a valid excuse.

The Court observed:

“15. The impossibility of the completion of the election to fill the
vacancy in the office of the President before the expiration of the
term of office in the case of death of a candidate as may appear
from Section 7 of the 1952 Act does not rob Article 62(1) of its
mandatory character. The maxim of law impotentia excusat
legam is intimately connected with another maxim of law lex non
cogit ad impossibilia. Impotentia excusat legam is that when
there is a necessary or invincible disability to perform the
mandatory part of the law that impotentia excuses. The law does
not compel one to do that which one cannot possibly perform.
“Where the law creates a duty or charge, and the party is
disabled to perform it, without any default in him and has no
remedy over it, there the law will in general excuse him.”
Therefore, when it appears that the performance of the formalities
prescribed by a statute has been rendered impossible by
circumstances over which the persons interested had no control,
like the act of God, the circumstances will be taken as a valid
excuse. Where the act of God prevents the compliance of the
words of a statute, the statutory provision is not denuded of its
mandatory character because of supervening impossibility
caused by the act of God. (See Broom’s Legal Maxims 10th Edn.
At pp. 162-163 and Craies on Statute Law 6th Edn. at p. 268).”

317. In Standard Chartered Bank v. Directorate of Enforcement 208, the

legal maxim “impotentia excusat legem” has been applied to hold that

law does not compel a man to do that which cannot possibly be

performed. Though the maxim with respect to the impossibility of

207 (1974) 2 SCC 33
208 (2005) 4 SCC 530
273

performance may not be strictly applicable, however, the effect of the

court’s order, for the time being, made the Authorities disable to fulfill

the obligation. Thus, when they were incapable of performing, they

have to be permitted to perform at the first available opportunity, which

is the time prescribed by the statute for them, i.e., the total period of 5

years excluding the period of the interim order.

318. The maxim actus curiae neminem gravabit is founded upon the

principle due to court proceedings or acts of court, no party should

suffer. If any interim orders are made during the pendency of the

litigation, they are subject to the final decision in the matter. In case

the matter is dismissed as without merit, the interim order is

automatically dissolved. In case the matter has been filed without any

merit, the maxim is attracted commodum ex injuria sua nemo habere

debet, that is, convenience cannot accrue to a party from his own wrong.

No person ought to have the advantage of his own wrong. In case

litigation has been filed frivolously or without any basis, iniquitously in

order to delay and by that it is delayed, there is no equity in favour of

such a person. Such cases are required to be decided on merits. In

Mrutunjay Pani and Anr. v. Narmada Bala Sasmal and Anr209, this Court

observed that:

“(5) X x x The same principle is comprised in the latin maxim
commodum ex injuria sua nemo habere debet, that is,
convenience cannot accrue to a party from his own wrong. To put
it in other words, no one can be allowed to benefit from his own
wrongful act. …”

209 AIR 1961 SC 1353
274

319. It is not the policy of law that untenable claims should get

fructified due to delay. Similarly, sufferance of a person who abides by

law is not permissible. The Act of 2013 does not confer the benefit on

unscrupulous litigants, but it aims at and frowns upon the lethargy of

the officials to complete the requisites within five years.

320. The States urge that by refusal to accept compensation, one

cannot take advantage of own conduct. This idea is explained in

Maxwell on the Interpretation of Statutes (12th Edition) by P. St. J.

Langon, wherein following observations have been made:

“On the principles of avoiding injustice and absurdity, any
construction will, if possible, be rejected (unless the policy of the
Act requires it) if it would enable a person by his own act to impair
an obligation which he has undertaken, or otherwise to profit by
his own wrong. He may not take advantage of his own wrong.
He may not plead in his own interest a self created necessity”
(Kish v. Taylor, (1911) 1 K.B. 625, per Fletcher Moulton I.J. at
page 634).

Thus an Act which authorised justices to discharge apprentice
from his indenture in certain circumstances “on the master’s
appearance” before them justified a discharge in his wilful
absence. It would have been unreasonable to have construed the
Act in such a way that the master derived an advantage from his
own obstinacy (Ditton’s Case (1701) 2 Salk. 490)”

321. In G.T.C. Industries Ltd. v. Union of India210, it was observed that

while vacating stay, it is the court’s duty to account for the period of

delay and to settle equities. It is not the gain which can be conferred. In

Jaipur Municipal Corporation v. C. L. Mishra211, it has been observed that

interim order merges in the final order, and it cannot have an

independent existence, cannot survive beyond final decision. In Ram

210
(1998) 3 SCC 376
211 (2005) 8 SCC 423
275

Krishna Verma v. the State of U.P212, reliance was placed on Grindlays

Bank Ltd. v. C.I.T213. It was held that no one could be permitted to suffer

from the act of the court and in case an interim order has been passed

and ultimately petition is found to be without merit and is dismissed,

the interest of justice requires that any undeserved or unfair advantage

gained by a party invoking the jurisdiction of the Court must be

neutralized.

322. In Mahadeo Savlaram Shelke v. Pune Municipal Corporation 214, it

has been observed that the Court can under its inherent jurisdiction ex

debito justitiae has a duty to mitigate the damage suffered by the

defendants by the act of the court. Such action is necessary to put a

check on abuse of process of the court. In Amarjeet Singh and Ors. v.

Devi Ratan and Ors215, and Ram Krishna Verma (supra), it was observed

that no person can suffer from the act of court and unfair advantage of

the interim order must be neutralized. In Amarjeet Singh (supra), this

Court observed:

“17. No litigant can derive any benefit from mere pendency of the
case in a court of law, as the interim order always merges in the
final order to be passed in the case, and if the writ petition is
ultimately dismissed, the interim order stands nullified
automatically. A party cannot be allowed to take any benefit of
its own wrongs by getting an interim order and thereafter blame
the court. The fact that the writ is found, ultimately, devoid of any
merit, shows that a frivolous writ petition had been filed. The
maxim actus curiae neminem gravabit, which means that the act
of the court shall prejudice no one, becomes applicable in such a
case. In such a fact situation, the court is under an obligation to

212 (1992) 2 SCC 620
213 (1980) 2 SCC 191
214 (1995) 3 SCC 33
215
(2010) 1 SCC 417
276

undo the wrong done to a party by the act of the court. Thus, any
undeserved or unfair advantage gained by a party invoking the
jurisdiction of the court must be neutralized, as the institution of
litigation cannot be permitted to confer any advantage on a suitor
from delayed action by the act of the court. (Vide Shiv Shankar v.
U.P. SRTC
, 1995 Supp (2) SCC 726, GTC Industries Ltd. v. Union
of India
, (1998) 3 SCC 376 and Jaipur Municipal Corpn. v. C.L.
Mishra
, (2005) 8 SCC 423.)

18. In Ram Krishna Verma v. the State of U.P. (1992) 2 SCC 620,
this Court examined a similar issue while placing reliance upon
its earlier judgment in Grindlays Bank Ltd. v. ITO, (1980) 2 SCC
191 and held that no person can suffer from the act of the court and
in case an interim order has been passed, and the petitioner
takes advantage thereof, and ultimately the petition is found to
be without any merit and is dismissed, the interest of justice
requires that any undeserved or unfair advantage gained by a
party invoking the jurisdiction of the court must be neutralized.”

323. In Karnataka Rare Earth and Anr. v. Senior Geologist, Department

of Mines & Geology216, this Court observed that maxim actus curiae

neminem gravabit requires that the party should be placed in the same

position but for the court’s order which is ultimately found to be not

sustainable which has resulted in one party gaining advantage which

otherwise would not have earned and the other party has suffered but

for the orders of the court. The successful party can demand the delivery

of benefit earned by the other party, or make restitution for what it has

lost. This Court observed:

“10. In x x x x the doctrine of actus curiae neminem gravabit and
held that the doctrine was not confined in its application only to
such acts of the court which were erroneous; the doctrine is
applicable to all such acts as to which it can be held that the court
would not have so acted had it been correctly apprised of the
facts and the law. It is the principle of restitution that is attracted.

When on account of an act of the party, persuading the court to
pass an order, which at the end is held as not sustainable, has
resulted in one party gaining advantage which it would not have
otherwise earned, or the other party has suffered an
impoverishment which it would not have suffered, but for the
order of the court and the act of such party, then the successful
party finally held entitled to a relief, assessable in terms of money

216 (2004) 2 SCC 783
277

at the end of the litigation, is entitled to be compensated in the
same manner in which the parties would have been if the interim
order of the court would not have been passed. The successful
party can demand: (a) the delivery of benefit earned by the
opposite party under the interim order of the court, or (b) to make
restitution for what it has lost.

11. In the facts of this case, in spite of the judgment of the High
Court, if the appellants would not have persuaded this Court to
pass the interim orders, they would not have been entitled to
operate the mining leases and to raise and remove and dispose
of the minerals extracted. But for the interim orders passed by
this Court, there is no difference between the appellants and any
person raising, without any lawful authority, any mineral from
any land, attracting applicability of sub-section (5) of Section 21.
As the appellants have lost from the Court, they cannot be
allowed to retain the benefit earned by them under the interim
orders of the Court. The High Court has rightly held the
appellants liable to be placed in the same position in which they
would have been if this Court would not have protected them by
issuing interim orders. All that the State Government is
demanding from the appellants is the price of the minor minerals.
Rent, royalty or tax has already been recovered by the State
Government and, therefore, there is no demand under that head.
No penal proceedings, much less any criminal proceedings, have
been initiated against the appellants. It is absolutely incorrect to
contend that the appellants are being asked to pay any penalty
or are being subjected to any penal action. It is not the case of the
appellants that they are being asked to pay the price more than
what they have realized from the exports or that the price
appointed by the respondent State is in any manner arbitrary or
unreasonable.”

(emphasis supplied)

324. In A.R. Antulay (supra), this Court observed that it is a settled

principle that an act of the court shall prejudice no man. This maxim

actus curiae neminem gravabit is founded upon justice and good sense

and affords a safe and certain guide for the administration of the law.

No man can be denied his rights. In India, a delay occurs due to

procedural wrangles. In A.R. Antulay (supra), this Court observed:

“102. This being the apex court, no litigant has any opportunity
of approaching any higher forum to question its decisions. Lord
Buckmaster in Montreal Street Railway Co. v. Normadin, 1917 AC
170 (sic) stated:

“All rules of court are nothing but provisions intended to secure
the proper administration of justice. It is, therefore, essential that
278

they should be made to serve and be subordinate to that
purpose.”

This Court in State of Gujarat v. Ramprakash P. Puri, (1970) 2
SCR 875, reiterated the position by saying: [SCC p. 159: SCC (Cri)
p. 31, para 8]
“Procedure has been described to be a handmaid and not a
mistress of law, intended to subserve and facilitate the cause of
justice and not to govern or obstruct it. Like all rules of procedure,
this rule demands a construction which would promote this
cause.”
Once judicial satisfaction is reached that the direction was not
open to be made and it is accepted as a mistake of the court, it is
not only appropriate but also the duty of the court to rectify the
mistake by exercising inherent powers. Judicial opinion heavily
leans in favour of this view that a mistake of the court can be
corrected by the court itself without any fetters. This is on
principle, as indicated in (Alexander) Rodger case (1869-71) LR 3
PC 465. I am of the view that in the present situation, the court’s
inherent powers can be exercised to remedy the mistake.
Mahajan., J. speaking for a Four Judge Bench in Keshardeo
Chamria v. Radha Kissen Chamria
, 1953 SCR 136 at Page 153
stated:

“The judge had jurisdiction to correct his own error without
entering into a discussion of the grounds taken by the decree-
holder or the objections raised by the judgment-debtors.”

325. In Superintendent of Taxes v. Onkarmal Nathmal Trust 217, this

Court considered the conduct of the State Government in not

questioning the interim order at any stage in seeking variation or

modification of the order of injunction. It was held that the State could

not take advantage of its own wrong and lack of diligence and could not

contend it was impossible to issue notice within the purview of Section

7(2) of the new Act. The decision is distinguishable and turns on its own

facts. Though the act is possible to be performed but not as per the

public policy which frowns upon violation of the court’s interim order.

217 (1976) 1 SCC 766
279

The decision cannot be applied, particularly in view of the provisions

contained in Section 24(2), and on facts, it has no application.

326. Reliance was placed on Neeraj Kumar Sainy v. the State of U.P.218.

There, this Court observed that no one should suffer any prejudice

because of the act of the court; the legal maxim cannot operate in a

vacuum. It has to get the sustenance from the facts. As the appellants

resigned to their fate and woke up to have control over the events

forgetting that the law does not assist the non-vigilant. One cannot

indulge in the luxury of lethargy, possibly nurturing the feeling that

forgetting is a virtue. If such is the conduct, it is not permissible to take

shelter under the maxim actus curiae neminem gravabit. There is no

dispute with the aforesaid principle. Party has to be vigilant about the

right, but the ratio cannot be applied. In the opinion, the ratio in the

decision cannot be applied for the purpose of interpretation of Section

24(2).

327. There can be no doubt that when parties are before court, the final

decision has to prevail, and they succeed or fail based on the merits of

their relative cases. Neither can be permitted to take shelter under the

cover of court’s order to put the other party in a disadvantageous

position. If one has enjoyed under the court’s cover, that period cannot

be included towards inaction of the authorities to take requisite steps

218
(2017) 14 SCC 136
280

under Section 24. The State authorities would have acted but for the

court’s order. In fact, the occasion for the petitioners to approach the court

in those cases, was that the State or acquiring bodies were taking their

properties. Ultimately case had to stand on its merit in the challenge to

the acquisition or compensation, and no right or advantage could

therefore be conferred (or accrue) under Section 24(2) in such

situations.

328. The argument of the landowners was that on the one hand, the

court should not discern a casus omissus and in effect, the absence of

provision to exclude the time during which an interim order operated,

means that Parliament intended such omission. The maxim ‘expressio

unius est exclusio alterious’ means that express mention of one or more

persons or things of a particular class may be regarded as by

implication excluding all others of that class. The maxim, however, does

not apply when the provisions of the legislation in question show that

the exclusion could not have been intended. In Colquhoun v. Brooks219,

the House of Lords opined that:

“The maxim ‘expressio unius est exclusio alterious’ has been
pressed upon us. I agree with what is said in the court below by
Wills, J. about this maxim. It is often a valuable servant, but a
dangerous master to follow in the construction of statutes or
documents. The ‘exclusio’ is often the result of inadvertence or
accident, and the maxim ought not to be applied when its
application, having regard to the subject matter to which it is to
be applied, leads to inconsistency or injustice.”

219 (1889) 21 QBD 52
281

Lewis Sutherland’s Statutory Construction (2nd ed.), Section 491,

applies the rule as follows:

“Expressio unius est exclusio alterious – The maxim, like all rules
of construction, is applicable under certain conditions to
determine the intent of the lawmaker when it is not otherwise
manifest. Under these conditions, it leads to safe and satisfactory
conclusions; but otherwise the expression of one or more things
is not a negation or exclusion of other things. What is expressed
is exclusive only when it is creative, or in derogation of some
existing law, or of some provisions in the particular act. The
maxim is applicable to a statutory provision which grants
originally a power or right.”

329. In a case before the United States Court of Customs and Patent

Appeals decided on 5th November, 1934, Yardley & Co. Ltd. V. United

States, the court considered the question of classification and

assessment with duty of certain merchandise consisting of empty glass

jars and lids, and whether these could be considered as ‘entireties’ that

would be dutiable under paragraph 33 of the Tariff Act of 1930. The

court in that case relied on the observations in Colquhoun v. Brooks

(supra) and held that the glass jars with their lids would be dutiable as

entireties, despite there not being an express legislative provision to that

effect. It was held that the rule of expressio unius est exclusio alterious

would not be applicable in the context of the legislative provision in the

Tariff Acts of 1909, 1913 and 1922, as the relevant provision therein (in

the 1930 Act) was merely declaratory in nature and not in derogation of

existing law. In Assistant Collector of Central Excise v. National Tobacco
282

Company of India Ltd.220, this Court held that the rule of expressio unius

est exclusio alterious:

“is subservient to the basic principle that courts must endeavour
to ascertain the legislative intent and purpose, and then adopt a
rule of construction which effectuates rather than one that may
defeat these.”

330. In Karnataka State v. Union of India221, the Court observed that:

“Before the principle can be applied at all the Court must find an
express mode of doing something that is provided in a statute,
which, by its necessary implication, could exclude the doing of
that very thing and not something else in some other way. Far
from this being the case here, as the discussion above has
shown, the Constitution makers intended to cover the making of
provisions by Parliament for inquiries for various objects which
may be matters of public importance without any indications of
any other limits except that they must relate to subjects found in
the Lists. I have also indicated why a provision like Section 3 of
the Act would, in any case, fall under entry 97 of List I of Schedule
VII read with Articles 248 and 356 of the Constitution even if all
subjects to which it may relate are not found specified in the lists.
Thus, there is express provision in our Constitution to cover an
enactment such as Section 3 of the Act, hence, there is no room
whatsoever for applying the “Expressio Unius” rule to exclude
what falls within an expressly provided legislative entry. That
maxim has been aptly described as a “useful servant but a
dangerous master ” (per Lopes L.J. in Colquhoun v. Brooks [1888]
21 Q.B.D. The limitations or conditions under which this principle
of construction operates are frequently overlooked by those who
attempt to apply it.

To advance the balder and broader proposition that what is not
specifically mentioned in the Constitution must be deemed to be
deliberately excluded from its purview, so that nothing short of a
Constitutional amendment could authorise legislation upon it, is
really to invent a “Cams Omissus” so as to apply the rule that,
where there is such a gap in the law, the Court cannot fill it. The
rule, however, is equally clear that the Court cannot so interpret
a statute as “to produce a casus omissus” where there is really
none (see: The Mersey Docks and Harbour Board v. Penderson
Brothers [1888] 13 A.C. 595). If our Constitution itself provides for
legislation to fill what is sought to be construed as a lacuna, how
can legislation seeking to do this be held to be void because it
performs its intended function by an exercise of an expressly
conferred legislative power? In declaring the purpose of the
provisions so made and the authority for making it, Courts do not
supply an omission or fill up a gap at all. It is Parliament which
can do so and has done it. To hold that parliament is incompetent

220 (1972) 2 SCC 560
221 (1977) 4 SCC 608
283

to do this is to substitute an indefensible theory or a figment of
one’s imagination- that the Constitution stands in the way
somehow-for that which only a clear Constitutional bar could
achieve.”

In Mary Angel (supra) this Court observed as follows:

“…The rule of interpretation on the basis of the maxim “expressio
unius est exclusio alterius”, … has been considered in the
decision rendered by the Queen’s Bench in the case of Dean v.
Wiesengrund (1955) 2 QBD 120. The Court considered the said
maxim and held that after all it is more than an aid to construction
and has little, if any, weight where it is possible to account for
the “exclusio unius” on grounds other than intention to effect the
“exclusio alterius”. Thereafter, the Court referred to the following
passage from the case of Colquhoon v. Brooks (1887) 19 QBD 400
wherein the Court called for its approval – “The maxim ‘expressio
unius est exclusio alterius’ has been pressed upon us. I agree
with what is said in the Court below by Wills J, about this maxim.
It is often a valuable servant, but a dangerous master to follow in
the construction of statutes of documents. The exclusio is often
the result of inadvertence or accident, and the maxim ought not
to be applied, when its application having regard to the subject
matter to which it is to be applied, leads to inconsistency or
injustice. In my opinion, the application of the maxim here would
lead to inconsistency and injustice, and would make Section
14(1)
of the Act of 1920 uncertain and capricious in its operation.”

The aforesaid maxim was referred to by this Court in the case of
Asst. Collector, Central Excise v. National Tobacco Co. 1978 (2)
ELT 416 (SC), the Court in that case considered the question
whether there was or was not an implied power to hold an inquiry
in the circumstances of the case in view of the provisions of the
Section 4 of the Central Excise Act read with Rule 10(A) of the
Central Excise Rules and referred to the aforesaid passage “the
maxim” is often a valuable servant, but a dangerous master …’
and held that the rule is subservient to the basic principle that
Courts must endeavour to ascertain the legislative intent and
purpose, and then adopt a rule of construction which effectuates
rather than one that may defeat these. Moreover, the rule of
prohibition by necessary implication could be applied only where
a specified procedure is laid down for the performance of a duty.
In the case of Parbhani Transport Co-op Society Ltd. v. R.T.A.
Aurangabad [1960] 3 SCR 177, this Court observed that the
maxim ‘expressio unius est exclusio alterius’ is a maxim for
ascertaining the intention of the legislature and where the
statutory language is plain and the meaning clear, there is no
scope for applying. Further, in Harish Chander Vajpai v. Triloki
Singh
, [1957] 1 SCR 370, the Court referred to the following
passage from Maxwell on Interpretation of Statutes, 10th Edition,
pages 316-317:

“Provisions sometimes found in statutes, enacting
imperfectly or for particular cases only that which was
already and more widely the law, have occasionally
furnished ground for the contention that an intention to alter
284

the general law was to be inferred from the partial or limited
enactment, resting on the maxim expressio unius, exclusio
alterius. But that maxim is inapplicable in such cases. The
only inference which a court can draw from such
superfluous provisions (which generally find a place in Acts
to meet unfounded objections and idle doubts), is that the
Legislature was either ignorant or unmindful of the real
state of the law, or that it acted under the influence of
excessive caution.

Lastly, we would state that in the case of Pampathy v. State of
Mysore (supra), the Court has specifically observed that no
legislative enactment dealing with the procedure can provide for
all cases and that Court should have inherent powers apart from
the express provisions of law which are necessary for the proper
discharge of duties.”

331. For all these reasons, it is held that the omission to expressly

enact a provision, that excludes the period during which any interim

order was operative, preventing the State from taking possession of

acquired land, or from giving effect to the award, in a particular case or

cases, cannot result in the inclusion of such period or periods for the

purpose of reckoning the period of 5 years. Also, merely because

timelines are indicated, with the consequence of lapsing, under Sections

19 and 69 of the Act of 2013, per se does not mean that omission to

factor such time (of subsistence of interim orders) has any special

legislative intent. This Court notices, in this context, that even under

the new Act (nor was it so under the 1894 Act) no provision has been

enacted, for lapse of the entire acquisition, for non-payment of

compensation within a specified time; nor has any such provision been

made regarding possession. Furthermore, non-compliance with

payment and deposit provisions (under Section 77) only results in

higher interest pay-outs under Section 80. The omission to provide for

exclusion of time during which interim orders subsisted, while
285

determining whether or not acquisitions lapsed, in the present case, is

a clear result of inadvertence or accident, having regard to the subject

matter, refusal to apply the principle underlying the maxim actus curae

neminem gravabit would result in injustice.

In Re: Principle of Restitution:

332. The principle of restitution is founded on the ideal of doing

complete justice at the end of litigation, and parties have to be placed

in the same position but for the litigation and interim order, if any,

passed in the matter. In South Eastern Coalfields Ltd. v. State of M.P. &

Ors.222, it was held that no party could take advantage of litigation. It

has to disgorge the advantage gained due to delay in case lis is lost. The

interim order passed by the court merges into a final decision. The

validity of an interim order, passed in favour of a party, stands reversed

in the event of a final order going against the party successful at the

interim stage. Section 144 of the Code of Civil Procedure is not the

fountain source of restitution. It is rather a statutory recognition of the

rule of justice, equity and fair play. The court has inherent jurisdiction

to order restitution so as to do complete justice. This is also on the

principle that a wrong order should not be perpetuated by keeping it

alive and respecting it. In exercise of such power, the courts have

applied the principle of restitution to myriad situations not falling

within the terms of section 144 CPC. What attracts applicability of

222 (2003) 8 SCC 648
286

restitution is not the act of the court being wrongful or mistake or an

error committed by the court; the test is whether, on account of an act

of the party persuading the court to pass an order held at the end as

not sustainable, resulting in one party gaining an advantage which it

would not have otherwise earned, or the other party having suffered an

impoverishment, restitution has to be made. Litigation cannot be

permitted to be a productive industry. Litigation cannot be reduced to

gaming where there is an element of chance in every case. If the concept

of restitution is excluded from application to interim orders, then the

litigant would stand to gain by swallowing the benefits yielding out of

the interim order. This Court observed in South Eastern Coal Field

(supra) thus:

“26. In our opinion, the principle of restitution takes care of this
submission. The word “restitution” in its etymological sense
means restoring to a party on the modification, variation or
reversal of a decree or order, what has been lost to him in
execution of decree or order of the court or in direct consequence
of a decree or order (see Zafar Khan v. Board of Revenue, U.P.,
1984 Supp SCC 505) In law, the term “restitution” is used in three
senses: (i) return or restoration of some specific thing to its rightful
owner or status; (ii) compensation for benefits derived from a
wrong done to another; and (iii) compensation or reparation for
the loss caused to another. (See Black’s Law Dictionary, 7th Edn.,
p. 1315). The Law of Contracts by John D. Calamari & Joseph M.
Perillo has been quoted by Black to say that “restitution” is an
ambiguous term, sometimes referring to the disgorging of
something which has been taken and at times referring to
compensation for the injury done:

“Often, the result under either meaning of the term would be
the same. … Unjust impoverishment, as well as unjust
enrichment, is a ground for restitution. If the defendant is
guilty of a non-tortious misrepresentation, the measure of
recovery is not rigid but, as in other cases of restitution,
such factors as relative fault, the agreed-upon risks, and the
fairness of alternative risk allocations not agreed upon and
not attributable to the fault of either party need to be
weighed.”

287

The principle of restitution has been statutorily recognized in
Section 144 of the Code of Civil Procedure, 1908. Section 144 CPC
speaks not only of a decree being varied, reversed, set aside or
modified but also includes an order on a par with a decree. The
scope of the provision is wide enough so as to include therein
almost all the kinds of variation, reversal, setting aside or
modification of a decree or order. The interim order passed by the
court merges into a final decision. The validity of an interim order,
passed in favor of a party, stands reversed in the event of a final
decision going against the party successful at the interim stage.
xxx

27. x x x

This is also on the principle that a wrong order should not be
perpetuated by keeping it alive and respecting it (A. Arunagiri
Nadar v. S.P. Rathinasami
, (1971) 1 MLJ 220). In the exercise of
such inherent power, the courts have applied the principles of
restitution to myriad situations not strictly falling within the terms
of Section 144.

28. That no one shall suffer by an act of the court is not a rule
confined to an erroneous act of the court; the “act of the court”
embraces within its sweep all such acts as to which the court
may form an opinion in any legal proceedings that the court
would not have so acted had it been correctly apprised of the
facts and the law. x x x the concept of restitution is excluded from
application to interim orders, then the litigant would stand to gain
by swallowing the benefits yielding out of the interim order even
though the battle has been lost at the end. This cannot be
countenanced. We are, therefore, of the opinion that the
successful party finally held entitled to a relief assessable in
terms of money at the end of the litigation, is entitled to be
compensated by award of interest at a suitable reasonable rate
for the period for which the interim order of the court withholding
the release of money had remained in operation.”
(emphasis supplied)

333. In State of Gujarat & Ors. v. Essar Oil Ltd. & Anr223, it was observed

that the principle of restitution is a remedy against unjust enrichment

or unjust benefit. The Court observed:

“61. The concept of restitution is virtually a common law
principle, and it is a remedy against unjust enrichment or unjust
benefit. The core of the concept lies in the conscience of the court,
which prevents a party from retaining money or some benefit
derived from another, which it has received by way of an
erroneous decree of the court. Such remedy in English Law is
generally different from a remedy in contract or in tort and falls

223 (2012) 3 SCC 522
288

within the third category of common law remedy, which is called
quasi-contract or restitution.

62. If we analyze the concept of restitution, one thing emerges
clearly that the obligation to restitute lies on the person or the
authority that has received unjust enrichment or unjust benefit
(see Halsbury’s Laws of England, 4th Edn., Vol. 9, p. 434).”

334. In A. Shanmugam v. Ariya Kshatriya Rajakula Vamsathu

Madalaya Nandhavana Paripalanai Sangam 224, it was stated that

restitutionary jurisdiction is inherent in every court, to neutralize the

advantage of litigation. A person on the right side of the law should not

be deprived, on account of the effects of litigation; the wrongful gain of

frivolous litigation has to be eliminated if the faith of people in the

judiciary has to be sustained. The Court observed:

“37. This Court, in another important case in Indian Council for
Enviro-Legal Action v. Union of India (of which one of us, Dr.
Bhandari, J. was the author of the judgment) had an occasion to
deal with the concept of restitution. The relevant paragraphs of
that judgment dealing with relevant judgments are reproduced
hereunder: (SCC pp. 238-41 & 243-46, paras 170-76, 183-88 &
190-93)
“170. x x x

171. In Ram Krishna Verma v. the State of U.P. this Court
observed as under: (SCC p. 630, para 16)
‘16. The 50 operators, including the appellants/private
operators, have been running their stage carriages by blatant
abuse of the process of the court by delaying the hearing as
directed in Jeewan Nath Wahal’s case and the High Court earlier
thereto. As a fact, on the expiry of the initial period of the grant
after 29-9-1959, they lost the right to obtain renewal or to ply
their vehicles, as this Court declared the scheme to be operative.

However, by sheer abuse of the process of law, they are
continuing to ply their vehicles pending the hearing of the
objections. This Court in Grindlays Bank Ltd. v. ITO held that the
High Court, while exercising its power under Article 226, the
interest of justice requires that any undeserved or unfair
advantage gained by a party invoking the jurisdiction of the court
must be neutralized. It was further held that the institution of the
litigation by it should not be permitted to confer an unfair
advantage on the party responsible for it. In the light of that law

224 (2012) 6 SCC 430
289

and in view of the power under Article 142(1) of the Constitution
this Court, while exercising its jurisdiction would do complete
justice and neutralize the unfair advantage gained by the 50
operators including the appellants in dragging the litigation to run
the stage carriages on the approved route or area or portion
thereof and forfeited their right to hearing of the objections filed
by them to the draft scheme dated 26-2-1959.’

172. This Court in Kavita Trehan v. Balsara Hygiene Products
Ltd
. observed as under: (SCC p. 391, para 22)
‘22. The jurisdiction to make restitution is inherent in every
court and will be exercised whenever the justice of the case
demands. It will be exercised under inherent powers, where the
case did not strictly fall within the ambit of Section 144. Section
144
opens with the words:

“144. Application for restitution.—(1) Where and insofar as a
decree or an order is varied or reversed in any appeal, revision or
other proceeding or is set aside or modified in any suit instituted
for the purpose ….”
The instant case may not strictly fall within the terms of Section
144
, but the aggrieved party in such a case can appeal to the
larger and general powers of restitution inherent in every court.’

173. This Court in Marshall Sons & Co. (I) Ltd. v. Sahi
Oretrans (P) Ltd
. observed as under: (SCC pp. 326-27, para 4)
‘4. From the narration of the facts, though it appears to us,
prima facie, that a decree in favor of the appellant is not being
executed for some reason or the other, we do not think it proper
at this stage to direct the respondent to deliver the possession to
the appellant since the suit filed by the respondent is still
pending. It is true that proceedings are dragged on for a long time
on one count or the other and, on occasion, become highly
technical accompanied by unending prolixity at every stage,
providing a legal trap to the unwary. Because of the delay,
unscrupulous parties to the proceedings take undue advantage,
and the person who is in wrongful possession draws delight in
delay in disposal of the cases by taking undue advantage of
procedural complications. It is also a known fact that after
obtaining a decree for possession of the immovable property, its
execution takes a long time. In such a situation, for protecting the
interest of the judgment-creditor, it is necessary to pass
appropriate orders so that reasonable mesne profit which may be
equivalent to the market rent is paid by a person who is holding
over the property. Inappropriate cases, the court may appoint a
Receiver and direct the person who is holding over the property
to act as an agent of the [Receiver with a direction to deposit the
royalty amount fixed by the] Receiver or pass such other order
which may meet the interest of justice. This may prevent further
injury to the plaintiff in whose favor the decree is passed and to
protect the property, including further alienation.’

174. In Padmawati v. Harijan Sewak Sangh decided by the
Delhi High Court on 6-11-2008, the Court held as under: (DLT p.
413, para 6)
‘6. The case at hand shows that frivolous defenses and
frivolous litigation is a calculated venture involving no risks
situation. You have only to engage professionals to prolong the
290

litigation so as to deprive the rights of a person and enjoy the
fruits of illegalities. I consider that in such cases where the court
finds that using the courts as a tool, a litigant has perpetuated
illegalities or has perpetuated an illegal possession, the court
must impose costs on such litigants which should be equal to the
benefits derived by the litigant and harm and deprivation
suffered by the rightful person so as to check the frivolous
litigation and prevent the people from reaping a rich harvest of
illegal acts through the courts. One of the aims of every judicial
system has to be to discourage unjust enrichment using courts as
a tool. The costs imposed by the courts must in all cases should
be the real costs equal to deprivation suffered by the rightful
person.’
We approve the findings of the High Court of Delhi in the case
mentioned above.

175. The High Court also stated: (Padmawati case, DLT pp.
414-15, para 9)
‘9. Before parting with this case, we consider it necessary to
observe that one of the [main] reasons for overflowing of court
dockets is the frivolous litigation in which the courts are engaged
by the litigants and which is dragged on for as long as possible.
Even if these litigants ultimately lose the lis, they become the real
victors and have the last laugh. This class of people who
perpetuate illegal acts by obtaining stays and injunctions from
the courts must be made to pay the sufferer not only the entire
illegal gains made by them as costs to the person deprived of his
right but also must be burdened with exemplary costs. The faith
of people in judiciary can only be sustained if the persons on the
right side of the law do not feel that even if they keep fighting for
justice in the court and ultimately win, they would turn out to be
a fool since winning a case after 20 or 30 years would make the
wrongdoer as real gainer, who had reaped the benefits for all
those years. Thus, it becomes the duty of the courts to see that
such wrongdoers are discouraged at every step, and even if they
succeed in prolonging the litigation due to their money power,
ultimately, they must suffer the costs of all these years’ long
litigation. Despite the settled legal positions, the obvious
wrongdoers, use one after another tier of judicial review
mechanism as a gamble, knowing fully well that dice is always
loaded in their favour since even if they lose, the time gained is
the real gain. This situation must be redeemed by the courts.’

176. Against this judgment of the Delhi High Court, Special
Leave to Appeal (Civil) No. 29197 of 2008 was preferred to this
Court. The Court passed the following order: (SCC p. 460, para 1)
‘1. We have heard the learned counsel appearing for the
parties. We find no ground to interfere with the well-considered
judgment passed by the High Court. The special leave petition is,
accordingly, dismissed.’
* * *

183. In Marshall Sons & Co. (I) Ltd. v. Sahi Oretrans (P) Ltd.
this Court in para 4 of the judgment observed as under: (SCC pp.
326-27)
291

‘4. … It is true that proceedings are dragged on for a long time
on one count or the other and, on occasion, become highly
technical accompanied by unending prolixity at every stage,
providing a legal trap to the unwary. Because of the delay,
unscrupulous parties to the proceedings take undue advantage,
and a person who is in wrongful possession draws delight in
delay in disposal of the cases by taking undue advantage of
procedural complications. It is also a known fact that after
obtaining a decree for possession of immovable property, its
execution takes a long time. In such a situation, for protecting the
interest of the judgment-creditor, it is necessary to pass
appropriate orders so that reasonable mesne profit which may be
equivalent to the market rent is paid by a person who is holding
over the property. In appropriate cases, the court may appoint a
Receiver and direct the person who is holding over the property
to act as an agent of the Receiver with a direction to deposit the
royalty amount fixed by the Receiver or pass such other order
which may meet the interest of justice. This may prevent further
injury to the plaintiff in whose favour the decree is passed and to
protect the property, including further alienation.’

184. In Ouseph Mathai v. M. Abdul Khadir, this Court
reiterated the legal position that: (SCC p. 328, para 13)
‘13. … [the] stay granted by the court does not confer a right upon
a party and it is granted always subject to the final result of the
matter in the court and at the risks and costs of the party
obtaining the stay. After the dismissal of the lis, the party
concerned is relegated to the position which existed prior to the
filing of the petition in the court which had granted the stay. Grant
of stay does not automatically amount to extension of a statutory
protection.”

There are other decisions as well, which iterate and apply the

same principle.225

335. A wrong-doer or in the present context, a litigant who takes his

chances, cannot be permitted to gain by delaying tactics. It is the duty

of the judicial system to discourage undue enrichment or drawing of

undue advantage, by using the court as a tool. In Kalabharati

Advertising v. Hemant Vimalnath Narichania226, it was observed that

225 Indian Council for Enviro-Legal Action v. Union of India, (2011) 8 SCC 161, Grindlays
Bank Ltd. v. CIT, (1980) 2 SCC 191, Ram Krishna Verma v. the State of U.P., (1992) 2 SCC

620. Also Marshall Sons & Co. (I) Ltd. v. Sahi Oretrans (P) Ltd. and Anr., (1999) 2 SCC 325.
226 (2010) 9 SCC 437
292

courts should be careful in neutralizing the effect of consequential

orders passed pursuant to interim orders. Such directions are

necessary to check the rising trend among the litigants to secure reliefs

as an interim measure and avoid adjudication of the case on merits.

Thus, the restitutionary principle recognizes and gives shape to the idea

that advantages secured by a litigant, on account of orders of court, at

his behest, should not be perpetuated; this would encourage the prolific

or serial litigant, to approach courts time and again and defeat rights of

others- including undermining of public purposes underlying

acquisition proceedings. A different approach would mean that, for

instance, where two landowners (sought to be displaced from their lands

by the same notification) are awarded compensation, of whom one

allows the issue to attain finality- and moves on, the other obdurately

seeks to stall the public purpose underlying the acquisition, by filing

one or series of litigation, during the pendency of which interim orders

might inure and bind the parties, the latter would profit and be

rewarded, with the deemed lapse condition under Section 24 (2). Such

a consequence, in the opinion of this Court, was never intended by

Parliament; furthermore, the restitutionary principle requires that the

advantage gained by the litigant should be suitably offset, in favour of

the other party.

293

336. In Krishnaswamy S. Pd. v. Union of India227, it was observed that

an unintentional mistake of the Court, which may prejudice the cause

of any party, must and alone could be rectified. Thus, in our opinion,

the period for which the interim order has operated under Section 24

has to be excluded for counting the period of 5 years under Section 24(2)

for the various reasons mentioned above.

In Re Question no.6: Whether Section 24 revives stale and barred
claim

337. Before proceeding further, in our opinion, Section 24

contemplates pending proceedings and not the concluded ones in which

possession has been taken, and compensation has been paid or

deposited. Section 24 does not provide an arm or tool to question the

legality of proceedings, which have been undertaken under the Act of

1894 and stood concluded before five years or more. It is only in cases

where possession has not been taken, nor compensation is paid, that

there is a lapse. In case possession has been taken, and compensation

has not been deposited with respect to majority of landholdings, the

beneficial provision of the statute provides that all beneficiaries shall be

paid compensation as admissible under the Act of 2013. The

beneficiaries, i.e., landowners contemplated under the proviso to

Section 24(2), are the ones who were so recorded as beneficiaries as on

the date of issuance of notification under Section 4 of the Act of 1894.

227 (2006) 3 SCC 286
294

The provision is not meant to be invoked on the basis of void

transactions, and by the persons who have purchased on the basis of

power of attorney or otherwise, they cannot claim the benefit under

Section 24 as is apparent from proviso to Section 24(2) and the decision

in Shiv Kumar and Ors. v. Union of India and Ors228.

338. This Court is cognizant that Section 24 is used for submitting

various claims, by way of filing applications in the pending proceedings

either before the High Court or this Court. There are cases in which in

the first round of litigation where the challenge to acquisition

proceedings has failed, validity has been upheld, and possession has

been taken after passing of the award. It is contended that drawing of

panchnama was not the permissible mode to take possession, and

actual physical possession remains with such

landowners/purchasers/power of attorney holders as such benefit of

Section 24 should be given to them notwithstanding the fact that they

have withdrawn the compensation also.

339. This Court is cognizant of cases where reference was sought for

enhancement of compensation, money was deposited in the treasury,

enhancement was made, and possession was taken. Yet, acquisitions

have been questioned, and claims are being made under Section 24,

that acquisition has lapsed, as the deposit (of compensation amount) in

228 2019 (13) SCALE 698
295

the treasury was not in accordance with the law, the amount should

have been deposited in reference court. Further, this Court also notes

that there have been cases in which after taking possession, when

development is complete, infrastructure has developed despite which

claims are being made under Section 24, on the ground that either the

possession has not been taken in accordance with law or compensation

has been deposited in the treasury, thus questioning the acquisitions.

The decision in Mahavir and Ors. v. Union of India229 was an instance in

which a claim was made that acquisition was made more than a century

ago, and compensation has not been paid as such acquisition has

lapsed relating to the land of Raisina Hills in New Delhi. The importance

of Raisina Hills is well-known to everybody. The grossest misuse of

Section 24 has been sought to be made, which is intended to confer

benefit. It was never intended to revive such claims and be used in the

manner in which it has been today, where large numbers of acquisitions

and development projects, such as construction of roads, hospitals,

townships, housing projects, etc., are sought to be undone, though

such acquisitions have been settled in several rounds of litigation. In

several matters, the validity has been questioned under the guise as if

the right has been conferred for the first time under the Act of 2013,

claiming that such acquisitions have lapsed. There are also cases in

which the claims for release of land under Section 48 of the Act of 1894

229 (2018) 3 SCC 588
296

have been dismissed. Now, claims are made that as land is open and

landowners/intermediaries/POA holders continue to be in physical

possession, thus, it should be returned to them, as the acquisition has

lapsed under Section 24(2). Before us also arguments have been raised

to grant relief in all such cases by making purposive interpretation of

benevolent provisions. It was urged that this Court is bound to give

relief as Section 24 is retrospective in operation, and the authorities

have not cared to take possession for more than five years or more, and

they have not paid the compensation and deposited it in treasury which

cannot be said to be legal. It is declared that the acquisition has lapsed,

and the land is given back to them. In case any infrastructure is

existing, the State Government should acquire the land afresh after

following the process of Act of 2013. Earlier, injustice was done to

landowners, as observed in various decisions mentioned above. We

should not disturb the decisions of this Court and are bound to follow

the law laid down in Pune Municipal Corporation (supra) and the

principle of stare decisis.

340. By and large, concluded cases are being questioned by way of

invoking the provisions contained in Section 24. In our considered

opinion, the legality of concluded cases cannot be questioned under the

guise of Section 24(2) as it does not envisage or confer any such right

to question the proceedings and the acquisitions have been concluded
297

long back, or in several rounds of litigation as mentioned above, rights

of the parties have been settled.

341. In this context, it is noteworthy that the Urban Land (Ceiling and

Regulation) Act, 1976, was repealed in the year 1999; thereafter, claims

were raised. After repeal, it was claimed that actual physical possession

has not been taken by the State Government as such repeal has the

effect of effacing the proceedings of taking possession, which it was

alleged, was not in accordance with the law. In State of Assam v.

Bhaskar Jyoti Sarma and Ors230, submission was raised by the State of

Assam that physical possession has been taken over by the competent

authority and it was submitted on behalf of landowner that procedure

prescribed under Section 10(5) of the Urban Land (Ceiling and

Regulation) Act, 1976, was not followed. It was before taking possession

under Section 10(6) of the Urban Land (Ceiling and Regulation) Act,

1976, the notification under Section 10(5) was necessary; thus, no

possession can be said to have been taken within the meaning of

Section 3 of the Repeal Act. The question this Court had to consider

was whether actual physical possession was taken over in that case by

the competent authority. The State of Assam submitted that though

possession was taken over in the year 1991, may be unilaterally and

without notice to the landowner. It was urged that mere non-

compliance with Section 10(5) would be insufficient to attract the

230 (2015) 5 SCC 321
298

provisions of Section 3 of the Repeal Act. This Court repelled the

submission of the landowner and held as under:

“15. The High Court has held that the alleged dispossession was
not preceded by any notice under Section 10(5) of the Act.
Assuming that to be the case all that it would mean is that on 7-
12-1991 when the erstwhile owner was dispossessed from the
land in question, he could have made a grievance based on
Section 10(5) and even sought restoration of possession to him no
matter he would upon such restoration once again be liable to be
evicted under Sections 10(5) and 10(6) of the Act upon his failure
to deliver or surrender such possession. In reality therefore
unless there was something that was inherently wrong so as to
affect the very process of taking over such as the identity of the
land or the boundaries thereof or any other circumstance of a
similar nature going to the root of the matter hence requiring an
adjudication, a person who had lost his land by reason of the
same being declared surplus under Section 10(3) would not
consider it worthwhile to agitate the violation of Section 10(5) for
he can well understand that even when the Court may uphold his
contention that the procedure ought to be followed as prescribed,
it may still be not enough for him to retain the land for the
authorities could the very next day dispossess him from the same
by simply serving a notice under Section 10(5). It would, in that
view, be an academic exercise for any owner or person in
possession to find fault with his dispossession on the ground that
no notice under Section 10(5) had been served upon him.

16. The issue can be viewed from another angle also. Assuming
that a person in possession could make a grievance, no matter
without much gain in the ultimate analysis, the question is
whether such grievance could be made long after the alleged
violation of Section 10(5). If actual physical possession was taken
over from the erstwhile landowner on 7-12-1991 as is alleged in
the present case, any grievance based on Section 10(5) ought to
have been made within a reasonable time of such dispossession.
If the owner did not do so, forcibly taking over of possession
would acquire legitimacy by sheer lapse of time. In any such
situation, the owner or the person in possession must be deemed
to have waived his right under Section 10(5) of the Act. Any other
view would, in our opinion, give a license to a litigant to make a
grievance not because he has suffered any real prejudice that
needs to be redressed but only because the fortuitous
circumstance of a Repeal Act tempted him to raise the issue
regarding his dispossession being in violation of the prescribed
procedure.

17. Reliance was placed by the respondents upon the decision of
this Court in Hari Ram case. That decision does not, in our view,
lend much assistance to the respondents. We say so because this
Court was in State of UP v. Hari Ram, (2013) 4 SCC 280
considering whether the word “may” appearing in Section 10(5)
gave to the competent authority the discretion to issue or not to
issue a notice before taking physical possession of the land in
299

question under Section 10(6). The question of whether the breach
of Section 10(5) and possible dispossession without notice would
vitiate the Act of dispossession itself or render it non-est in the
eye of the law did not fall for consideration in that case. In our
opinion, what Section 10(5) prescribes is an ordinary and logical
course of action that ought to be followed before the authorities
decided to use force to dispossess the occupant under Section
10(6)
. In the case at hand, if the appellant’s version regarding
dispossession of the erstwhile owner in December 1991 is
correct, the fact that such dispossession was without a notice
under Section 10(5) will be of no consequence and would not
vitiate or obliterate the Act of taking possession for the purposes
of Section 3 of the Repeal Act. That is because Bhabadeb Sarma,
erstwhile owner, had not made any grievance based on breach
of Section 10(5) at any stage during his lifetime, implying thereby
that he had waived his right to do so.”

This Court held that provisions of the Repeal Act could not be

extended in such a case where possession has been taken without

following the procedure, and the landowner cannot retain the land. This

Court also observed that once possession has been taken over in the

year 1991, any grievance as to non-compliance of Section 10(5) ought

to have been made within a reasonable time of such dispossession. By

sheer lapse of time, the possession would acquire legitimacy. Thus, the

owner or the person in possession must be deemed to have waived his

right under Section 10(5) of the Act. This Court also observed that only

because of the fortuitous circumstance of a Repeal Act, which confers

certain rights, the litigation had tempted the landowner to raise the

issue regarding his dispossession being in violation of the prescribed

procedure. It is clear from the aforesaid decision that such claims

cannot be entertained, and any such dispute raised belatedly was

repelled by this Court.

300

342. Section 24(2) is sought to be used as an umbrella so as to question

the concluded proceedings in which possession has been taken,

development has been made, and compensation has been deposited,

but may be due to refusal, it has not been collected. The challenge to

the acquisition proceedings cannot be made within the parameters of

Section 24(2) once panchnama had been drawn of taking possession,

thereafter re-entry or retaining the possession is that of the trespasser.

The legality of the proceedings cannot be challenged belatedly, and the

right to challenge cannot be revived by virtue of the provisions of Section

24(2). Section 24(2) only contemplates lethargy/inaction of the

authorities to act for five years or more. It is very easy to lay a claim that

physical possession was not taken, with respect to open land. Yet, once

vesting takes place, possession is presumed to be that of the owner, i.e.,

the State Government and land has been transferred to the

beneficiaries, Corporations, Authorities, etc., for developmental

purposes and third-party interests have intervened. Such challenges

cannot be entertained at all under the purview of Section 24(2) as it is

not what is remotely contemplated in Section 24(2) of the Act of 2013.

343. In matters of land acquisition, this Court has frowned upon, and

cautioned courts about delays and held that delay is fatal in questioning

the land acquisition proceedings. In case possession has not been taken

in accordance with law and vesting is not in accordance with Section
301

16, proceedings before courts are to be initiated within reasonable time,

not after the lapse of several decades.

344. In Hari Singh and Ors. v. State of U.P. and Ors231, there was a

delay of two and a half years in questioning the proceedings. This Court

held that the writ petition was liable to be dismissed on the ground of

laches only.

345. In State of T.N. and Ors. v. L. Krishnan & Ors232, this Court held

that petitioners could not raise their claim at a belated stage. Following

observations were made:

“45. There remains the last ground assigned by the High Court
in support of its decision. The High Court has held that the non-
compliance with sub-rules (b) and (c) of Rule 3 of the Rules made
by the Government of Tamil Nadu pursuant to Section 55(1) of the
Land Acquisition Act vitiates the report made under Section 5-A
and consequently the declarations made under Section 6. The
said sub-rules provide that on receipt of objections under Section
5-A
, the Collector shall fix a date of hearing to the objections and
give notice of the same to the objector as well as to the
department. It is open to the department to file a statement by
way of answer to the objections filed by the landowners. The
submission of the writ petitioners was that in a given case, it
might well happen that in the light of the objections submitted by
the landowners, the department concerned may decide to drop
the acquisition. Since no such opportunity was given to the
department concerned herein, it could not file its statement by
way of answer to their objections. This is said to be prejudice. We
do not think it necessary to go into the merits of this submission
on account of the laches on the part of the writ petitioners. As
stated above, the declaration under Section 6 was made
sometime in the year 1978, and the writ petitioners chose to
approach the Court only in the years 1982-83. Had they raised
this objection at the proper time and if it were found to be true
and acceptable, the opportunity could have been given to the
Government to comply with the said requirement. Having kept
quiet for a number of years, the petitioners cannot raise this
contention in writ petitions filed at a stage when the awards were
about to be passed.”

231
AIR 1984 SC 1020
232
(1996) 1 SCC 250
302

346. In Municipal Corporation of Greater Bombay v. Industrial

Development Investment Co. Pvt. Ltd233, this Court observed, with

respect to delay and laches that:

“29. It is thus well-settled law that when there is inordinate
delay in filing the writ petition and when all steps taken in the
acquisition proceedings have become final, the Court should be
loath to quash the notifications. The High Court has, no doubt,
discretionary powers under Article 226 of the Constitution to
quash the notification under Section 4(1) and declaration under
Section 6. But it should be exercised by taking all relevant factors
into pragmatic consideration. When the award was passed, and
possession was taken, the Court should not have exercised its
power to quash the award which is a material factor to be taken
into consideration before exercising power under Article 226. The
fact that no third party rights were created in the case is hardly
a ground for interference. The Division Bench of the High Court
was not right in interfering with the discretion exercised by the
learned Single Judge dismissing the writ petition on the ground
of laches.

***
S.B. MAJUMDAR, J. (concurring)—I have gone through the
judgment prepared by my esteemed learned brother K.
Ramaswamy, J. I respectfully agree with the conclusion to the
effect that Respondents 1 and 2 had missed the bus by adopting
an indolent attitude in not challenging the acquisition proceedings
promptly. Therefore, the result is inevitable that the writ petition
is liable to be dismissed on the ground of gross delay and laches.

35. x x x The acquired land got vested in the State Government
and the Municipal Corporation free from all encumbrances as
enjoined by Section 16 of the Land Acquisition Act. Thus right to
get more compensation got vested in diverse claimants bypassing
the award, as well as the vested right, was created in favor of
the Bombay Municipal Corporation by virtue of the vesting of the
land in the State Government for being handed over to the
Corporation. All these events could not be wished away by
observing that no third party rights were created by them. The
writ petition came to be filed after all these events had taken
place. Such a writ petition was clearly stillborn due to gross delay
and laches. I, therefore, respectfully agree with the conclusion to
which my learned brother Ramaswamy, J., has reached that on
the ground of delay and laches the writ petition is required to be
dismissed, and the appeal has to be allowed on that ground.”
(emphasis supplied)

233 (1996) 11 SCC 501
303

There are several other decisions of this Court, where delay was

held, to disentitle litigants any relief.234

347. In Jasveer Singh and Anr. v. State of Uttar Pradesh & Ors.235 , the

writ petition was filed in which High Court had directed the

redetermination of the compensation. In that case the matter was

remanded by this Court to consider the additional compensation under

Section 23-(1A). Thereafter a submission was raised in the High Court

under Section 24. This Court held that the challenge could not have

been entertained. This Court observed thus:

“2. On 19-12-2005 the appellants filed a writ petition before the
High Court seeking quashing of the acquisition proceedings
which was decided by the High Court on 3-12-2010 directing
redetermination of compensation. The said order was set aside
by this Court on 16-10-2012 in State of U.P. v. Jasveer Singh [Civil
Appeal No
.7535 of 2012, order dated 16-10-2012 (SC)]. It was
observed that:

“After considering the pros and cons, without entering into
serious controversies and making any comment on the merit of
the case, we are of the considered opinion that in view of the
judgment and order of this Court dated 26-11-2010, which was
passed in the presence of the counsel for both the parties, the
High Court ought not to have heard the matter at all. Thus, the
judgment and order impugned before us have lost its sanctity.
Therefore, the same is hereby set aside.

However, in order to meet the ends of justice, we remand the
case to the High Court to hear the writ petition afresh
expeditiously, preferably within a period of six months from the
date of production of the certified copy of the order before the
Hon’ble Chief Justice. The matter may be assigned to any
particular Bench by the Hon’ble Chief Justice for final disposal.
The parties shall be at liberty to raise all factual and legal issues
involved in the case. The High Court is requested to deal with the
relevant issues in detail.

More so, if the respondents are so aggrieved regarding
withdrawal of their appeals, which had been remanded by this

234
In Hindustan Zinc Ltd. v. Bhagwan Singh Bhati and Ors., (2008) 3 SCC 462, there was a
fatal delay of 10 years in the filing of the writ petition. In Govt. of A.P. and Ors. v. Kollutla
Obi Reddy and Ors
., (2005) 6 SCC 493, the writ petition was filed after six years of the land
acquisition. The writ petition was dismissed on the ground of delay and laches.
235 (2017) 6 SCC 787
304

Court for determining the entitlement of interest under Section
23
(1-A) of the Land Acquisition Act, 1984 and an application is
made by the respondent to revive the same, the High Court may
consider and decide the said application in accordance with law.
All the matters shall be heard simultaneously by the same Bench
if the appeals are restored.”

3. Thereafter, the High Court considered the contention of the
appellants that the award in respect of compensation was no
award in the eye of the law and though the possession was taken
long back and railway line had been laid out, the acquisition
proceedings were liable to be set aside, and compensation was
liable to be awarded at present market rate. The High Court
rejected the said plea vide judgment dated 30-5-2014 in Jasvir
Singh v. the State of U.P
., 2014 SCC OnLine All 8465. It was
observed that objection of the appellants against the award had
already been considered and remand by the Supreme Court on
12-9-2005 was only in respect of statutory benefits. For the first
time plea was sought to be raised in the writ petition against
validity of acquisition which was impermissible in view of the law
laid down by this Court in Aflatoon v. Lt. Governor of Delhi, (1975)
4 SCC 285, Swaika Properties (P) Ltd. v. State of Rajasthan,
(2008) 4 SCC 695, Sawaran Lata v. State of Haryana, (2010) 4
SCC 532 and Banda Development Authority v. Moti Lal Agarwal,
(2011) 5 SCC 394. The judgment of this Court in Royal Orchid
Hotels v. G. Jayarama Reddy
, (2011) 10 SCC 608, was
distinguished as that case related to the fraudulent exercise of
power of an eminent domain. The High Court concluded: (Jasvir
Singh case, 2014 SCC OnLine All 8465 (SCC OnLine paras 45-

47)
“45. Taking into consideration the entire facts and
circumstances of the case, we are of the view that the writ petition
is highly barred by laches and deserves to be dismissed on the
ground of laches alone.

46. As has been observed above, the petitioners’ main
grievance is for enhancement of compensation, for which the
petitioner has already filed First Appeal No. 880 of 1993 and First
Appeal No. 401 of 1998 which appeals are being allowed by
order of the date, we see no reason to entertain the writ petition.

47. Although various submissions on merits challenging the
entire acquisition proceedings have been raised by the learned
counsel for the petitioners, we have taken the view that the writ
petition is highly barred by laches, we do not find it necessary to
enter into the submissions raised by the learned counsel for the
petitioners on merits.”

348. In Swaika Properties Pvt. Ltd. and Ors. v. State of Rajasthan and

Ors236, the writ petition was filed after taking possession and award has

236 (2008) 4 SCC 695
305

become final. The writ petition was dismissed on the ground of delay

and laches. In Larsen & Toubro Ltd. v. State of Gujarat and Ors.237, in

the absence of a challenge to the acquisition proceedings within a

reasonable time, the challenge was repelled. Delay was also fatal in

Haryana State Handloom and Handicrafts Corporation Ltd. and Ors. v.

Jain School Society238. The writ petition was filed after two years to

question the declaration under Section 6 and was dismissed on the

ground of delay in Urban Improvement Trust, Udaipur vs. Bheru Lal and

Ors239. A Delay of 5 to 10 years was held to be fatal in questioning the

acquisition proceedings as held in Vishwas Nagar Evacuee Plot

Purchasers Association & Ors. v. Under Secretary, Delhi Admn. & Ors.240

349. There is a plethora of decisions where, owing to delay of 6 months

or more, this Court has repelled the challenge to the acquisition

proceedings. In our opinion, Section 24 does not revive the right to

challenge those proceedings which have been concluded. The legality of

those judgments and orders cannot be reopened or questioned under

the guise of the provisions of Section 24(2). By reason of our reasoning

in respect of that provision (which we have held that under Section 24(2)

that word “or” is to be read as ‘and’ or as ‘nor,’ even if one of the

requirements has been fulfilled, i.e., either possession taken or

237
(1998) 4 SCC 387
238 (2003) 12 SCC 538
239 (2002) 7 SCC 712
240 (1990) 2 SCC 268
306

compensation paid), there is no lapse unless both conditions are

fulfilled, i.e., compensation has not been paid nor has possession been

taken; the legality of the concluded proceedings cannot be questioned.

It is only in the case where steps have not been taken by the Authorities.

The lapse or higher compensation is provided under Section 24(2) and

its proviso under the Act of 2013.

350. In U.P. State Jal Nigam and Anr. v. Jaswant Singh and Anr241, this

Court has observed that if a claimant is aware of the violation of his

rights and does not claim his remedies, such inaction or conduct

tantamounts a waiver of the right. In such cases, the lapse of time and

delay are most material and cannot be ignored by the Court. In

Rabindranath Bose and Ors. v. Union of India and Ors242, the

Constitution Bench of this Court has observed that the Court cannot go

into the stale demands after a lapse of several years. This Court

observed thus:

“32. The learned counsel for the petitioners strongly urges that
the decision of this Court in Tilokchand Motichand case needs
review. But after carefully considering the matter, we are of the
view that no relief should be given to petitioners who, without any
reasonable explanation, approach this Court under Article 32 of
the Constitution after inordinate delay. The highest Court in this
land has been given original jurisdiction to entertain petitions
under Article 32 of the Constitution. It could not have been the
intention that this Court would go into stale demands after a
lapse of years. It is said that Article 32 is itself a guaranteed right.

So it is, but it does not follow from this that it was the intention of
the Constitution-makers that this Court should discard all
principles and grant relief in petitions filed after inordinate
delay.”

241
(2006) 11 SCC 464
242 (1970) 1 SCC 84
307

351. In Dharappa v. Bijapur Coop. Milk Producers Societies Union Ltd243,

this Court observed that if delay has resulted in material evidence

relevant to adjudication being lost or rendered unavailable, would be

fatal. It was held that the time limit of 6 months prescribed under

Section 10(4A) of the I.D. Act, 1947 and should not be interpreted to

revive stale and dead claims, it would not be possible to defend such

claims due to lapse of time and due to material evidence having been

lost or rendered unavailable. The lapse of time results in losing the

remedy and the right as well. The delay would be fatal. It will be illogical

to hold that the amendment to the Act inserting Section 10(4A) should

be interpreted as reviving all stale and dead claims. This Court observed

thus:

“29. This Court while dealing with Sections 10(1)(c) and (d) of the
I.D. Act, has repeatedly held that though the Act does not provide
a period of limitation for raising a dispute under Section 10(1)(c)
or (d), if on account of delay, a dispute has become stale or ceases
to exist, the reference should be rejected. It has also held that
lapse of time results in losing the remedy and the right as well.
The delay would be fatal if it has resulted in material evidence
relevant to adjudication being lost or rendered unavailable (vide
Nedungadi Bank Ltd. v. K.P. Madhavankutty, (2000) 2 SCC 455;
Balbir Singh v. Punjab Roadways, (2001) 1 SCC 133; Asstt.
Executive Engineer v. Shivalinga, (2002) 10 SCC 167 and S.M.
Nilajkar v. Telecom Distt
. Manager, (2003) 4 SCC 27). When
belated claims are considered as stale and non-existing for the
purpose of refusing or rejecting a reference under Section 10(1)(c)
or (d), in spite of no period of limitation is prescribed, it will be
illogical to hold that the amendment to the Act inserting Section
10
(4-A) prescribing a time-limit of six months, should be
interpreted as reviving all stale and dead claims.

***

31. Section 10(4-A) does not, therefore, revive non-existing or
stale or dead claims but only ensures that claims which were life,
by applying the six-month rule in Section 10(4-A) as on the date
when the section came into effect, have a minimum of six months’
time to approach the Labour Court. That is ensured by adding the
words “or the date of commencement of the Industrial Disputes

243 (2007) 9 SCC 109
308

(Karnataka Amendment) Act, 1987, whichever is later” to the
words “within six months from the date of communication to him
of the order of discharge, dismissal, retrenchment or termination.”
In other words, all those who have communicated orders of
termination during a period of six months prior to 7-4-1988 were
deemed to have been communicated such orders of termination
as on 7-4-1988 for the purpose of seeking a remedy. Therefore,
the words “within six months from the date of commencement of
the Industrial Disputes (Karnataka Amendment) Act, 1987,
whichever is later” only enables those who had been
communicated order of termination within six months prior to 7-
4-1988, to apply under Section 10(4-A).”

352. In State of Karnataka v. Laxuman244, this court held that stale

claims should not be entertained even if no time limit is fixed by the

statute. This court observed as follows:

“9. As can be seen, no time for applying to the Court in terms of
sub-section (3) is fixed by the statute. But since the application is
to the Court, though under a special enactment, Article 137, the
residuary article of the Limitation Act, 1963, would be attracted
and the application has to be made within three years of the
application for making a reference or the expiry of 90 days after
the application. The position is settled by the decision of this
Court in Addl. Spl. Land Acquisition Officer v. Thakoredas, (1997)
11 SCC 412. It was held: (SCC p. 414, para 3)
“3. Admittedly, the cause of action for seeking a reference had
arisen on the date of service of the award under Section 12(2) of
the Act. Within 90 days from the date of the service of the notice,
the respondents made the application requesting the Deputy
Commissioner to refer the cases to the civil Court under Section

18. Under the amended sub-section (3)(a) of the Act, the Deputy
Commissioner shall, within 90 days from 1-9-1970, make a
reference under Section 18 to the civil Court, which he failed to
do. Consequently, by operation of subsection 3(b) with the expiry
of the aforestated 90 days, the cause of action had accrued to the
respondents to make an application to the civil Court with a
prayer to direct the Deputy Commissioner to make a reference.

There is no period of limitation prescribed in subsection (3)(b) to
make that application, but it should be done within the limitation
prescribed by the Schedule to the Limitation Act. Since no article
expressly prescribed the limitation to make such an application,
the residuary article under Article 137 of the Schedule to the
Limitation Act gets attracted. Thus, it could be seen that in the
absence of any special period of limitation prescribed by clause

(b) of sub-section (3) of Section 18 of the Act, the application
should have been made within three years from the date of expiry
of 90 days prescribed in Section 18(3)(b), i.e., the date on which
cause of action had accrued to the respondent claimant. Since the

244 (2005) 8 SCC 709
309

application had been admittedly made beyond three years, it
was clearly barred by limitation. Since the High Court relied upon
the case in Municipal Council, (1969) 1 SCC 873 which has stood
overruled, the order of the High Court is unsustainable.”
This position is also supported by the reasoning in Kerala SEB v.
T.P. Kunhaliumma
, (1976) 4 SCC 634. It may be seen that under
the Central Act sans the Karnataka amendment, there was no
right to approach the Principal Civil Court of original jurisdiction
to compel a reference, and no time-limit was also fixed for making
such an approach. All that was required of a claimant was to
make an application for reference within six weeks of the award
or the notice of the award, as the case may be. But obviously, the
State Legislature thought it necessary to provide a time-frame for
the claimant to make his claim for enhanced compensation and
for ensuring an expeditious disposal of the application for
reference by the authority under the Act fixing a time within
which he is to act and conferring an additional right on the
claimant to approach the civil Court on satisfying the condition
precedent of having made an application for reference within the
time prescribed.”

353. We are of the opinion that courts cannot invalidate acquisitions,

which stood concluded. No claims in that regard can be entertained

and agitated as they have not been revived. There has to be legal

certainty where infrastructure has been created or has been developed

partially, and investments have been made, especially when land has

been acquired long back. It is the duty of the Court to preserve the legal

certainty, as observed in Vodafone International Holdings B.V. v. Union

of India and Ors245. The landowners had urged that since the Act of

2013 creates new situations, which are beneficial to their interests, the

question of delay or laches does not arise. This Court is of the opinion

that the said contention is without merits. As held earlier, the doctrine

of laches would always preclude an indolent party, who chooses not to

approach the court, or having approached the court, allows an adverse

245 (2012) 6 SCC 613
310

decision to become final, to re-agitate the issue of acquisition of his

holding. Doing so, especially in cases, where the title has vested with

the State, and thereafter with subsequent interests, would be contrary

to public policy. In A.P. State Financial Corp. v. Garware Rolling Mill246,

this Court observed that equity is always known to defend the law from

crafty evasions and new subtleties invented to evade the law. There is

no dearth of talent left in longing for the undue advantage of the

wholesome provisions of Section 24(2) on the basis of wrong

interpretation.

354. In British Railway Board v. Pickin247, the following observations

were made:

“… equity, when faced with an appeal to a regulatory public
statute, which requires compliance with formalities, will not allow
such statute (assumedly passed to prevent fraud) to be used to
promote fraud and will do so by imposing a trust or equity upon
a legal right. …”

355. We are unable to accept the submission on behalf of the

landowners that it is by operation of law the proceedings are deemed to

have lapsed and that this Court should give full effect to the provisions.

It was submitted that lapse of acquisition proceedings was not

contemplated under the Act of 1894, and there is departure made in

Section 24 of the Act of 2013. Thus, Section 24 gives a fresh cause of

action to the landowners to approach the courts for a declaration that

the acquisition lapsed, if either compensation has not been paid or the

246 (1994) 2 SCC 647
247 (1974) AC 765
311

physical possession has not been taken. The decision of this Court in

the Mathura Prasad Bajoo Jaiswal and Ors. v. Dossibai N.B.

Jeejeebhoy248 was relied upon to contend that there cannot be res

judicata in the previous proceedings when the cause of action is

different; reliance is also placed on Canara Bank v. N.G. Subbaraya

Setty and Anr249, where the decision of Mathura Prasad Bajoo Jaiswal

and Ors. (supra) was followed as to belated challenges. Reliance was

further placed on Anil Kumar Gupta v. the State of Bihar250 in which it

was held that vesting of land in the Government can be challenged on

the ground that possession had not been taken in accordance with the

prescribed procedure. The invocation of the urgency clause in Section

17, can be questioned on the ground that there was no real urgency.

The notification issued under Section 4 and declaration under Section

6 can be challenged on the ground of non-compliance of Section 5-A(1).

Notice issued under Section 9 and the award passed under Section 11

can also be questioned on permissible grounds. Reliance has also been

placed on Ram Chand and Ors. v. Union of India251 to contend that

inaction and delay on the part of the acquiring authority would also give

rise to a cause of action in favour of the landowner.

356. The entire gamut of submissions of the landowners is based on

the misinterpretation of the provisions contained in Section 24. It does

248 (1970) 1 SCC 613
249 (2018) 16 SCC 228
250 (2012) 12 SCC 443
251 (1994) 1 SCC 4
312

not intend to divest the State of possession (of the land), title to which

has been vested in the State. It only intends to give higher compensation

in case the obligation of depositing of compensation has not been

fulfilled with regard to the majority of holdings. A fresh cause of action

in Section 24 has been given if for five years or more possession has not

been taken nor compensation has been paid. In case possession has

been taken and compensation has not been deposited with respect to

the majority of landholdings, higher compensation to all incumbents

follows, as mentioned above. Section 24 does not confer a new cause of

action to challenge the acquisition proceedings or the methodology

adopted for the deposit of compensation in the treasury instead of

reference court, in that case, interest or higher compensation, as the

case may be, can follow. In our considered opinion, Section 24 is

applicable to pending proceedings, not to the concluded proceedings

and the legality of the concluded proceedings, cannot be questioned.

Such a challenge does not lie within the ambit of the deemed lapse

under Section 24. The lapse under section 24(2) is due to inaction or

lethargy of authorities in taking requisite steps as provided therein.

357. We are also of the considered opinion that the decision in an

earlier round of litigation operates as res judicata where the challenge

to the legality of the proceedings had been negatived and the

proceedings of taking possession were upheld. Section 24 does not

intend to reopen proceedings which have been concluded. The decision
313

in Mathura Prasad Bajoo Jaiswal and Ors. (supra) is of no avail. Similar

is the decision in Anil Kumar Gupta v. State of Bihar (supra). No doubt

about it that proceedings (i.e., the original acquisition, or aspects

relating to it) can be questioned but within a reasonable time; yet once

the challenge has been made and failed or has not been made for a

reasonable time, Section 24 does not provide for reopening thereof.

358. So far as the proposition laid down in Ram Chand and Ors. v.

Union of India (supra) is concerned, inaction and delay on the part of

acquiring authorities have been taken care of under Section 24. The

mischief rule (or Heydon’s Mischief Rule) was pressed into service on

behalf of landowners relying upon the decision in Bengal Immunity Co

v. the State of Bihar (supra), it was submitted that Act of 1894 did not

provide for lapse in the case of inordinate delay on the part of acquiring

Authorities to complete the acquisition proceedings. Mischief has been

sought to be cured by the legislature by introducing the Act of 2013 by

making provisions in Section 24 of the lapse of proceedings. The

submission is untenable. The provisions made under section 24 have

provided a window of 5 years to complete the acquisition proceedings,

and if there is a delay of 5 years or more, there is a lapse and not

otherwise. The provision cannot be stretched any further, otherwise,

the entire infrastructure, which has come up, would have to go and only

the litigants would reap the undeserving fruits of frivolous litigation,
314

having lost in several rounds of litigation earlier, which can never be the

intendment of the law.

359. We are of the considered opinion that Section 24 cannot be used

to revive dead and stale claims and concluded cases. They cannot be

inquired into within the purview of Section 24 of the Act of 2013. The

provisions of Section 24 do not invalidate the judgments and orders of

the Court, where rights and claims have been lost and negatived. There

is no revival of the barred claims by operation of law. Thus, stale and

dead claims cannot be permitted to be canvassed on the pretext of

enactment of Section 24. In exceptional cases, when in fact, the

payment has not been made, but possession has been taken, the

remedy lies elsewhere if the case is not covered by the proviso. It is the

Court to consider it independently not under section 24(2) of the Act of

2013.

360. It was submitted that Section 101 provides for return of unutilized

land under the Act of 2013. Section 101 provides that in case land is

not utilized for five years from the date of taking over the possession,

the same shall be returned to the original owner or owners or their legal

heirs, as the case may be, or to the Land Bank of the appropriate

Government by reversion in the manner as may be prescribed by the

appropriate Government. Section 101 reads as under:

“101. Return of unutilized land.– When any land, acquired
under this Act remains unutilized for a period of five years from
the date of taking over the possession, the same shall be returned
315

to the original owner or owners or their legal heirs, as the case
may be, or to the Land Bank of the appropriate Government by
reversion in the manner as may be prescribed by the appropriate
Government.

Explanation.– For the purpose of this section, “Land Bank” means
a governmental entity that focuses on the conversion of
Government-owned vacant, abandoned, unutilized acquired
lands and tax-delinquent properties into productive use.”

361. Section 24 deals with lapse of acquisition. Section 101 deals with

the return of unutilized land. Section 101 cannot be said to be

applicable to an acquisition made under the Act of 1894. The provision

of lapse has to be considered on its own strength and not by virtue of

Section 101 though the spirit is to give back the land to the original

owner or owners or the legal heirs or to the Land Bank. Return of lands

is with respect to all lands acquired under the Act of 2013 as the

expression used in the opening part is “When any land, acquired under

this Act remains unutilized”. Lapse, on the other hand, occurs when the

State does not take steps in terms of Section 24(2). The provisions of

Section 101 cannot be applied to the acquisitions made under the Act

of 1894. Thus, no such sustenance can be drawn from the provisions

contained in Section 101 of the Act of 2013. Five years’ logic has been

carried into effect for the purpose of lapse and not for the purpose of

returning the land remaining unutilized under Section 24(2).

362. Resultantly, the decision rendered in Pune Municipal Corporation

& Anr. (supra) is hereby overruled and all other decisions in which Pune

Municipal Corporation (supra) has been followed, are also overruled. The

decision in Shree Balaji Nagar Residential Association (supra) cannot be
316

said to be laying down good law, is overruled and other decisions

following the same are also overruled. In Indore Development Authority

v. Shailendra (Dead) through L.Rs. and Ors., (supra), the aspect with

respect to the proviso to Section 24(2) and whether ‘or’ has to be read

as ‘nor’ or as ‘and’ was not placed for consideration. Therefore, that

decision too cannot prevail, in the light of the discussion in the present

judgment.

363. In view of the aforesaid discussion, we answer the questions as

under:

1. Under the provisions of Section 24(1)(a) in case the award is not

made as on 1.1.2014 the date of commencement of Act of 2013, there

is no lapse of proceedings. Compensation has to be determined under

the provisions of Act of 2013.

2. In case the award has been passed within the window period of five

years excluding the period covered by an interim order of the court, then

proceedings shall continue as provided under Section 24(1)(b) of the Act

of 2013 under the Act of 1894 as if it has not been repealed.

3. The word ‘or’ used in Section 24(2) between possession and

compensation has to be read as ‘nor’ or as ‘and’. The deemed lapse of

land acquisition proceedings under Section 24(2) of the Act of 2013

takes place where due to inaction of authorities for five years or more

prior to commencement of the said Act, the possession of land has not
317

been taken nor compensation has been paid. In other words, in case

possession has been taken, compensation has not been paid then there

is no lapse. Similarly, if compensation has been paid, possession has

not been taken then there is no lapse.

4. The expression ‘paid’ in the main part of Section 24(2) of the Act of

2013 does not include a deposit of compensation in court. The

consequence of non-deposit is provided in proviso to Section 24(2) in

case it has not been deposited with respect to majority of land holdings

then all beneficiaries (landowners) as on the date of notification for land

acquisition under Section 4 of the Act of 1894 shall be entitled to

compensation in accordance with the provisions of the Act of 2013. In

case the obligation under Section 31 of the Land Acquisition Act of 1894

has not been fulfilled, interest under Section 34 of the said Act can be

granted. Non-deposit of compensation (in court) does not result in the

lapse of land acquisition proceedings. In case of non-deposit with

respect to the majority of holdings for five years or more, compensation

under the Act of 2013 has to be paid to the “landowners” as on the

date of notification for land acquisition under Section 4 of the Act of

1894.

5. In case a person has been tendered the compensation as provided

under Section 31(1) of the Act of 1894, it is not open to him to claim

that acquisition has lapsed under Section 24(2) due to non-payment or
318

non-deposit of compensation in court. The obligation to pay is complete

by tendering the amount under Section 31(1). Land owners who had

refused to accept compensation or who sought reference for higher

compensation, cannot claim that the acquisition proceedings had

lapsed under Section 24(2) of the Act of 2013.

6. The proviso to Section 24(2) of the Act of 2013 is to be treated as

part of Section 24(2) not part of Section 24(1)(b).

7. The mode of taking possession under the Act of 1894 and as

contemplated under Section 24(2) is by drawing of inquest report/

memorandum. Once award has been passed on taking possession

under Section 16 of the Act of 1894, the land vests in State there is no

divesting provided under Section 24(2) of the Act of 2013, as once

possession has been taken there is no lapse under Section 24(2).

8. The provisions of Section 24(2) providing for a deemed lapse of

proceedings are applicable in case authorities have failed due to their

inaction to take possession and pay compensation for five years or more

before the Act of 2013 came into force, in a proceeding for land

acquisition pending with concerned authority as on 1.1.2014. The

period of subsistence of interim orders passed by court has to be

excluded in the computation of five years.

9. Section 24(2) of the Act of 2013 does not give rise to new cause of

action to question the legality of concluded proceedings of land
319

acquisition. Section 24 applies to a proceeding pending on the date of

enforcement of the Act of 2013, i.e., 1.1.2014. It does not revive stale

and time-barred claims and does not reopen concluded proceedings nor

allow landowners to question the legality of mode of taking possession

to reopen proceedings or mode of deposit of compensation in the

treasury instead of court to invalidate acquisition.

Let the matters be placed before appropriate Bench for

consideration on merits.

..……………………….J.

(Arun Mishra)

..……………………….J.

(Indira Banerjee)

..……………………….J.

(Vineet Saran)

…..…………………….J.

(M. R. Shah)

…………………………J.

(S. Ravindra Bhat)
New Delhi;

March 06, 2020.



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