SC Agrees to Review Land Acquisition Ruling That Gave Upper Hand to Govt

New Delhi: In a significant development, the Supreme Court on Wednesday virtually stayed the operation of its own judgment, which had on February 8 ruled that land acquisition will not lapse even if the money is not deposited in the court and the landowners have not been paid.

A three-judge bench of Justices Madan B Lokur, Kurian Joseph and Deepak Gupta, asked the high courts across the country not to decide any case of land acquisition on the basis of the new ruling.

For the cases pending in the apex court, the bench requested the judges to defer the hearing and not pass orders since the three-judge bench was considering to refer the issue to a larger bench.

The February 8 judgment had interpreted the 2013 Land Acquisition Act, and the outcome appeared beneficial for the Central and state governments. This judgment gave an upper hand to the government in land acquisition matters with their duty considerably reduced about making sure the compensation is adequate and proper for the land owners, in particular farmers, so that the acquisition does not lapse on this score alone.

The Court order on Wednesday came after it was argued by senior advocates Mukul Rohatgi, CU Singh, Huzefa Ahmadi and Jayant Bhushan that the February 8 judgment, holding the 2014 verdict in Pune Municipal Corporation case as 'per incuriam' was a digression from judicial principle and propriety.

A judgment is declared to be 'per incuriam' when the ruling lacks thorough care, and is decided without referring to the relevant provisions of law and previous judgments.

In Pune Municipal Corporation case, a three-judge bench had ruled that acquisition proceeding will be declared as null and void as per section 24 (2) of the Land Acquisition Act of 2013 of the compensation has not been deposited either in the bank accounts of the land owners or with the court concerned. It was categorically held that money in the treasury of the government cannot be treated as payment to the land owners.

But on February 8, another three-judge bench in the top court, by a 2:1 majority, declared this judgment to be 'per incuriam' under the 2013 Act as well as the old law of 1894. While Justices Arun Mishra and AK Goel held the previous judgment to be bad in law, Justice MM Shantanagoudar dissented.

This judgment held that once the amount of compensation has been unconditionally tendered and it is refused, that would amount to payment and the obligation under section 31(1) stands discharged.

The new judgment meant reopening of all the cases decided by the high courts and pending review before the apex court under the principle of Pune Municipal Corporation case.

Rohatgi submitted before the bench that the 2014 judgment could not have been held to be per incuriam because both the benches are of coordinate strength of three judges.

He said that the new judgment is a 'recipe for disaster' since it seeks to open a Pandora box and upset even the settled cases retrospectively.

Requesting the Court to refer the issue to a five-judge Constitution Bench for an authoritative ruling, Rohatgi pleaded for a 'protective' order so that no other court proceeds on the basis of the new judgment.

Appearing for the Haryana government in this batch of cases, senior advocate PS Patwalia said he had no instructions at the moment and that he would need some time to revert.

The bench then decided to pass an interim order till it decides on the question of reference to a larger bench.

It virtually stayed the operation of the new judgment by resisting the Supreme Court and high courts not to decide cases under Section 24 of the 2013 Act on the basis of the new principle.

The Court will resume hearing on March 7.