Land Acquisition Matter

Why land acquisition matter is back in SC?

Approx Read Time: 5 minutes

In News:

  • A five-judge Constitution Bench of the Supreme Court will soon begin hearing a case to clarify the interpretation of the law on land acquisition.
  • The case is specifically related to the provision of compensation awarded to land owners.
  • Two rulings delivered by separate three-judge Benches of the apex court in 2014 and 2018 on the same issue differed in their interpretations, prompting the court to refer the matter to a larger Bench.

News Summary:

Significance of the case:
  • The scheduled hearing will decide the legality of several cases of land acquisition that took place across the country before 2009.
  • The matter also raises significant questions on judicial discipline, and how judgments of the court are applied while deciding subsequent cases on similar issues.

What is the provision of the law in question?

  • The issue involves Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which replaced the colonial 1894 land acquisition law.
  • The provision says that in cases where acquisition proceedings were initiated under the 1894 law and compensation had been determined, the proceedings would lapse:
    • If the state did not take possession of the land for five years,
    • And had also not paid the compensation to the landowner.
  • Once the proceedings lapse under the old law, the acquisition process would be initiated again under the new law, allowing the owner to get a higher compensation.
  • The term “paid” needed interpretation — and since it placed the responsibility on the government, cases were filed before courts soon after the law was implemented.

The two conflicting judgments

  1. 2014 judgment:
    • The first such case, in 2014 involving the interpretation of the new law, was Pune Municipal Authority v Harakchand Misirimal Solanki.
    • It was put forth a three-judge Bench.
    • The judgment said that the state depositing the compensation in its own treasury cannot be equated with the landowners being “paid”.
    • In exceptional circumstances, where the landowner refuses the compensation, the sum can be deposited with the court, but a deposit in its own treasury would not suffice.
    • This ruling was followed as precedent by High Courts in several cases, and was affirmed by the apex court itself in 2016.
  2. Subsequent judgment in 2018:
    • However, in February 2018, in a similar case, a different three-judge Bench gave a different ruling in Indore Developmental Authority v Shailendra.
    • The bench ruled that in cases where the landowner had refused compensation, depositing it with the treasury was sufficient, and the state was not obligated to deposit it with the court.
    • Further, the only consequence of not depositing the compensation with the court “at the most in appropriate cases may be of a higher rate of interest on compensation”, and not lapse of acquisition.
    • In doing so, the court also invalidated the settled law on the issue — the earlier 2014 judgment — and declared it “per incuriam”.

What does it mean for a case to be declared “per incuriam”?

  • ‘Incuria’ is Latin for “carelessness”, and when a judgment is declared per incuriam, it means that the case was wrongly decided, mostly because the judges were ill-informed about the applicable law.
  • A judgment can also be declared per incuriam if it has materially deviated from earlier precedents.
  • A judgment that is per incuriam has no legal force or validity and does not have to be counted as a precedent.

Referral to a larger Bench:

  • After the 2018 verdict, another three-judge Bench noticed the inconsistency.
  • This bench, stayed all cases relating to this provision of the land acquisition Act in High Courts across the country until the question of law was settled.
  • It also asked other Benches of the Supreme Court to not take up the issue until it was decided by a larger Bench.
  • A judge strongly criticised the 2018 ruling, stating that the verdict had deviated from “virgin principles” of the institution in declaring a verdict of equal Bench strength as per incuriam.
  • Subsequently, the case was referred to then Chief Justice of India requesting him to set up a larger Bench.
  • Now a five-judge Constitution Bench of the Supreme Court has been set up to decide the case.

Applicability of judgments in India:

  • In common law, a judicial system that is followed in India, a judgment of the court is used as the basis or precedent for determining future cases.
  • A ruling of the Supreme Court is binding on all High Courts, and a ruling of the Supreme Court by Benches of larger or equal strength is binding on other Benches of the court.
  • The problem with a ruling being invalidated:
    • The controversy stemmed from not only the fact that the 2014 ruling was declared per incuriam, but also because it was done so by a Bench of equal strength.
    • It is unusual for a three-judge Bench to hold a decision by another three-judge Bench to be per incuriam. Usually, it asks for consideration by a larger Bench if it disagrees with the precedent.
  • Since the Supreme Court sits in Benches of two or three, the practice of following precedent ensures consistency and certainty in law.
  • Hence, larger Bench rulings are preferred in complex cases to make sure that the law laid down by the court is predictable as far as possible.

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