Land Acquisition Lapses Under Section 24(2) of 2013 Act Where Neither Possession Taken Nor Compensation Paid

The Appellants (Jhutharam & Ors.) purchased land in Khasra No. 194, Village Beed Khatipura, in 1975.

In 1991, the State initiated proceedings under the Urban Land (Ceiling and Regulation) Act (ULC Act), which the High Court later stayed.

Simultaneously, the Jaipur Development Authority (JDA) initiated acquisition under the Land Acquisition Act, 1894, passing an award in 1995.

However, successive interim orders from the High Court and Supreme Court prevented JDA from taking possession.

In 2002, a Settlement Committee directed regularization upon the Appellants paying 25% of the reserve price and withdrawing litigation.

The Appellants deposited partial payment, but the JDA later stayed the implementation.

Following the enactment of the 2013 Act, the Appellants claimed the acquisition had lapsed.

The Single Judge held the acquisition had lapsed but declared subsequent sale deeds void and labeled the Appellants as trespassers due to unauthorized commercial use.

Both parties appealed.

1. Whether the land acquisition proceedings under the Act of 1894 lapsed in view of Section 24(2) of the Act of 2013?

2. Whether the Appellants can be classified as trespassers or if they retain ownership of the land?

3. Whether the JDA was entitled to retain the deposit made under the Settlement Committee's decision while denying regularization?

The Court applied Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, regarding the lapse of acquisition.

It relied on the Constitution Bench precedent in Indore Development Authority v. Manoharlal (2020) 8 SCC 129, which established that lapse occurs only if both physical possession has not been taken and compensation has not been paid.

The Court applied Section 90-A of the Rajasthan Land Revenue Act regarding the conversion of agricultural land for non-agricultural purposes.

The Court considered Section 83-A of the JDA Act regarding the binding nature of Settlement Committee decisions.

The Court noted that although the Indore Development Authority judgment overruled the "or" interpretation in Pune Municipal Corporation, the facts of this case satisfied the requirements for lapse.

It was admitted by JDA that no physical possession (actual or via memorandum/panchnama) was ever taken due to decades of interim stay orders.

Additionally, compensation was never "paid" or "tendered" to the landowners, as cheques were returned and never deposited in court.

Therefore, since both conditions of Section 24(2) remained unfulfilled as of 01.01.2014, the acquisition lapsed by operation of law.

Regarding the trespasser status, the Court reasoned that since the acquisition lapsed, ownership reverted to the original khatedars.

The failure to deposit the full settlement amount did not vest title in the JDA; it merely meant the land remained agricultural and un-regularized.

Any unauthorized commercial use might warrant demolition of structures, but it does not extinguish the owner's title to the land.

It held that the land acquisition proceedings under the 1894 Act lapsed under Section 24(2) of the 2013 Act.

The Court declared Jhutharam as the rightful owner in possession of Khasra No. 194 and held JDA has no claim.

The JDA was directed to refund the deposit made by the Appellants with 12% interest per annum, or alternatively, set off the conversion charges under Section 90-A against said amount if the Appellants apply for regularization.

The findings of the Single Judge labeling the Appellants as trespassers and the sale deeds as void were set aside.