The question here was whether deposit of compensation by government in treasury can be deemed as payment to landowner as per Section 24(2) of the 2013 Land Acquisition Act 1984 so as to save the proceedings taken under the Land Acquisition Act from being lapsed. In 2014, a three judge bench in Pune Municipal Corporation case held that in case land owners are not willing to accept the compensation, the same has to be deposited in Court. Mere deposit of compensation in treasury cannot be regarded as payment as per Section 24(2). In other words, land acquisition proceedings under the 1894 Act will lapse.

In Pune Municipal Corporation, the Court had held that land acquisition can void under section 24(2) of the land acquisition act if compensation has not been deposited in the bank accounts of the land owners or with the court. It was categorically clarified that money in the government treasury will not be treated as a payment to a landowner.

In this case, the land owners sought withdrawal of writ petitions filed by them before the High Court seeking declaration of lapsing of acquisition of their lands. As an alternative relief they sought permission to allow them to approach the State of Haryana urging to invoke its power to denotify the acquisition of lands in question under Section 101A of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. According to S.C the land owners cease to have any right over the land in dispute, especially when the acquisition proceedings have been upheld in the same or earlier round of litigation.


The Bench held that the compensation need not be deposited in the court. Once the compensation amount is tendered by the State in the government treasury, its obligation will stand complete with respect to the payment of compensation. land acquisition under the earlier law of 1894 will be deemed to have lapsed only when government authorities fail to take possession and pay compensation in the treasury. The court noted that Statement of Objects and Reasons for inserting Section 101A of the 2013 Act by the State Legislature, states that there is also a need to ensure that land is returned back by the State Government.
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 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 had sought reference for higher compensation, cannot claim that the acquisition proceedings had lapsed under Section 24(2) of the Act of 2013. 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.




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