Notification and acquisition: the award, possession, urgency and lapse under section 24

1. The inquiry and the award: section 23

On the date fixed in the section 21 notice, the Collector inquires into objections to the measurements, the value of the land on the date of the preliminary notification, and the respective interests of the claimants. He then makes an award under his hand stating:

• (a) the true area of the land;
• (b) the compensation determined under section 27, together with the Rehabilitation and Resettlement Award under section 31; and
• (c) the apportionment of the compensation among all persons known or believed to be interested, whether or not they appeared.

Sections 34 to 36 give him power to adjourn, to summon witnesses and documents, and to call for records. Under section 33 he may correct clerical or arithmetical mistakes in the award. Under section 37 the award, filed in his office, is final and conclusive evidence between the Collector and the persons interested of the area, market value, solatium and apportionment, subject to a reference to the Authority under section 64. Notice of the award goes to those not present, and a summary of the proceedings, with the compensation awarded to each person, is displayed on the website.

Karnataka: award by agreement (section 23A). Karnataka Act 16 of 2019 inserted section 23A. If all persons interested who appeared before the Deputy Commissioner agree in writing, in the prescribed form, on the matters to be included in the award, he may make the award in those terms without further inquiry. Such an award does not affect compensation for other land in the locality, and the agreement need not be registered.

2. Time for the award: section 25

The award must be made within twelve months from the publication of the section 19 declaration. If it is not, the entire proceedings lapse. The Government may extend the period by a written decision that is notified and uploaded.

3. Possession after payment: section 38

• The Collector takes possession only after ensuring that full compensation has been paid or tendered within three months, and the monetary part of the R&R entitlements within six months, of the award.
• Infrastructural entitlements under the Second and Third Schedules must be provided within eighteen months of the award.
• For irrigation or hydel projects, rehabilitation must be completed six months before the land is submerged.
• The Collector is responsible for seeing that rehabilitation is complete in all its aspects before families are displaced (section 38(2)).

Section 39 adds that, as far as possible, a family already displaced once should not be displaced again; if it is, it gets additional compensation equal to the compensation determined under the Act.

4. Urgency: section 40

In cases of urgency, when the Government so directs, the Collector may take possession on the expiry of thirty days from the section 21 notice even though no award has been made, and the land then vests absolutely in the Government free from encumbrances (section 40(1)). The power is hedged:

• it is restricted to the minimum area required for the defence of India, national security, emergencies arising out of natural calamities, or any other emergency with the approval of Parliament (section 40(2));
• no building may be taken without at least 48 hours’ notice to the occupier;
• the Collector must first tender 80 per cent of the estimated compensation (section 40(3));
• the Government may dispense with Chapters II to VI and make the declaration at any time after the preliminary notification (section 40(4)); the SIA may be exempted under section 9; and
• additional compensation of 75 per cent of the total compensation is payable (section 40(5)), except for projects affecting sovereignty and integrity, security and strategic interests, or relations with foreign States.

5. Withdrawal: section 93

The Government may withdraw from an acquisition of land of which possession has not been taken. The Collector must then compensate the owner for damage suffered because of the notice or the proceedings, with costs reasonably incurred. Once possession is taken, the land vests and withdrawal is no longer possible.

6. Old acquisitions: section 24

Section 24 applies to proceedings begun under the Land Acquisition Act, 1894.

• Section 24(1)(a): if no award under section 11 of the 1894 Act had been made when the 2013 Act commenced, the compensation provisions of the 2013 Act apply.
• Section 24(1)(b): if an award had been made, the proceedings continue under the 1894 Act as if it had not been repealed.
• Section 24(2): where an award was made five years or more before the commencement of the 2013 Act but physical possession has not been taken or compensation has not been paid, the proceedings are deemed to have lapsed, and the Government may start afresh under the 2013 Act. The proviso gives 2013 Act compensation to all beneficiaries where compensation for a majority of holdings has not been deposited in their accounts.

In Pune Municipal Corporation v. Harakchand Misirimal Solanki, 2014 INSC 53, (2014) 3 SCC 183, a three-judge Bench read “paid” as requiring deposit in court, so that a mere deposit in the treasury did not save the acquisition. That view was overruled by the Constitution Bench in Indore Development Authority v. Manoharlal, 2020 INSC 294, (2020) 8 SCC 129, which held:

• lapse under section 24(2) requires both conditions: possession not taken and compensation not paid. The word “or” is read conjunctively, as “nor”. If either step has been taken, there is no lapse;
• compensation is “paid” when it is tendered. Failure to deposit it in court does not cause a lapse; the consequence is higher interest under the 1894 Act;
• the usual mode of taking possession, by drawing up an inquest report or memorandum, is sufficient;
• the five-year period excludes time during which the proceedings were held up by interim orders of a court; and
• section 24(2) applies only to proceedings pending on 1 January 2014. It does not revive concluded acquisitions or give a fresh cause of action to challenge them.

Karnataka amendment to section 24(2). Karnataka Act 16 of 2019 confines the proviso to awards made five years or more before commencement, and adds a further proviso: in computing the period, any time during which the proceedings were held up by an order, stay or injunction of a court, the period specified in a Tribunal’s award for taking possession, and any period where possession has been taken but compensation is lying in court or in a designated account, are excluded.

7. Problem

Land in Mysuru was notified in 2004 under the 1894 Act. The award was made in 2006 and the amount deposited in the treasury, but neither paid to the owner nor deposited in court. No possession was taken. In 2015 the owner claims that the acquisition has lapsed. Decide.

Issue. Whether the acquisition lapsed under section 24(2) of the 2013 Act.

Law. Section 24(2) applies where the award was made five years or more before 1 January 2014. Indore Development Authority holds that lapse requires both non-possession and non-payment, and that payment means tender; non-deposit in court does not cause lapse. Karnataka excludes periods where compensation lies in a designated account.

Application. The award (2006) is more than five years before commencement. Possession has not been taken. The question is whether compensation was “paid”. Depositing the money in the Government’s own treasury without offering it to the owner is not a tender to him. If the Collector had offered the amount and the owner had refused, it would be paid in law. On the facts given, nothing was tendered.

Conclusion. Both conditions are met and the proceedings lapse, leaving the Government free to start afresh under the 2013 Act. If the record shows a tender, or a drawn-up possession memorandum, the acquisition stands and the owner’s remedy is interest on delayed payment.

How this is examined

This note answers the second half of “notification and acquisition” (June 2025) and the short note on urgency acquisition. Section 24 and Indore Development Authority fit any essay on the features of the 2013 Act or on the development of acquisition law, and the problem above is the standard form in which lapse is tested.