Explained: Land acquisition case is back on SC table; here are the questions of law involved

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In February 2018, then Chief Justice of India Dipak Misra had referred the case to a Constitution Bench as two Benches of the court had delivered conflicting judgments on the issue. (File)

A five-judge Constitution Bench of the Supreme Court is set to hear a case on the interpretation of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation Act (LAAR) from October 15.

The Bench headed by Justice Arun Mishra will specifically interpret a provision of the law, Section 24(2), which states that when a developer fails to take possession of the land acquired under the 1894 Act for five years, or if compensation is not paid to the owner, the land acquisition process would fail and will have to initiated afresh under the LAAR.

Background of the case

In February 2018, then Chief Justice of India Dipak Misra had referred the case to a Constitution Bench as two Benches of the court had delivered conflicting judgments on the issue.

The referral came after a three-judge Bench comprising Justices Adarsh Kumar Goel, Arun Mishra and Mohan Shantanagoudar, while interpreting Section 24(2), ruled by a 2-1 majority that if a landowner refuses the compensation offered by the developer, he cannot take advantage of his own wrongdoing, and have the acquisition proceedings lapse under the old law.

If the proceedings lapse under the old law, the acquisition process would be initiated again under the new law, allowing the owner to get higher compensation.

In doing so, the court also invalidated a 2014 judgment by another three-judge Bench on the same issue, and declared it “per incuriam”, or lacking in regard for the law and facts.

Justice Shantanagoudar had dissented with the two senior judges in the 2018 verdict.

The 2014 verdict by a Bench also comprising three judges, Justices R M Lodha, Madan Lokur, and Kurian Joseph, had said that acquisition proceedings initiated under the 1894 Act would automatically lapse, and would have to be initiated again if the state has not taken control of the land for five years, or if compensation was not paid to displaced farmers.

While the 2014 ruling is considered to be in favour of the landowners, the 2018 ruling gave fresh hope for developers.

Why was a referral to a larger Bench made?

Days after the 2018 verdict was pronounced, another three-judge Bench comprising Justices Lokur, Joseph, and Deepak Gupta stayed all cases relating to this provision of the land acquisition Act in all High Courts till the question of law was settled.

The Bench also asked “other Benches of the Supreme Court” to not take up the issue until it was decided by a larger Bench.

Two of the judges on this Bench, Justices Lokur and Joseph, were also part of the Bench that delivered the 2014 verdict that was invalidated.

Justice Joseph in oral observations made in the court strongly criticised the 2018 ruling and said that the 2018 verdict had deviated from “virgin principles” of the institution in declaring a verdict of equal Bench strength ‘per incuriam’.

Subsequently, separate Benches headed by Justices Goel and Mishra referred the matter to the CJI, requesting that a larger Bench be set up.

What does it mean when a court ruling is declared ‘per incuriam’?

A judgment that is declared per incuriam has no legal force or validity, and does not count as a precedent.

In common law, a case decided by Benches of larger or equal strength is binding on other Benches, and since the Supreme Court sits in Benches of two or three, this practice ensures consistency and certainty in law.

A three-judge Bench cannot hold a decision by another three-judge Bench to be per incuriam; it can only ask for the matter to be considered by a larger Bench if it disagrees with the precedent.

Similarly, a Bench cannot ask other Benches to not follow a judgment.

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